AMENDED
AND RESTATED DECLARATION OF TRUST
 by
and among
  U.S.
BANK NATIONAL ASSOCIATION,as Institutional Trustee,
  TEMECULA
VALLEY BANCORP INC.,as Sponsor,
  and
  STEPHEN H. WACKNITZ,
LUTHER J. MOHR andDONALD A. PITCHER,as
Administrators,
    Dated as of September 17,
2003
      
   TABLE
OF CONTENTS
 PageARTICLE
      I INTERPRETATION AND DEFINITIONS
                1Section
      1.1.  Definitions.
                1ARTICLE
      II ORGANIZATION
                7Section
      2.1.  Name
                7Section
      2.2.  Office.
                7Section
      2.3.  Purpose
                7Section
      2.4.  Authority.
                7Section
      2.5.  Title to Property of the Trust.
                7Section
      2.6.  Powers and Duties of the Institutional Trustee and the
      Administrators
                8Section
      2.7.  Prohibition of Actions by the Trust and the Institutional
      Trustee.
                11Section
      2.8.  Powers and Duties of the Institutional
      Trustee.
                12Section
      2.9. Certain Duties and Responsibilities of the Institutional Trustee and
      Administrators
                13Section
      2.10. Certain Rights of Institutional Trustee
                14Section
      2.11. Execution of Documents.
                16Section
      2.12. Not Responsible for Recitals or Issuance of
    Securities
                16Section
      2.13. Duration of Trust.
                16Section
      2.14. Mergers.
                16ARTICLE
      III SPONSOR
                18Section
      3.1.  Sponsor’s Purchase of Common Securities.
                18Section
      3.2.  Responsibilities of the Sponsor.
                18Section
      3.3.  Expenses
                18Section
      3.4.  Right to Proceed.
                19ARTICLE
      IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS
                19Section
      4.1.  Institutional Trustee; Eligibility.
                19Section
      4.2.  Administrators
                20Section
      4.3. Appointment, Removal and Resignation of Institutional Trustee and
      Administrators
                20
 
 
 
 Section
      4.4.  Institutional Trustee Vacancies.
                21Section
      4.5.  Effect of Vacancies
                21Section
      4.6.  Meetings of the Institutional Trustee and the
      Administrators
                21Section
      4.7.  Delegation of Power.
                22Section
      4.8.  Conversion, Consolidation or Succession to
      Business.
                22ARTICLE
      V DISTRIBUTIONS
                22Section
      5.1.  Distributions
                22ARTICLE
      VI ISSUANCE OF SECURITIES
                22Section
      6.1.  General Provisions Regarding Securities.
                22Section
      6.2.  Paying Agent, Transfer Agent and Registrar
                213Section
      6.3.  Form and Dating.
                213Section
      6.4.  Mutilated, Destroyed, Lost or Stolen
      Certificates.
                24Section
      6.5.  Temporary Securities.
                24Section
      6.6.  Cancellation.
                24Section
      6.7.  Rights of Holders; Waivers of Past
    Defaults.
                24ARTICLE
      VII DISSOLUTION AND TERMINATION OF TRUST
                26Section
      7.1.  Dissolution and Termination of Trust.
                26ARTICLE
      VIII TRANSFER OF INTERESTS
                27Section
      8.1.  General.
                27Section
      8.2.  Transfer Procedures and Restrictions.
                28Section
      8.3.  Deemed Security Holders.
                29ARTICLE
      IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE
      OR OTHERS
                30Section
      9.1.  Liability.
                30Section
      9.2.  Exculpation.
                30Section
      9.3.  Fiduciary Duty.
                31Section
      9.4.  Indemnification.
                31Section
      9.5.  Outside Businesses.
                33Section
      9.6.  Compensation; Fee.
                33ARTICLE
      X ACCOUNTING
                34Section
      10.1. Fiscal Year
                34Section
      10.2. Certain Accounting Matters
                34Section
      10.3. Banking.
                34Section
      10.4. Withholding.
                34ARTICLE
      XI AMENDMENTS AND MEETINGS
                35Section
      11.1. Amendments.
                35Section
      11.2. Meetings of the Holders of Securities; Action by Written
      Consent.
                36
 
 
 
