Exhibit 10.34

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                          TEMECULA VALLEY BANCORP INC.,
                                    as Issuer






                                    INDENTURE
                         Dated as of September 29, 2005



                            WILMINGTON TRUST COMPANY,
                                   as Trustee




        FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES


                                    DUE 2035


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                                TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS............................................................................................1

         Section 1.1.      Definitions............................................................................1

ARTICLE II. DEBENTURES............................................................................................8

         Section 2.1.      Authentication and Dating..............................................................8
         Section 2.2.      Form of Trustee's Certificate of Authentication........................................9
         Section 2.3.      Form and Denomination of Debentures....................................................9
         Section 2.4.      Execution of Debentures................................................................9
         Section 2.5.      Exchange and Registration of Transfer of Debentures...................................10
         Section 2.6.      Mutilated, Destroyed, Lost or Stolen Debentures.......................................12
         Section 2.7.      Temporary Debentures..................................................................12
         Section 2.8.      Payment of Interest and Additional Interest...........................................13
         Section 2.9.      Cancellation of Debentures Paid, etc..................................................14
         Section 2.10.     Computation of Interest...............................................................14
         Section 2.11.     Extension of Interest Payment Period..................................................15
         Section 2.12.     CUSIP Numbers.........................................................................16
         Section 2.13.     Global Debentures.....................................................................17

ARTICLE III. PARTICULAR COVENANTS OF THE COMPANY.................................................................18

         Section 3.1.      Payment of Principal, Premium and Interest; Agreed Treatment of the Debentures........18
         Section 3.2.      Offices for Notices and Payments, etc.................................................19
         Section 3.3.      Appointments to Fill Vacancies in Trustee's Office....................................19
         Section 3.4.      Provision as to Paying Agent..........................................................19
         Section 3.5.      Certificate to Trustee................................................................20
         Section 3.6.      Additional Sums.......................................................................20
         Section 3.7.      Compliance with Consolidation Provisions..............................................21
         Section 3.8.      Limitation on Dividends...............................................................21
         Section 3.9.      Covenants as to the Trust.............................................................21
         Section 3.10.     Additional Junior Indebtedness........................................................22

ARTICLE IV. SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE....................................22

         Section 4.1.      Securityholders' Lists................................................................22
         Section 4.2.      Preservation and Disclosure of Lists..................................................22

ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT..................................23

         Section 5.1.      Events of Default.....................................................................23
         Section 5.2.      Payment of Debentures on Default; Suit Therefor.......................................25
         Section 5.3.      Application of Moneys Collected by Trustee............................................26
         Section 5.4.      Proceedings by Securityholders........................................................27
         Section 5.5.      Proceedings by Trustee................................................................27
         Section 5.6.      Remedies Cumulative and Continuing; Delay or Omission Not a Waiver....................27
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         Section 5.7.      Direction of Proceedings and Waiver of Defaults by Majority of Securityholders........27
         Section 5.8.      Notice of Defaults....................................................................28
         Section 5.9.      Undertaking to Pay Costs..............................................................28

ARTICLE VI. CONCERNING THE TRUSTEE...............................................................................29

         Section 6.1.      Duties and Responsibilities of Trustee................................................29
         Section 6.2.      Reliance on Documents, Opinions, etc..................................................29
         Section 6.3.      No Responsibility for Recitals, etc...................................................30
         Section 6.4.      Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May
                           Own Debentures........................................................................31
         Section 6.5.      Moneys to be Held in Trust............................................................31
         Section 6.6.      Compensation and Expenses of Trustee..................................................31
         Section 6.7.      Officers' Certificate as Evidence.....................................................32
         Section 6.8.      Eligibility of Trustee................................................................32
         Section 6.9.      Resignation or Removal of Trustee.....................................................32
         Section 6.10.     Acceptance by Successor Trustee.......................................................33
         Section 6.11.     Succession by Merger, etc.............................................................34
         Section 6.12.     Authenticating Agents.................................................................34

ARTICLE VII. CONCERNING THE SECURITYHOLDERS......................................................................35

         Section 7.1.      Action by Securityholders.............................................................35
         Section 7.2.      Proof of Execution by Securityholders.................................................36
         Section 7.3.      Who Are Deemed Absolute Owners........................................................36
         Section 7.4.      Debentures Owned by Company Deemed Not Outstanding....................................36
         Section 7.5.      Revocation of Consents; Future Holders Bound..........................................36

ARTICLE VIII. SECURITYHOLDERS' MEETINGS..........................................................................37

         Section 8.1.      Purposes of Meetings..................................................................37
         Section 8.2.      Call of Meetings by Trustee...........................................................37
         Section 8.3.      Call of Meetings by Company or Securityholders........................................37
         Section 8.4.      Qualifications for Voting.............................................................37
         Section 8.5.      Regulations...........................................................................37
         Section 8.6.      Voting................................................................................38
         Section 8.7.      Quorum; Actions.......................................................................38

ARTICLE IX. SUPPLEMENTAL INDENTURES..............................................................................39

         Section 9.1.      Supplemental Indentures without Consent of Securityholders............................39
         Section 9.2.      Supplemental Indentures with Consent of Securityholders...............................40
         Section 9.3.      Effect of Supplemental Indentures.....................................................41
         Section 9.4.      Notation on Debentures................................................................41
         Section 9.5.      Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee...........41

ARTICLE X. REDEMPTION OF SECURITIES..............................................................................41

         Section 10.1.     Optional Redemption...................................................................41
         Section 10.2.     Special Event Redemption..............................................................42
         Section 10.3.     Notice of Redemption; Selection of Debentures.........................................42
         Section 10.4.     Payment of Debentures Called for Redemption...........................................42
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ARTICLE XI. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE....................................................43

         Section 11.1.     Company May Consolidate, etc., on Certain Terms.......................................43
         Section 11.2.     Successor Entity to be Substituted....................................................43
         Section 11.3.     Opinion of Counsel to be Given to Trustee.............................................43

ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE.............................................................44

         Section 12.1.     Discharge of Indenture................................................................44
         Section 12.2.     Deposited Moneys to be Held in Trust by Trustee.......................................44
         Section 12.3.     Paying Agent to Repay Moneys Held.....................................................44
         Section 12.4.     Return of Unclaimed Moneys............................................................45

ARTICLE XIII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS....................................45

         Section 13.1.     Indenture and Debentures Solely Corporate Obligations.................................45

ARTICLE XIV. MISCELLANEOUS PROVISIONS............................................................................45

         Section 14.1.     Successors............................................................................45
         Section 14.2.     Official Acts by Successor Entity.....................................................45
         Section 14.3.     Surrender of Company Powers...........................................................45
         Section 14.4.     Addresses for Notices, etc............................................................45
         Section 14.5.     Governing Law.........................................................................46
         Section 14.6.     Evidence of Compliance with Conditions Precedent......................................46
         Section 14.7.     Table of Contents, Headings, etc......................................................46
         Section 14.8.     Execution in Counterparts.............................................................46
         Section 14.9.     Separability..........................................................................46
         Section 14.10.    Assignment............................................................................46
         Section 14.11.    Acknowledgment of Rights..............................................................46

ARTICLE XV. SUBORDINATION OF DEBENTURES..........................................................................47

         Section 15.1.     Agreement to Subordinate..............................................................47
         Section 15.2.     Default on Senior Indebtedness........................................................47
         Section 15.3.     Liquidation, Dissolution, Bankruptcy..................................................47
         Section 15.4.     Subrogation...........................................................................48
         Section 15.5.     Trustee to Effectuate Subordination...................................................49
         Section 15.6.     Notice by the Company.................................................................49
         Section 15.7.     Rights of the Trustee; Holders of Senior Indebtedness.................................50
         Section 15.8.     Subordination May Not Be Impaired.....................................................50

Exhibit A         Form of Floating Rate Junior Subordinated Deferrable Interest Debenture
Exhibit B         Form of Certificate to Trustee
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                                      iii
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         THIS INDENTURE, dated as of September 29, 2005, between Temecula Valley
Bancorp Inc., a California corporation (the "Company"), and Wilmington Trust
Company, a Delaware banking corporation, as debenture trustee (the "Trustee").

                                   WITNESSETH:

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its Floating Rate Junior Subordinated Deferrable
Interest Debentures due 2035 (the "Debentures") under this Indenture to provide,
among other things, for the execution and authentication, delivery and
administration thereof, and the Company has duly authorized the execution of
this Indenture; and

         WHEREAS, all acts and things necessary to make this Indenture a valid
agreement according to its terms, have been done and performed;

         NOW, THEREFORE, This Indenture Witnesseth:

         In consideration of the premises, and the purchase of the Debentures by
the holders thereof, the Company covenants and agrees with the Trustee for the
equal and proportionate benefit of the respective holders from time to time of
the Debentures as follows:

                                   ARTICLE I.
                                  DEFINITIONS
                                  -----------

         Section 1.1. Definitions.  The terms defined in this Section 1.1
(except as herein otherwise  expressly  provided or unless the context otherwise
requires) for all purposes of this  Indenture  and of any  indenture
supplemental  hereto shall have the respective meanings specified in this
Section 1.1. All accounting terms used herein and not expressly  defined shall
have the meanings assigned to such terms in accordance with generally accepted
accounting  principles and the term "generally accepted accounting principles"
means such accounting principles as are generally  accepted in the United States
at the time of any  computation. The words  "herein,"  "hereof" and "hereunder"
and other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.

         "Acceleration Event of Default" means an Event of Default under Section
5.1(a), (d), (e) or (f), whatever the reason for such Acceleration Event of
Default 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.

         "Additional Interest" has the meaning set forth in Section 2.11.

         "Additional Junior Indebtedness" means, without duplication and other
than the Debentures, any indebtedness, liabilities or obligations of the
Company, or any Subsidiary of the Company, under debt securities (or guarantees
in respect of debt securities) initially issued after the date of this Indenture
to any trust, or a trustee of a trust, partnership or other entity affiliated
with the Company that is, directly or indirectly, a finance subsidiary (as such
term is defined in Rule 3a-5 under the Investment Company Act of 1940) or other
financing vehicle of the Company or any Subsidiary of the Company in connection
with the issuance by that entity of preferred securities or other securities
that are eligible to qualify for Tier 1 capital treatment (or its then
equivalent) for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Company (or, if the Company is
not a bank holding company, such guidelines applied to the Company as if the
Company were subject to such guidelines); provided, however, that the inability
of the Company to treat all or any portion of the Additional Junior Indebtedness
as Tier 1 capital shall not disqualify it as Additional Junior Indebtedness if


                                       1
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such inability results from the Company having cumulative preferred stock,
minority interests in consolidated subsidiaries, or any other class of security
or interest which the Federal Reserve now or may hereafter accord Tier 1 capital
treatment (including the Debentures) in excess of the amount which may qualify
for treatment as Tier 1 capital under applicable capital adequacy guidelines.

         "Additional Sums" has the meaning set forth in Section 3.6.

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

         "Applicable Depositary Procedures" means, with respect to any transfer
or transaction involving a Global Debenture or beneficial interest therein, the
rules and procedures of the Depositary for such Debenture, in each case to the
extent applicable to such transaction and as in effect from time to time.

         "Authenticating Agent" means any agent or agents of the Trustee which
at the time shall be appointed and acting pursuant to Section 6.12.

         "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.

         "Board of Directors" means the board of directors or the executive
committee or any other duly authorized designated officers of the Company.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.

         "Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York City or Wilmington, Delaware are
permitted or required by any applicable law or executive order to close.

         "Capital Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence and continuance of an Event of
Default (as defined in the Declaration), the rights of holders of such Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights of holders of such
Capital Securities.

         "Capital Securities Guarantee" means the guarantee agreement that the
Company enters into with Wilmington Trust Company, as guarantee trustee, or
other Persons that operates directly or indirectly for the benefit of holders of
Capital Securities of the Trust.

         "Capital Treatment Event" means the receipt by the Company 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 Company 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 Company (or if the Company is not a bank holding company, such
guidelines applied to the Company as if the Company were subject to such
guidelines); provided, however, that the inability of the Company to treat all


                                       2
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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 Company 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.

         "Certificate" means a certificate signed by any one of the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company.

         "Common Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with Capital Securities issued by the Trust;
provided, however, that upon the occurrence and continuance of an Event of
Default (as defined in the Declaration), the rights of holders of such Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights of holders of such
Capital Securities.

         "Company" means Temecula Valley Bancorp Inc., a California corporation,
and, subject to the provisions of Article XI, shall include its successors and
assigns.

         "Coupon Rate" has the meaning set forth in Section 2.8.

         "Debenture" or "Debentures" has the meaning stated in the first recital
of this Indenture.

         "Debenture Register" has the meaning specified in Section 2.5.

         "Declaration" means the Amended and Restated Declaration of Trust of
the Trust, as amended or supplemented from time to time.

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

         "Defaulted Interest" has the meaning set forth in Section 2.8.

         "Depositary" means an organization registered as a clearing agency
under the Exchange Act that is designated as Depositary by the Company or any
successor thereto. The initial Depositary will be DTC.

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

         "Distribution Period" means (i) with respect to interest paid on the
first Interest Payment Date, the period beginning on (and including) the date of
original issuance and ending on (but excluding) the Interest Payment Date in
December 2005 and (ii) thereafter, with respect to interest paid on each
successive Interest Payment Date, the period beginning on (and including) the
preceding Interest Payment Date and ending on (but excluding) such current
Interest Payment Date.

         "Determination Date" has the meaning set forth in Section 2.10.

         "DTC" means the Depository Trust Company, a New York corporation.

                                       3
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         "Event of Default" means any event specified in Section 5.1, continued
for the period of time, if any, and after the giving of the notice, if any,
therein designated.

         "Extension Period" has the meaning set forth in Section 2.11.

         "Federal Reserve" means 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
bank holding companies.

         "Global Debenture" means a security that evidences all or part of the
Debentures, the ownership and transfers of which shall be made through book
entries by a Depositary.

         "Indenture" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented, or both.

         "Institutional Trustee" has the meaning set forth in the Declaration.

         "Interest Payment Date" means March 15, June 15, September 15 and
December 15 of each year during the term of this Indenture, or if such day is
not a Business Day, then the next succeeding Business Day (it being understood
that interest accrues for any such non-Business Day), commencing in December
2005.

         "Interest Rate" means for the Distribution Period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Interest Payment Date in December 2005 the rate per annum of 5.42038%, and for
each Distribution Period beginning on or after the Interest Payment Date in
December 2005, the Coupon Rate for such Distribution Period.

         "Investment Company Event" means the receipt by the Company and the
Trust of an opinion of counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or written change
(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Trust is
or, within 90 days of the date of such opinion will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended 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.

         "Liquidation Amount" means the stated amount of $1,000.00 per Trust
Security.

         "Maturity Date" means December 15, 2035.

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the Vice Chairman, the President, any
Managing Director or any Vice President, and by the Treasurer, an Assistant
Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 14.6 if and to
the extent required by the provisions of such Section.

         "Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or may be other
counsel reasonably satisfactory to the Trustee. Each such opinion shall include
the statements provided for in Section 14.6 if and to the extent required by the
provisions of such Section.


                                       4
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         "OTS" means the Office of Thrift Supervision and any successor federal
agency that is primarily responsible for regulating the activities of savings
and loan holding companies.

         The term "outstanding," when used with reference to Debentures, means,
subject to the provisions of Section 7.4, as of any particular time, all
Debentures authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except:

         (a) Debentures theretofore canceled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;

         (b) Debentures, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that, if such Debentures, or portions
thereof, are to be redeemed prior to maturity thereof, notice of such redemption
shall have been given as provided in Section 10.3 or provision satisfactory to
the Trustee shall have been made for giving such notice; and

         (c) Debentures paid pursuant to Section 2.6 or in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.6 unless proof satisfactory to the
Company and the Trustee is presented that any such Debentures are held by bona
fide holders in due course.

         "Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

         "Predecessor Security" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for purposes of this definition, any Debenture
authenticated and delivered under Section 2.6 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.

         "Principal Office of the Trustee," or other similar term, means the
office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered, which at the time of the execution
of this Indenture shall be Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-1600, Attention: Corporate Trust Administration.

         "Redemption Date" has the meaning set forth in Section 10.1.

         "Redemption Price" means 100% of the principal amount of the Debentures
being redeemed, plus accrued and unpaid interest (including any Additional
Interest) on such Debentures to the Redemption Date.

         "Responsible Officer" means, with respect to the Trustee, any officer
within the Principal Office of the Trustee, including any vice-president, any
assistant vice-president, any secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or other officer of the Principal
Trust Office of the 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.

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

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         "Securityholder," "holder of Debentures," or other similar terms, means
any Person in whose name at the time a particular Debenture is registered on the
register kept by the Company or the Trustee for that purpose in accordance with
the terms hereof.