 ARTICLE XII
      REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
                37Section
      12.1. Representations and Warranties of Institutional
    Trustee
                37ARTICLE
      XIII MISCELLANEOUS
                38Section
      13.1. Notices
                38Section
      13.2. Governing Law
                39Section
      13.3. Intention of the Parties.
                39Section
      13.4. Headings.
                39Section
      13.5. Successors and Assigns.
                39Section
      13.6. Partial Enforceability.
                39Section
      13.7. Counterparts
                39Annex
      I........................Terms of SecuritiesExhibit
      A-1 ..................Form of Capital Security CertificateExhibit
      A-2 ..................Form of Common Security CertificateExhibit
      B .....................Specimen of Initial DebentureExhibit
      C .....................Placement Agreement
 AMENDED
AND RESTATED
 DECLARATION
OF TRUST
 OF
 TEMECULAVALLEYSTATUTORY
TRUST II
  September
17, 2003
  AMENDED AND RESTATED
DECLARATION OF TRUST (“Declaration”) dated and effective as of September 17,
2003, 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 Temecula Valley
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 September
5, 2003 (the “Original Declaration”), and a Certificate of Trust filed with the
Secretary of State of the State of Connecticut on September 5, 2003, 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.
 “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 Stephen H. Wacknitz, Luther J. Mohr and Donald A. Pitcher, 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.
 “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
Temecula Valley Bancorp Inc., a Delaware 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
 2033 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” has
the meaning set forth in paragraph 2(a) of Annex I.
 “Distribution Rate” means,
for the period beginning on (and including) the date of original issuance and
ending on (but excluding) December 17, 2003, the rate per annum of 4.09%, and
for the period beginning on (and including) December 17, 2003 and thereafter,
the Coupon Rate.
 “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.
 “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 <?xml:namespace prefix = st2 ns = "urn:schemas:contacts"
/>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. “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 Temecula Valley Bancorp Inc., a Delaware 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.
  “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 “Temecula Valley
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.
  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 (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.
  (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 la ws 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.
  (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.
  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.
  (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
Institutiona l 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 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 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 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 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 “Success or 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;
  (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, wit
hout limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, Paying Agents, Registrars, Transfer Agents, duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and disposition
of Trust assets and the enforcement by the Institutional Trustee of the rights
of the Holders (for purposes of clarification, this Section 3.3(b) does not
contemplate the
  payment by the Sponsor of
acceptance or annual administration fees owing to the Institutional Trustee
pursuant to the services to be provided by the Institutional Trustee under this
Declaration or the fees and expenses of the Institutional Trustee’s counsel in
connection with the closing of the transactions contemplated by this
Declaration); and
  (c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
  The Sponsor’s obligations
under this Section 3.3 shall be for the benefit of, and shall be enforceable by,
any Person to whom such debts, obligations, costs, expenses and taxes are owed
(a “Creditor”) whether or not such Creditor has received notice hereof. Any such
Creditor may enforce the Sponsor’s obligations under this Section 3.3 directly
against the Sponsor and the Sponsor irrevocably waives any right or remedy to
require that any such Creditor take any action against the Trust or any other
Person before proceeding against the Sponsor. The Sponsor agrees to execute such
additional agreements as may be necessary or desirable in order to give full
effect to the provisions of this Section 3.3.
 Section
3.4. Right to Proceed. The Sponsor acknowledges the
rights of Holders to institute a Direct Action as set forth in Section 2.8(d)
hereto.
 ARTICLE
IV
 INSTITUTIONAL
TRUSTEE AND ADMINISTRATORS
  Section 4.1. Institutional Trustee; Eligibility .
 (a) There shall at all
times be one Institutional Trustee which shall:
 (i) not be an Affiliate of the Sponsor;
  (ii) not offer or provide credit or credit enhancement to the Trust; and
  (iii) be a banking
corporation or trust company organized and doing business under the laws of the
United States of America or any state thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000.00), and
subject to supervision or examination by Federal, state, or District of Columbia
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 4.1(a)(iii) , the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.
 (b) If at any time the Institutional Trustee shall cease to be eligible to so
act under Section 4.1(a), the Institutional Trustee shall immediately resign in
the manner and with the effect set forth in Section 4.3(a).
  (c) If the Institutional Trustee has or shall acquire any “conflicting interest”
within the meaning of Section 310(b) of the Trust Indenture Act of 1939, as
amended, the Institutional Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to this
Declaration.
  (d) The initial
Institutional Trustee shall be U.S. Bank National Association.
  Section
4.2. Administrators .Each Administrator shall be
a U.S. Person, 21 years of age or older and author ized to bind the
Sponsor.  The initial Administrators shall be Stephen H. Wacknitz, Luther
J. Mohr and Donald A. Pitcher. 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 6months 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
  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 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 Securit ies 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.




(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 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. Mutilate
d, 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




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
non­payment 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 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 September 17, 2038, 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.




(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.




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.




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 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.




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.




(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.




(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 (whic h 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.




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 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.




(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.