         "Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company for all borrowed and purchased money and (B) indebtedness evidenced by
securities, debentures, notes, bonds or other similar instruments issued by the
Company; (ii) all capital lease obligations of the Company; (iii) all
obligations of the Company issued or assumed as the deferred purchase price of
property, all conditional sale obligations of the Company and all obligations of
the Company under any title retention agreement; (iv) all obligations of the
Company for the reimbursement of any letter of credit, any banker's acceptance,
any security purchase facility, any repurchase agreement or similar arrangement,
any interest rate swap, any other hedging arrangement, any obligation under
options or any similar credit or other transaction; (v) all obligations of the
Company associated with derivative products such as interest and foreign
exchange rate contracts, commodity contracts, and similar arrangements; (vi) all
obligations of the type referred to in clauses (i) through (v) above of other
Persons for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise including, without limitation, similar
obligations arising from off-balance sheet guarantees and direct credit
substitutes; and (vii) all obligations of the type referred to in clauses (i)
through (vi) above of other Persons secured by any lien on any property or asset
of the Company (whether or not such obligation is assumed by the Company),
whether incurred on or prior to the date of this Indenture or thereafter
incurred. Notwithstanding the foregoing, "Senior Indebtedness" shall not include
(1) any Additional Junior Indebtedness, (2) Debentures issued pursuant to this
Indenture and guarantees in respect of such Debentures, (3) trade accounts
payable of the Company arising in the ordinary course of business (such trade
accounts payable being pari passu in right of payment to the Debentures), or (4)
obligations with respect to which (a) in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that such
obligations are pari passu, junior or otherwise not superior in right of payment
to the Debentures and (b) the Company, prior to the issuance thereof, has
notified (and, if then required under the applicable guidelines of the
regulating entity, has received approval from) the Federal Reserve (if the
Company is a bank holding company) or the OTS (if the Company is a savings and
loan holding company). Senior Indebtedness shall continue to be Senior
Indebtedness and be entitled to the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.

         "Special Event" means any of a Capital Treatment Event, an Investment
Company Event or a Tax Event.

         "Special Redemption Date" has the meaning set forth in Section 10.2.

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

Month in which Special Redemption Date           Special Redemption Price
--------------------------------------           ------------------------
                 Occurs
                 ------
             December 2005                               104.625%
----------------------------------------- --------------------------------------
               March 2006                                104.300%
----------------------------------------- --------------------------------------
               June 2006                                 104.000%
----------------------------------------- --------------------------------------
             September 2006                              103.650%
----------------------------------------- --------------------------------------
             December 2006                               103.350%
----------------------------------------- --------------------------------------
               March 2007                                103.000%
----------------------------------------- --------------------------------------
               June 2007                                 102.700%
----------------------------------------- --------------------------------------
             September 2007                              102.350%
----------------------------------------- --------------------------------------
             December 2007                               102.050%
----------------------------------------- --------------------------------------
               March 2008                                101.700%
----------------------------------------- --------------------------------------
               June 2008                                 101.400%
----------------------------------------- --------------------------------------
             September 2008                              101.050%
----------------------------------------- --------------------------------------
             December 2008                               100.750%
----------------------------------------- --------------------------------------
               March 2009                                100.450%
----------------------------------------- --------------------------------------
               June 2009                                 100.200%
----------------------------------------- --------------------------------------
     September 2009 and thereafter                       100.000%
----------------------------------------- --------------------------------------

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<PAGE>


         plus, in each case, accrued and unpaid interest (including any
Additional Interest) on such Debentures to the Special Redemption Date.

         "Subsidiary" means with respect to any Person, (i) any corporation at
least a majority of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of the outstanding partnership or
similar interests of which shall at the time be owned by such Person, or by one
or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries and (iii) any limited partnership of which such Person or any of
its Subsidiaries is a general partner. For the purposes of this definition,
"voting stock" means shares, interests, participations or other equivalents in
the equity interest (however designated) in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of
such Person, other than shares, interests, participations or other equivalents
having such power only by reason of the occurrence of a contingency.

         "Tax Event" means the receipt by the Company 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 Company 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



                                       7
<PAGE>

received or accrued on the Debentures; (ii) interest payable by the Company on
the Debentures is not, or within 90 days of the date of such opinion, will not
be, deductible by the Company, 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.

         "3-Month LIBOR" has the meaning set forth in Section 2.10.

         "Telerate Page 3750" has the meaning set forth in Section 2.10.

         "Trust" shall mean Temecula Valley Statutory Trust IV, a Delaware
statutory trust, or any other similar trust created for the purpose of issuing
Capital Securities in connection with the issuance of Debentures under this
Indenture, of which the Company is the sponsor.

         "Trust Securities" means Common Securities and Capital Securities of
the Trust.

         "Trustee" means Wilmington Trust Company, and, subject to the
provisions of Article VI hereof, shall also include its successors and assigns
as Trustee hereunder.

                                   ARTICLE II.
                                   DEBENTURES
                                   ----------

          Section 2.1.  Authentication and Dating. Upon the execution and
delivery of this  Indenture,  or from time to time  thereafter,  Debentures  in
an aggregate principal amount not in excess of $8,248,000.00 may be executed and
delivered by the Company to the Trustee for authentication,  and the Trustee,
upon receipt of a written  authentication order from the Company,  shall
thereupon  authenticate and make available for delivery said  Debentures to or
upon the written order of the Company,  signed by its Chairman of the Board of
Directors,  Chief Executive Officer, Vice Chairman,  the President,  one of its
Managing Directors or one of its Vice  Presidents  without  any  further  action
by the  Company  hereunder. Notwithstanding  anything to the contrary contained
herein, the Trustee shall be fully  protected in relying  upon the
aforementioned  authentication  order and written  order  in   authenticating
and   delivering   said   Debentures.   In authenticating  such Debentures,  and
accepting the additional  responsibilities under this  Indenture  in relation
to such  Debentures,  the  Trustee  shall be entitled to receive,  and (subject
to Section  6.1) shall be fully  protected in relying upon:

          (a)  a copy of any  Board  Resolution  or Board  Resolutions  relating
               thereto and, if applicable,  an appropriate  record of any action
               taken pursuant to such resolution,  in each case certified by the
               Secretary or an Assistant  Secretary of the Company,  as the case
               may be; and

          (b)  an Opinion of Counsel  prepared in  accordance  with Section 14.6
               which shall also state:

                    (1)  that such Debentures,  when authenticated and delivered
                         by the  Trustee  and issued by the Company in each case
                         in the manner and subject to any  conditions  specified
                         in such Opinion of Counsel,  will constitute  valid and
                         legally binding obligations of the Company,  subject to
                         or  limited  by  applicable   bankruptcy,   insolvency,
                         reorganization,      conservatorship,     receivership,
                         moratorium  and  other  statutory  or  decisional  laws
                         relating  to or  affecting  creditors'  rights  or  the
                         reorganization  of financial  institutions  (including,
                         without    limitation,    preference   and   fraudulent
                         conveyance or transfer  laws),  heretofore or hereafter
                         enacted or in effect, affecting the rights of creditors
                         generally; and

                                       8
<PAGE>

                    (2)  that  all  laws  and  requirements  in  respect  of the
                         execution and delivery by the Company of the Debentures
                         have been  complied  with and that  authentication  and
                         delivery  of the  Debentures  by the  Trustee  will not
                         violate the terms of this Indenture.

         The Trustee shall have the right to decline to authenticate and deliver
any Debentures under this Section if the Trustee, being advised in writing by
counsel, determines that such action may not lawfully be taken or if a
Responsible Officer of the Trustee in good faith shall determine that such
action would expose the Trustee to personal liability to existing holders.

         The definitive Debentures shall be typed, printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Debentures, as evidenced by their
execution of such Debentures.

         Section 2.2. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of  authentication  on all Debentures shall be in
substantially  the following form:

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

         WILMINGTON TRUST COMPANY, as Trustee

         By
           ---------------------------------------------------
         Authorized Signer

        Section 2.3. Form and  Denomination of Debentures.  The Debentures shall
be substantially in the form of Exhibit A attached hereto.  The Debentures shall
be in registered, certificated form without coupons and in minimum denominations
of $100,000.00  and any  multiple of  $1,000.00 in excess  thereof.  Any
attempted transfer of the  Debentures in a block having an aggregate  principal
amount of less  than  $100,000.00  shall  be  deemed  to be void  and of no
legal  effect whatsoever.  Any such purported transferee shall be deemed not to
be a holder of such  Debentures for any purpose,  including,  but not limited to
the receipt of payments on such  Debentures,  and such purported  transferee
shall be deemed to have no  interest  whatsoever  in  such  Debentures.  The
Debentures  shall  be numbered,  lettered, or otherwise  distinguished in such
manner or in accordance with  such  plans as the  officers  executing  the same
may  determine  with the approval  of the  Trustee  as  evidenced  by the
execution  and  authentication thereof.

         Section 2.4. Execution of Debentures. The Debentures shall be signed in
the name and on behalf of the Company by the manual or  facsimile  signature  of
its Chairman of the Board of Directors,  Chief  Executive  Officer,  Vice
Chairman, President,  one  of  its  Managing  Directors  or  one  of  its
Executive  Vice Presidents,  Senior Vice Presidents or Vice Presidents.  Only
such Debentures as shall bear thereon a certificate  of  authentication
substantially  in the form herein before recited,  executed by the Trustee or
the  Authenticating  Agent by the manual signature of an authorized signer,
shall be entitled to the benefits of this Indenture or be valid or obligatory
for any purpose. Such certificate by the  Trustee or the  Authenticating  Agent
upon any  Debenture  executed  by the Company shall be conclusive  evidence
that the Debenture so  authenticated  has been duly authenticated and delivered
hereunder and that the holder is entitled to the benefits of this Indenture.

         In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee or the Authenticating
Agent, or disposed of by the Company, such Debentures nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such
Debentures had not ceased to be such officer of the Company; and any Debenture
may be signed on behalf of the Company by such Persons as, at the actual date of
the execution of such Debenture, shall be the proper officers of the Company,


                                       9
<PAGE>

although at the date of the execution of this Indenture any such person was not
such an officer.

         Every Debenture shall be dated the date of its authentication.

         Section 2.5. Exchange and Registration of Transfer of Debentures. The
Company shall cause to be kept, at the office or agency maintained for the
purpose of registration of transfer and for exchange as provided in Section 3.2,
a register (the "Debenture Register") for the Debentures issued hereunder in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration and transfer of all Debentures as in this
Article II provided. The Debenture Register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time.

         Debentures to be exchanged may be surrendered at the Principal Office
of the Trustee or at any office or agency to be maintained by the Company for
such purpose as provided in Section 3.2, and the Company shall execute, the
Company or the Trustee shall register and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery in exchange therefor
the Debenture or Debentures which the Securityholder making the exchange shall
be entitled to receive. Upon due presentment for registration of transfer of any
Debenture at the Principal Office of the Trustee or at any office or agency of
the Company maintained for such purpose as provided in Section 3.2, the Company
shall execute, the Company or the Trustee shall register and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in the
name of the transferee or transferees a new Debenture for a like aggregate
principal amount. Registration or registration of transfer of any Debenture by
the Trustee or by any agent of the Company appointed pursuant to Section 3.2,
and delivery of such Debenture, shall be deemed to complete the registration or
registration of transfer of such Debenture.

         All Debentures presented for registration of transfer or for exchange
or payment shall (if so required by the Company or the Trustee or the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Trustee or the Authenticating Agent duly executed by the holder or his
attorney duly authorized in writing.

         No service charge shall be made for any exchange or registration of
transfer of Debentures, but the Company or the Trustee may require payment of a
sum sufficient to cover any tax, fee or other governmental charge that may be
imposed in connection therewith.

         The Company or the Trustee shall not be required to exchange or
register a transfer of any Debenture for a period of 15 days next preceding the
date of selection of Debentures for redemption.

         Notwithstanding anything herein to the contrary, Debentures may not be
transferred except in compliance with the restricted securities legend set forth
below, unless otherwise determined by the Company, upon the advice of counsel
expert in securities law, in accordance with applicable law:

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

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


                                       10
<PAGE>

REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE
WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.

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

         THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000.00 AND MULTIPLES
OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A


                                       11
<PAGE>

BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000.00 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

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

         Section 2.6. Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company shall execute, and upon its written request the Trustee shall
authenticate and deliver, a new Debenture bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case the applicant for a substituted Debenture shall furnish to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, and, in every case of destruction, loss or theft,
the applicant shall also furnish to the Company and the Trustee evidence to
their satisfaction of the destruction, loss or theft of such Debenture and of
the ownership thereof.

         The Trustee may authenticate any such substituted Debenture and deliver
the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substituted Debenture, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses connected
therewith. In case any Debenture which has matured or is about to mature or has
been called for redemption in full shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Debenture) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless and, in case of destruction, loss or theft, evidence
satisfactory to the Company and to the Trustee of the destruction, loss or theft
of such Debenture and of the ownership thereof.

         Every substituted Debenture issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any such Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debentures duly issued hereunder. All
Debentures shall be held and owned upon the express condition that, to the
extent permitted by applicable law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.

         Section 2.7. Temporary Debentures. Pending the preparation of
definitive Debentures, the Company may execute and the Trustee shall
authenticate and make available for delivery temporary Debentures that are
typed, printed or lithographed. Temporary Debentures shall be issuable in any
authorized denomination, and substantially in the form of the definitive
Debentures in lieu of which they are issued but with such omissions, insertions
and variations as may be appropriate for temporary Debentures, all as may be
determined by the Company. Every such temporary Debenture shall be executed by
the Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the definitive
Debentures. Without unreasonable delay the Company will execute and deliver to
the Trustee or the Authenticating Agent definitive Debentures and thereupon any
or all temporary Debentures may be surrendered in exchange therefor, at the
principal corporate trust office of the Trustee or at any office or agency
maintained by the Company for such purpose as provided in Section 3.2, and the


                                       12
<PAGE>

Trustee or the Authenticating Agent shall authenticate and make available
for  delivery  in  exchange  for  such  temporary  Debentures  a like  aggregate
principal amount of such definitive  Debentures.  Such exchange shall be made by
the Company at its own expense  and without any charge  therefor  except that in
case of any such exchange  involving a registration  of transfer the Company may
require payment of a sum sufficient to cover any tax, fee or other  governmental
charge  that  may be  imposed  in  relation  thereto.  Until so  exchanged,  the
temporary  Debentures  shall in all  respects be  entitled to the same  benefits
under this  Indenture  as  definitive  Debentures  authenticated  and  delivered
hereunder.

         Section 2.8. Payment of Interest and Additional Interest. Interest at
the Interest Rate and any Additional Interest on any Debenture that is payable,
and is punctually paid or duly provided for, on any Interest Payment Date for
Debentures shall be paid to the Person in whose name said Debenture (or one or
more Predecessor Securities) is registered at the close of business on the
regular record date for such interest installment except that interest and any
Additional Interest payable on the Maturity Date shall be paid to the Person to
whom principal is paid.

         Each Debenture shall bear interest for the period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Interest Payment Date in December 2005 at a rate per annum of 5.42038%, and
shall bear interest for each successive Distribution Period beginning on or
after the Interest Payment Date in December 2005 at a rate per annum equal to
the 3-Month LIBOR, determined as described in Section 2.10, plus 1.40% (the
"Coupon Rate"), applied to the principal amount thereof, until the principal
thereof becomes due and payable, and on any overdue principal and to the extent
that payment of such interest is enforceable under applicable law (without
duplication) on any overdue installment of interest (including Additional
Interest) at the Interest Rate in effect for each applicable period compounded
quarterly. Interest shall be payable (subject to any relevant Extension Period)
quarterly in arrears on each Interest Payment Date with the first installment of
interest to be paid on the Interest Payment Date in December 2005.

         Any interest on any Debenture, including Additional Interest, that is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company to the Persons in whose names such Debentures (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Company shall notify the Trustee in writing at least
25 days prior to the date of the proposed payment of the amount of Defaulted
Interest proposed to be paid on each such Debenture and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall not
be more than 15 nor less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first class postage prepaid, to each Securityholder
at its address as it appears in the Debenture Register, not less than 10 days
prior to such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
such Debentures (or their respective Predecessor Securities) are registered on
such special record date and shall be no longer payable.

                                       13
<PAGE>

         The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner after notice given by the Company to the
Trustee of the proposed payment method; provided, however, the Trustee in its
sole discretion deems such payment method to be practical.

         Any interest (including Additional Interest) scheduled to become
payable on an Interest Payment Date occurring during an Extension Period shall
not be Defaulted Interest and shall be payable on such other date as may be
specified in the terms of such Debentures.

         The term "regular record date" as used in this Section shall mean the
close of business on the 15th Business Day preceding the applicable Interest
Payment Date.

         Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debenture shall carry the rights to interest accrued
and unpaid, and to accrue, that were carried by such other Debenture.

         Section  2.9.   Cancellation of Debentures Paid,  etc.  All  Debentures
surrendered for the purpose of payment, redemption,  exchange or registration of
transfer,  shall,  if  surrendered  to the  Company  or  any  paying  agent,  be
surrendered  to the Trustee and promptly  canceled by it, or, if  surrendered to
the Trustee or any  Authenticating  Agent, shall be promptly canceled by it, and
no Debentures  shall be issued in lieu thereof except as expressly  permitted by
any  of the  provisions  of  this  Indenture.  All  Debentures  canceled  by any
Authenticating  Agent shall be  delivered  to the  Trustee.  The  Trustee  shall
destroy all canceled Debentures unless the Company otherwise directs the Trustee
in writing.  If the Company shall acquire any of the Debentures,  however,  such
acquisition   shall  not  operate  as  a  redemption  or   satisfaction  of  the
indebtedness  represented  by such  Debentures  unless  and  until  the same are
surrendered to the Trustee for cancellation.