0




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 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);




(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):






Temecula Valley Statutory
Trust IIc/o Temecula Valley Bancorp Inc.27710 Jefferson Avenue,
A-100Temecula, California 92590-2669Attention:  Donald A.
PitcherTelecopy: 909-694-9050




(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
Association1 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):




Temecula Valley Bancorp
Inc.27710 Jefferson Avenue, A-100Temecula, California
92590-2669Attention: Donald A. PitcherTelecopy:
909-694-9050




(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







ANNEX I




TERMS OF SECURITIES




Pursuant to Section 6.1 of
the Amended and Restated Declaration of Trust, dated as of September 17, 2003
(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) 5,000 Floating Rate Capital Securities of Temecula Valley Statutory Trust II
(the “Trust”), with an aggregate stated liquidation amount with respect to the
assets of the Trust of five million dollars ($5,000,000.00) 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) 155 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 period beginning on
(and including) the date of original issuance and ending on (but excluding)
December 17, 2003 at a rate per annum of 4.09% and shall bear interest for each
successive period beginning on (and including) December 17, 2003, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date (each, a “Distribution Period”) at a rate
per annum equal to the 3-Month LIBOR, determined as described below, plus 2.95%
(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, commencing on December 17, 2003 (each a
“Distribution Payment Date”) 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




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 (ta king 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. If any date
on which Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such payment date.




(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, 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 September 17, 2033. The Debentures may be redeemed by the Debenture
Issuer, in whole or in part, at any Distribution Payment Date on or after
September 17, 2008, 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; (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 11:00a.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.




“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
legis lative 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
September 17, 2033.


“Redemption Date” shall
mean the date fixed for the redemption of Capital Securities, which shall be any
March 17, June 17, September 17 or December 17 commencing September 17, 2008.


“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 any
March 17, June 17, September 17 or December 17.


“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:


Special
      Redemption Date
            Special
      Redemption PriceDecember 17,
      2003
            104.625%March 17, 2004
            104.300%June 17, 2004
            104.000%September 17, 2004
            103.650%December 17, 2004
            103.350%March 17, 2005
            103.000%June 17, 2005
            102.700%September 17, 2005
            102.350%December 17, 2005
            102.050%March 17, 2006
            101.700%






June 17, 2006
            101.400%September 17, 2006
            101.050%December 17, 2006
            100.750%March 17, 2007
            100.450%June 17,
      2007
            100.200%September 17, 2007
      and thereafter
            100.000%






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




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




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






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






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






(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 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 Capita l 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 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
Securitie s 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 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 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.






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.






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 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








5,000
Capital Securities


September 17, 2003


Certificate Evidencing
Floating Rate Capital Securities


of




Temecula Valley Statutory Trust II




(liquidation amount
$1,000.00 per Capital Security)




Temecula Valley 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 September 17, 2003 among Preferred Term Securities XI, Ltd., Preferred Term
Securities XI, 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”). Subje ct 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 September 17, 2003,
among Stephen H. Wacknitz, Luther J. Mohr and Donald A. Pitcher, as
Administrators, U.S. Bank National Association, as Institutional Trustee,
Temecula Valley Bancorp Inc., 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.




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




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




[FORM OF REVERSE OF
CAPITAL SECURITY]




Distributions payable on
each Capital Security will be payable at an annual rate equal to 4.09% beginning
on (and including) the date of original issuance and ending on (but excluding)
December 17, 2003 and at an annual rate for each successive period beginning on
(and including) December 17, 2003, 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 2.95% (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 unle ss 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 Te lerate 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)).




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
such day is not a Business Day, then the next succeeding Business Day),
commencing on December 17, 2003.  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, subje ct 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.




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:11 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, a ll in accordance with
the Securities Exchange Act of 1934, as amended.











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
155




Common Securities




September 17, 2003




Certificate Evidencing
Floating Rate Common Securities




of




Temecula Valley Statutory Trust II




Temecula Valley Statutory
Trust II, a statutory trust created under the laws of the State of Connecticut
(the “Trust”), hereby certifies that Temecula Valley Bancorp Inc. (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 September 17, 2003, among Stephen H. Wacknitz, Luther J. Mohr and Donald
A. Pitcher, as Administrators, U.S. Bank National Association, as Institutional
Trustee, Temecula Valley Bancorp Inc., 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.




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




TEMECULA VALLEY STATUTORY
TRUST II




By:




Name:




Title: Administrator




[FORM OF REVERSE OF COMMON
SECURITY]




Distributions payable on
each Common Security will be payable at an annual rate equal to 4.09% beginning
on (and including) the date of original issuance and ending on (but excluding)
December 17, 2003 and at an annual rate for each successive period beginning on
(and including) December 17, 2003, 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 2.95% (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)).




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
such day is not a Business Day, then the next succeeding Business Day),
commencing on December 17, 2003. 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.




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.








EXHIBIT
B SPECIMEN OF INITIAL DEBENTURE




(See Document No. 16)








EXHIBIT
C PLACEMENT AGREEMENT




(See Document No. 1)