         Section 2.10.  Computation of Interest. The amount of interest payable
for each Distribution Period will be calculated by applying the Interest Rate to
the principal 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
Debentures will be rounded, if necessary,  to the nearest one hundred-thousandth
of a percentage  point,  with five  one-millionths of a percentage point rounded
upward (e.g.,  9.876545% (or .09876545) being rounded to 9.87655% (or .0987655),
and all  dollar  amounts  used in or  resulting  from such  calculation  will be
rounded to the nearest cent (with one-half cent being rounded upward)).

          (a)  "3-Month LIBOR" means the London interbank  offered interest rate
               for three-month,  U.S. dollar deposits  determined by the 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 Moneyline 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 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;

                                       14
<PAGE>

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

                  (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.

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

          (c)  "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.

          (d)  The Trustee shall notify the Company,  the Institutional  Trustee
               and any securities  exchange or interdealer  quotation  system on
               which the Capital  Securities are listed,  of the Coupon Rate and
               the Determination Date for each Distribution Period, in each case
               as soon as practicable after the determination  thereof but in no
               event  later  than  the  thirtieth  (30th)  day of  the  relevant
               Distribution   Period.   Failure  to  notify  the  Company,   the
               Institutional  Trustee or any securities  exchange or interdealer
               quotation system, or any defect in said notice,  shall not affect
               the  obligation of the Company to make payment on the  Debentures
               at the applicable  Coupon Rate.  Any error in the  calculation of
               the Coupon Rate by the Trustee  may be  corrected  at any time by
               notice delivered as above provided.  Upon the request of a holder
               of a Debenture, the Trustee shall provide the Coupon Rate then in
               effect  and,  if  determined,   the  Coupon  Rate  for  the  next
               Distribution Period.

          (e)  Subject  to  the   corrective   rights  set  forth   above,   all
               certificates,     communications,    opinions,    determinations,
               calculations,  quotations and decisions given, expressed, made or
               obtained  for the  purposes  of the  provisions  relating  to the
               payment  and  calculation  of  interest  on  the  Debentures  and
               distributions  on the  Capital  Securities  by the Trustee or the
               Institutional  Trustee  will (in the absence of willful  default,
               bad faith and manifest error) be final, conclusive and binding on
               the Trust,  the Company and all of the holders of the  Debentures
               and  the  Capital  Securities,  and no  liability  shall  (in the
               absence of willful  default,  bad faith or manifest error) attach
               to the Trustee or the  Institutional  Trustee in connection  with
               the  exercise  or   non-exercise  by  either  of  them  or  their
               respective powers, duties and discretion.

         Section  2.11.  Extension of Interest Payment Period.  So  long  as  no
Acceleration Event of Default has occurred and is continuing,  the Company shall
have the right,  from time to time, and without causing an Event of Default,  to
defer payments of interest on the  Debentures by extending the interest  payment
period on the  Debentures  at any time and from time to time  during the term of
the Debentures,  for up to 20 consecutive  quarterly periods (each such extended
interest payment period, an "Extension  Period"),  during which Extension Period
no interest (including Additional Interest) shall be due and payable (except any
Additional Sums that may be due and payable).  No Extension  Period may end on a
date other than an Interest Payment Date. During an Extension  Period,  interest
will continue to accrue on the Debentures, and interest on such accrued interest
will  accrue at an annual  rate  equal to the  Interest  Rate in effect for such


                                       15
<PAGE>

Extension  Period,  compounded  quarterly from the date such interest would have
been payable were it not for the Extension  Period,  to the extent  permitted by
law (such interest referred to herein as "Additional  Interest").  At the end of
any such  Extension  Period the Company  shall pay all interest then accrued and
unpaid on the Debentures (together with Additional Interest thereon);  provided,
however,  that no Extension Period may extend beyond the Maturity Date; provided
further,  however,  that during any such Extension Period, the Company shall not
and shall not permit  any  Affiliate  to (i)  declare  or pay any  dividends  or
distributions on, or redeem,  purchase,  acquire,  or make a liquidation payment
with respect to, any of the Company's or such  Affiliate's  capital stock (other
than  payments  of  dividends  or  distributions  to the  Company)  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 Company or any Affiliate that rank pari passu in all
respects with or junior in interest to the Debentures  (other than, with respect
to clauses (i) or (ii) above, (a) repurchases, redemptions or other acquisitions
of shares of capital  stock of the  Company in  connection  with any  employment
contract,  benefit plan or other similar  arrangement with or for the benefit of
one or more employees,  officers, directors or consultants, in connection with a
dividend  reinvestment or stockholder  stock purchase plan or in connection with
the issuance of capital stock of the Company (or securities  convertible into or
exercisable  for  such  capital  stock)  as   consideration  in  an  acquisition
transaction  entered into prior to the  applicable  Extension  Period,  (b) as a
result of any  exchange or  conversion  of any class or series of the  Company's
capital  stock (or any capital  stock of a  subsidiary  of the  Company) for any
class or series of the Company's  capital stock or of any class or series of the
Company's  indebtedness for any class or series of the Company's  capital stock,
(c) the  purchase of  fractional  interests in shares of the  Company's  capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged,  (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 Company may further extend
such  period,  provided  that such period  together  with all such  previous and
further consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods,  or extend  beyond  the  Maturity  Date.  Upon the  termination  of any
Extension  Period and upon the payment of all accrued  and unpaid  interest  and
Additional Interest, the Company may commence a new Extension Period, subject to
the foregoing requirements.  No interest or Additional Interest shall be due and
payable  during  an  Extension  Period,  except  at the end  thereof,  but  each
installment  of interest that would  otherwise  have been due and payable during
such Extension Period shall bear Additional  Interest to the extent permitted by
applicable  law.  The Company  must give the Trustee  notice of its  election to
begin or  extend  an  Extension  Period  by the  close of  business  at least 15
Business Days prior to the Interest  Payment Date with respect to which interest
on the  Debentures  would have been payable  except for the election to begin or
extend such  Extension  Period.  The Trustee  shall give notice of the Company's
election to begin a new Extension Period to the Securityholders.

         Section 2.12. CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use CUSIP numbers in notices of redemption as a convenience to  Securityholders;
provided, however, that any such notice may state that no representation is made
as to the  correctness of such numbers either as printed on the Debentures or as
contained in any notice of a redemption  and that reliance may be placed only on
the  other  identification  numbers  printed  on the  Debentures,  and any  such
redemption  shall not be affected by any defect in or omission of such  numbers.
The  Company  will  promptly  notify the Trustee in writing of any change in the
CUSIP numbers.


                                       16
<PAGE>

         Section 2.13. Global Debentures.

          (a)  Upon the election of the holder of outstanding Debentures,  which
               election  need not be in writing,  the  Debentures  owned by such
               holder  shall  be  issued  in the  form  of one  or  more  Global
               Debentures  registered  in  the  name  of the  Depositary  or its
               nominee.  Each Global Debenture issued under this Indenture shall
               be  registered  in the name of the  Depositary  designated by the
               Company for such Global Debenture or a nominee thereof, delivered
               to such Depositary or a nominee thereof or custodian therefor and
               shall  contain such legends as may be required by the  Depositary
               and  each  such  Global   Debenture  shall  constitute  a  single
               Debenture for all purposes of this Indenture.

          (b)  Notwithstanding any other provision in this Indenture,  no Global
               Debenture  may be  exchanged  in whole or in part for  Debentures
               registered,  and no transfer of a Global Debenture in whole or in
               part may be registered,  in the name of any Person other than the
               Depositary for such Global  Debenture or a nominee thereof unless
               (i) such  Depositary  advises  the  Trustee  and the  Company  in
               writing  that such  Depositary  is no longer  willing  or able to
               properly  discharge  its   responsibilities  as  Depositary  with
               respect to such Global Debenture,  and no qualified  successor is
               appointed  by the Company  within  ninety (90) days of receipt by
               the Company of such notice,  (ii) such Depositary  ceases to be a
               clearing  agency   registered  under  the  Exchange  Act  and  no
               successor  is appointed  by the Company  within  ninety (90) days
               after  obtaining  knowledge  of such  event,  (iii)  the  Company
               executes and delivers to the Trustee a Company order stating that
               the Company elects to terminate the book-entry system through the
               Depositary or (iv) an Event of Default shall have occurred and be
               continuing.  Upon the occurrence of any event specified in clause
               (i),  (ii),  (iii) or (iv) above,  the Trustee  shall  notify the
               Depositary  and instruct the  Depositary  to notify all owners of
               beneficial  interests in such Global  Debenture of the occurrence
               of such  event  and of the  availability  of  Debentures  to such
               owners of  beneficial  interests  requesting  the same.  Upon the
               issuance of such Debentures and the registration in the Debenture
               Register  of such  Debentures  in the names of the holders of the
               beneficial  interests  therein,  the Trustee shall recognize such
               holders of beneficial interests as holders.

          (c)  If any Global  Debenture is to be exchanged for other  Debentures
               or canceled in part,  or if another  Debenture is to be exchanged
               in whole  or in part  for a  beneficial  interest  in any  Global
               Debenture,  then  either (i) such  Global  Debenture  shall be so
               surrendered  for  exchange  or  cancellation  as provided in this
               Article II or (ii) the principal  amount thereof shall be reduced
               or increased  by an amount equal to the portion  thereof to be so
               exchanged or canceled,  or equal to the principal  amount of such
               other  Debentures  to be so exchanged  for a beneficial  interest
               therein,  as  the  case  may  be,  by  means  of  an  appropriate
               adjustment  made  on  the  records  of the  Debenture  registrar,
               whereupon  the  Trustee,   in  accordance   with  the  Applicable
               Depositary  Procedures,  shall  instruct  the  Depositary  or its
               authorized  representative to make a corresponding  adjustment to
               its records.  Upon any such  surrender or  adjustment of a Global
               Debenture  by  the   Depositary,   accompanied  by   registration
               instructions,  the Company  shall  execute and the Trustee  shall
               authenticate and deliver any Debentures  issuable in exchange for
               such Global Debenture (or any portion thereof) in accordance with
               the  instructions  of the  Depositary.  The Trustee  shall not be
               liable for any delay in  delivery  of such  instructions  and may
               conclusively rely on, and shall be fully protected in relying on,
               such instructions.

          (d)  Every Debenture  authenticated and delivered upon registration of
               transfer of, or in exchange for or in lieu of, a Global Debenture
               or any portion  thereof shall be  authenticated  and delivered in
               the form of,  and  shall  be, a  Global  Debenture,  unless  such
               Debenture  is  registered  in the name of a Person other than the
               Depositary for such Global Debenture or a nominee thereof.

          (e)  Debentures   distributed   to  holders  of   Book-Entry   Capital
               Securities (as defined in the  Declaration)  upon the dissolution
               of the  Trust  shall  be  distributed  in the form of one or more
               Global  Debentures  registered in the name of a Depositary or its
               nominee,  and  deposited  with  the  Debentures   registrar,   as
               custodian  for such  Depositary,  or with  such  Depositary,  for
               credit  by the  Depositary  to  the  respective  accounts  of the
               beneficial owners of the Debentures  represented thereby (or such

                                       17
<PAGE>


               other  accounts as they may direct).  Debentures  distributed  to
               holders  of Capital  Securities  other  than  Book-Entry  Capital
               Securities  upon the dissolution of the Trust shall not be issued
               in the form of a Global  Debenture or any other form  intended to
               facilitate  book-entry  trading in  beneficial  interests in such
               Debentures.

          (f)  The  Depositary  or its  nominee,  as the  registered  owner of a
               Global  Debenture,  shall be the holder of such Global  Debenture
               for all purposes  under this  Indenture and the  Debentures,  and
               owners of beneficial  interests in a Global  Debenture shall hold
               such interests pursuant to the Applicable Depositary  Procedures.
               Accordingly,  any such  owner's  beneficial  interest in a Global
               Debenture  shall  be  shown  only on,  and the  transfer  of such
               interest  shall be effected only through,  records  maintained by
               the Depositary or its nominee or its Depositary Participants. The
               Debentures  registrar  and the Trustee  shall be entitled to deal
               with  the  Depositary  for  all  purposes  under  this  Indenture
               relating  to  a  Global  Debenture   (including  the  payment  of
               principal and interest  thereon and the giving of instructions or
               directions  by owners of  beneficial  interests  therein  and the
               giving of notices) as the sole holder of the  Debenture and shall
               have  no  obligations  to  the  owners  of  beneficial  interests
               therein.  Neither the Trustee nor the Debentures  registrar shall
               have any  liability in respect of any  transfers  effected by the
               Depositary.

          (g)  The  rights  of  owners  of  beneficial  interests  in  a  Global
               Debenture  shall be  exercised  only through the  Depositary  and
               shall be  limited  to  those  established  by law and  agreements
               between  such  owners and the  Depositary  and/or its  Depositary
               Participants.

          (h)  No holder of any beneficial interest in any Global Debenture held
               on its behalf by a  Depositary  shall have any rights  under this
               Indenture  with  respect  to  such  Global  Debenture,  and  such
               Depositary  may be treated by the  Company,  the  Trustee and any
               agent of the  Company or the  Trustee as the owner of such Global
               Debenture for all purposes  whatsoever.  None of the Company, the
               Trustee nor any agent of the Company or the Trustee will have any
               responsibility  or  liability  for  any  aspect  of  the  records
               relating to or payments made on account of  beneficial  ownership
               interests of a Global  Debenture or  maintaining,  supervising or
               reviewing  any  records  relating  to such  beneficial  ownership
               interests.  Notwithstanding  the foregoing,  nothing herein shall
               prevent the  Company,  the Trustee or any agent of the Company or
               the  Trustee  from giving  effect to any  written  certification,
               proxy or other authorization furnished by a Depositary or impair,
               as between a Depositary and such holders of beneficial interests,
               the  operation of customary  practices  governing the exercise of
               the rights of the  Depositary  (or its  nominee) as holder of any
               Debenture.

                                  ARTICLE III.
                       PARTICULAR COVENANTS OF THE COMPANY
                       -----------------------------------

         Section 3.1. Payment of Principal, Premium and Interest; Agreed
Treatment of the Debentures.

          (a)  The Company covenants and agrees that it will duly and punctually
               pay or cause to be paid the principal of and premium, if any, and
               interest and any  Additional  Interest and other  payments on the
               Debentures  at the  place,  at the  respective  times  and in the
               manner  provided  in  this  Indenture  and the  Debentures.  Each
               installment  of  interest  on the  Debentures  may be paid (i) by
               mailing  checks  for such  interest  payable  to the order of the
               holders of  Debentures  entitled  thereto  as they  appear on the
               registry  books of the Company if a request  for a wire  transfer
               has not been  received by the Company or (ii) by wire transfer to
               any  account  with a banking  institution  located  in the United
               States  designated  in writing by such Person to the paying agent
               no later  than  the  related  record  date.  Notwithstanding  the


                                       18
<PAGE>

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

          (b)  The Company will treat the  Debentures as  indebtedness,  and the
               amounts  payable  in  respect  of the  principal  amount  of such
               Debentures as interest,  for all United States federal income tax
               purposes. All payments in respect of such Debentures will be made
               free and clear of United States withholding tax to any beneficial
               owner thereof that has provided an Internal  Revenue Service Form
               W8 BEN (or any  substitute or successor  form)  establishing  its
               non-United  States  status for United States  federal  income tax
               purposes.

          (c)  As of the date of this  Indenture,  the  Company  has no  present
               intention  to  exercise  its right  under  Section  2.11 to defer
               payments of interest on the Debentures by commencing an Extension
               Period.

          (d)  As of the date of this Indenture,  the Company  believes that the
               likelihood that it would exercise its right under Section 2.11 to
               defer  payments of interest on the  Debentures  by  commencing an
               Extension  Period at any time  during  which the  Debentures  are
               outstanding is remote because of the  restrictions  that would be
               imposed on the  Company's  ability to declare or pay dividends or
               distributions  on, or to redeem,  purchase or make a  liquidation
               payment with respect to, any of its outstanding equity and on the
               Company's  ability  to  make  any  payments  of  principal  of or
               interest on, or repurchase or redeem,  any of its debt securities
               that rank pari passu in all respects  with (or junior in interest
               to) the Debentures.

         Section 3.2.  Offices for Notices and Payments, etc. So long as any of
the Debentures remain outstanding,  the Company  will  maintain  in  Wilmington,
Delaware, an office or agency where the Debentures may be presented for payment,
an office or agency where the  Debentures may be presented for  registration  of
transfer and for exchange as in this Indenture  provided and an office or agency
where notices and demands to or upon the Company in respect of the Debentures or
of this  Indenture may be served.  The Company will give to the Trustee  written
notice  of the  location  of any such  office  or  agency  and of any  change of
location thereof. Until otherwise designated from time to time by the Company in
a notice to the  Trustee,  or  specified as  contemplated  by Section 2.5,  such
office or agency for all of the above  purposes shall be the office or agency of
the  Trustee.  In case the  Company  shall fail to  maintain  any such office or
agency  in  Wilmington,  Delaware,  or shall  fail to give  such  notice  of the
location or of any change in the location thereof, presentations and demands may
be made and notices may be served at the Principal Office of the Trustee.

         In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside Wilmington, Delaware,
where the Debentures may be presented for registration of transfer and for
exchange in the manner provided in this Indenture, and the Company may from time
to time rescind such designation, as the Company may deem desirable or
expedient; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain any such office or
agency in Wilmington, Delaware, for the purposes above mentioned. The Company
will give to the Trustee prompt written notice of any such designation or
rescission thereof.

         Section  3.3.  Appointments to Fill Vacancies in Trustee's Office.  The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint,  in the manner  provided in Section 6.9, a Trustee,  so that there
shall at all times be a Trustee hereunder.

         Section 3.4. Provision as to Paying Agent.

          (a)  If the  Company  shall  appoint  a paying  agent  other  than the
               Trustee,  it will cause such paying  agent to execute and deliver
               to the Trustee an instrument in which such agent shall agree with
               the Trustee, subject to the provision of this Section 3.4,

                                       19
<PAGE>

          (1)  that it will  hold  all  sums  held by it as such  agent  for the
               payment of the principal of and premium, if any, or interest,  if
               any, on the Debentures (whether such sums have been paid to it by
               the Company or by any other obligor on the  Debentures)  in trust
               for the benefit of the holders of the Debentures;

          (2)  that it will  give  the  Trustee  prompt  written  notice  of any
               failure  by  the  Company  (or  by  any  other   obligor  on  the
               Debentures)  to make any payment of the principal of and premium,
               if any,  or  interest,  if any, on the  Debentures  when the same
               shall be due and payable; and

          (3)  that it will, at any time during the  continuance of any Event of
               Default,  upon the written request of the Trustee,  forthwith pay
               to the Trustee all sums so held in trust by such paying agent.

          (b)  If the Company shall act as its own paying agent,  it will, on or
               before each due date of the principal of and premium,  if any, or
               interest or other payments, if any, on the Debentures, set aside,
               segregate and hold in trust for the benefit of the holders of the
               Debentures  a sum  sufficient  to pay  such  principal,  premium,
               interest or other  payments  so becoming  due and will notify the
               Trustee in writing of any  failure to take such action and of any
               failure  by the  Company  (or  by any  other  obligor  under  the
               Debentures)  to make any payment of the principal of and premium,
               if any, or interest or other payments,  if any, on the Debentures
               when the same shall become due and payable.

         Whenever the Company shall have one or more paying agents for the
Debentures, it will, on or prior to each due date of the principal of and
premium, if any, or interest, if any, on the Debentures, deposit with a paying
agent a sum sufficient to pay the principal, premium, interest or other payments
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto and (unless such paying agent is the Trustee) the Company shall
promptly notify the Trustee in writing of its action or failure to act.

          (c)  Anything in this Section 3.4 to the contrary notwithstanding, the
               Company  may,  at any  time,  for  the  purpose  of  obtaining  a
               satisfaction and discharge with respect to the Debentures, or for
               any other  reason,  pay, or direct any paying agent to pay to the
               Trustee  all sums held in trust by the Company or any such paying
               agent, such sums to be held by the Trustee upon the trusts herein
               contained.

          (d)  Anything in this Section 3.4 to the contrary notwithstanding, the
               agreement  to hold sums in trust as provided in this  Section 3.4
               is subject to Sections 12.3 and 12.4.

         Section 3.5.  Certificate to Trustee. The Company  will  deliver to the
Trustee  on or before  120 days after the end of each  fiscal  year,  so long as
Debentures are outstanding  hereunder,  a Certificate stating that in the course
of the  performance  by the  signers of their  duties as officers of the Company
they would normally have knowledge of any default during such fiscal year by the
Company in the performance of any covenants contained herein, stating whether or
not they have  knowledge of any such default  and, if so,  specifying  each such
default of which the signers have knowledge and the nature and status thereof. A
form of this Certificate is attached hereto as Exhibit B.

         Section 3.6. Additional Sums. If and for so long as the Trust is the
holder of all Debentures and the Trust is required  to pay any additional  taxes
(including withholding taxes), duties, assessments or other governmental charges
as a result  of a Tax  Event,  the  Company  will pay  such  additional  amounts
("Additional  Sums")  on the  Debentures  as shall be  required  so that the net
amounts  received  and  retained  by the Trust  after  paying  taxes  (including
withholding taxes),  duties,  assessments or other governmental  charges will be
equal to the  amounts the Trust  would have  received if no such taxes,  duties,


                                       20
<PAGE>

assessments  or other  governmental  charges had been imposed.  Whenever in this
Indenture or the  Debentures  there is a reference in any context to the payment
of principal of or interest on the  Debentures,  such mention shall be deemed to
include  mention  of  payments  of the  Additional  Sums  provided  for in  this
paragraph to the extent that,  in such  context,  Additional  Sums are,  were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express  mention of the payment of Additional  Sums (if  applicable)  in any
provisions  hereof shall not be construed as excluding  Additional Sums in those
provisions  hereof where such express  mention is not made;  provided,  however,
that the deferral of the payment of interest during an Extension Period pursuant
to Section 2.11 shall not defer the payment of any  Additional  Sums that may be
due and payable.

         Section 3.7.  Compliance with Consolidation Provisions. The Company
will not, while any of the Debentures remain outstanding, consolidate with, or
merge into, or merge into itself, or sell or convey all or substantially all of
its property to any other Person unless the provisions  of Article XI hereof are
complied with.

         Section 3.8. Limitation on Dividends. If Debentures are initially
issued to the Trust or a trustee of such Trust in connection with the issuance
of Trust Securities by the Trust (regardless of whether Debentures continue to
be held by such Trust) and (i) there shall have occurred and be continuing an
Event of Default, (ii) the Company shall be in default with respect to its
payment of any obligations under the Capital Securities Guarantee, or (iii) the
Company shall have given notice of its election to defer payments of interest on
the Debentures by extending the interest payment period as provided herein and
such period, or any extension thereof, shall be continuing, then the Company
shall not, and shall not allow any Affiliate of the Company to, (x) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or  make  a
liquidation  payment with respect to, any of the Company's  capital stock or its
Affiliates'  capital stock (other than payments of dividends or distributions to
the Company) or make any guarantee payments with respect to the foregoing or (y)
make any payment of  principal  of or interest or premium,  if any, on or repay,
repurchase or redeem any debt  securities  of the Company or any Affiliate  that
rank pari passu in all  respects  with or junior in interest  to the  Debentures
(other  than,  with  respect to  clauses  (x) and (y)  above,  (1)  repurchases,
redemptions or other  acquisitions  of shares of capital stock of the Company in
connection  with  any  employment  contract,   benefit  plan  or  other  similar
arrangement  with  or  for  the  benefit  of one or  more  employees,  officers,
directors  or  consultants,  in  connection  with  a  dividend  reinvestment  or
stockholder  stock  purchase plan or in connection  with the issuance of capital
stock of the Company (or securities  convertible  into or  exercisable  for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable  Extension  Period, if any, (2) as a result of any exchange or
conversion of any class or series of the Company's capital stock (or any capital
stock of a subsidiary  of the Company) for any class or series of the  Company's
capital  stock or of any class or series of the Company's  indebtedness  for any
class or series of the Company's  capital stock,  (3) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange  provisions  of such capital stock or the security  being  converted or
exchanged,   (4)  any   declaration  of  a  dividend  in  connection   with  any
stockholders'  rights plan, or the issuance of rights,  stock or other  property
under any  stockholders'  rights plan, or the redemption or repurchase of rights
pursuant thereto,  (5) any dividend in the form of stock,  warrants,  options or
other rights where the dividend  stock or the stock  issuable  upon  exercise of
such  warrants,  options or other  rights is the same stock as that on which the
dividend  is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional  shares issued in connection  therewith,  or
(6) payments under the Capital Securities Guarantee).

         Section 3.9. Covenants as to the Trust. For so long as the Trust
Securities remain outstanding, the Company shall maintain 100% ownership of the
Common Securities; provided, however, that any permitted successor of the
Company under this Indenture may succeed to the Company's ownership of such
Common Securities. The Company, as owner of the Common Securities, shall, except
in connection with a distribution of Debentures to the holders of Trust


                                       21
<PAGE>

Securities in liquidation of the Trust, the redemption of all of the Trust
Securities or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration, cause the Trust (a) to remain a statutory trust,
(b) to otherwise continue to be classified as a grantor trust for United States
federal income tax purposes, and (c) to cause each holder of Trust Securities to
be treated as owning an undivided beneficial interest in the Debentures.

         Section 3.10. Additional Junior Indebtedness. The Company shall not,
and it shall not cause or permit any Subsidiary of the Company to, incur, issue
or be obligated on any Additional Junior Indebtedness, either directly or
indirectly, by way of guarantee, suretyship or otherwise, other than Additional
Junior Indebtedness (i) that, by its terms, is expressly stated to be either
junior and subordinate or pari passu in all respects to the Debentures, and (ii)
of which the Company has notified (and, if then required under the applicable
guidelines of the regulating entity, has received approval from) the Federal
Reserve, if the Company is a bank holding company, or the OTS, if the Company is
a savings and loan holding company.

                                  ARTICLE IV.
                       SECURITYHOLDERS' LISTS AND REPORTS
                       ----------------------------------
                         BY THE COMPANY AND THE TRUSTEE
                         ------------------------------

         Section 4.1.  Securityholders' Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee:

          (a)  on each regular record date for the  Debentures,  a list, in such
               form as the  Trustee  may  reasonably  require,  of the names and
               addresses of the  Securityholders  of the  Debentures  as of such
               record date; and

          (b)  at such other times as the Trustee may request in writing, within
               30 days after the receipt by the Company of any such  request,  a
               list of  similar  form and  content as of a date not more than 15
               days prior to the time such list is furnished;

except that no such lists need be furnished under this Section 4.1 so long as
the Trustee is in possession thereof by reason of its acting as Debenture
registrar.

         Section 4.2. Preservation and Disclosure of Lists.

          (a)  The Trustee shall preserve, in as current a form as is reasonably
               practicable, all information as to the names and addresses of the
               holders of  Debentures  (1)  contained  in the most  recent  list
               furnished  to it as provided in Section 4.1 or (2) received by it
               in the capacity of Debentures registrar (if so acting) hereunder.
               The Trustee may destroy any list  furnished  to it as provided in
               Section 4.1 upon receipt of a new list so furnished.

          (b)  In case three or more holders of Debentures (hereinafter referred
               to as  "applicants")  apply in writing to the Trustee and furnish
               to the  Trustee  reasonable  proof that each such  applicant  has
               owned a Debenture for a period of at least 6 months preceding the
               date of such  application,  and such application  states that the
               applicants desire to communicate with other holders of Debentures
               with respect to their  rights under this  Indenture or under such
               Debentures  and is  accompanied by a copy of the form of proxy or
               other  communication  which such applicants  propose to transmit,
               then the Trustee  shall within 5 Business  Days after the receipt
               of such application, at its election, either:

               (1)  afford such applicants  access to the information  preserved
                    at the time by the Trustee in accordance with the provisions
                    of subsection (a) of this Section 4.2, or

                                       22
<PAGE>

               (2)  inform  such  applicants  as to the  approximate  number  of
                    holders of Debentures  whose names and  addresses  appear in
                    the  information  preserved  at the time by the  Trustee  in
                    accordance  with the  provisions of  subsection  (a) of this
                    Section  4.2, and as to the  approximate  cost of mailing to
                    such   Securityholders   the   form  of   proxy   or   other
                    communication, if any, specified in such application.

         If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder whose name and address appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2 a copy of the form of proxy or other
communication which is specified in such request with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender, the Trustee shall mail to such applicants and file
with the Securities and Exchange Commission, if permitted or required by
applicable law, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the holders of all Debentures, as the case
may be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If said Commission, as permitted or required
by applicable law, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more of
such objections, said Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.

          (c)  Each and every holder of Debentures, by receiving and holding the
               same,  agrees with the Company and the Trustee  that  neither the
               Company  nor the  Trustee  nor any  paying  agent  shall  be held
               accountable by reason of the  disclosure of any such  information
               as to the names and  addresses  of the holders of  Debentures  in
               accordance  with the provisions of subsection (b) of this Section
               4.2,  regardless  of the source from which such  information  was
               derived,  and that the Trustee shall not be held  accountable  by
               reason of mailing any  material  pursuant to a request made under
               said subsection (b).

                                   ARTICLE V.
                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                   -------------------------------------------
                            UPON AN EVENT OF DEFAULT
                            ------------------------

         Section 5.1. Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default 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  Company  defaults in the  payment of any  interest  upon any
               Debenture,  including any Additional Interest in respect thereof,
               following the  nonpayment of any such interest for twenty or more
               consecutive Distribution Periods; or

          (b)  the  Company  defaults  in the  payment of all or any part of the
               principal of (or premium,  if any, on) any Debentures as and when
               the same shall become due and payable  either at  maturity,  upon
               redemption, by declaration of acceleration or otherwise; or

          (c)  the Company  defaults in the performance of, or breaches,  any of
               its covenants or agreements in this  Indenture or in the terms of
               the  Debentures  established  as  contemplated  in this Indenture
               (other  than  a  covenant   or   agreement  a  default  in  whose
               performance   or  whose  breach  is  elsewhere  in  this  Section


                                       23
<PAGE>

               specifically  dealt  with),  and  continuance  of such default or
               breach for a period of 60 days  after  there has been  given,  by
               registered or certified mail, to the Company by the Trustee or to
               the  Company  and the  Trustee by the  holders of at least 25% in
               aggregate  principal  amount  of the  outstanding  Debentures,  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)  a court of competent  jurisdiction  shall enter a decree or order
               for relief in respect of the Company in an involuntary case under
               any applicable  bankruptcy,  insolvency,  reorganization or other
               similar law now or hereafter in effect, or appointing a receiver,
               liquidator,   assignee,   custodian,  trustee,  sequestrator  (or
               similar  official) of the Company 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

          (e)  the Company shall  commence a voluntary case under any applicable
               bankruptcy,  insolvency,  reorganization 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 the Company or 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; or

          (f)  the Trust shall have  voluntarily  or  involuntarily  liquidated,
               dissolved,  wound-up  its business or  otherwise  terminated  its
               existence  except in connection with (i) the  distribution of the
               Debentures to holders of such Trust  Securities in liquidation of
               their  interests in the Trust,  (ii) the redemption of all of the
               outstanding   Trust   Securities   or  (iii)   certain   mergers,
               consolidations  or  amalgamations,   each  as  permitted  by  the
               Declaration.

         If an Acceleration Event of Default occurs and is continuing with
respect to the Debentures, then, and in each and every such case, unless the
principal of the Debentures shall have already become due and payable, either
the Trustee or the holders of not less than 25% in aggregate principal amount of
the Debentures then outstanding hereunder, by notice in writing to the Company
(and to the Trustee if given by Securityholders), may declare the entire
principal of the Debentures and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default under Section 5.1(b) or (c)
occurs and is continuing with respect to the Debentures, then, and in each and
every such case, unless the principal of the Debentures shall have already
become due and payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Debentures then outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by
Securityholders), may proceed to remedy the default or breach thereunder by such
appropriate judicial proceedings as the Trustee or such holders shall deem most
effectual to remedy the defaulted covenant or enforce the provisions of this
Indenture so breached, either by suit in equity or by action at law, for damages
or otherwise.

         The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Debentures shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, (i)
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all the Debentures and the principal
of and premium, if any, on the Debentures which shall have become due otherwise
than by acceleration (with interest upon such principal and premium, if any, and
Additional Interest) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other amounts due to the Trustee pursuant
to Section 6.6, if any, and (ii) all Events of Default under this Indenture,


                                       24
<PAGE>

other than the non-payment of the principal of or premium, if any, on Debentures
which shall have become due by acceleration, shall have been cured, waived or
otherwise remedied as provided herein -- then and in every such case the holders
of a majority in aggregate principal amount of the Debentures then outstanding,
by written notice to the Company and to the Trustee, may waive all defaults and
rescind and annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon.

         In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Debentures shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Debentures shall continue as though no such proceeding had been taken.

         Section 5.2. Payment of Debentures on Default; Suit Therefor. The
Company covenants that upon the occurrence of an Event of Default pursuant to
Section 5.1(a) or (b) then, upon demand of the Trustee, the Company will pay to
the Trustee, for the benefit of the holders of the Debentures the whole amount
that then shall have become due and payable on all Debentures for principal and
premium, if any, or interest, or both, as the case may be, with Additional
Interest accrued on the Debentures (to the extent that payment of such interest
is enforceable under applicable law and, if the Debentures are held by the Trust
or a trustee of such Trust, without duplication of any other amounts paid by the
Trust or a trustee in respect thereof); and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including a reasonable compensation to the Trustee, its agents, attorneys and
counsel, and any other amounts due to the Trustee under Section 6.6. In case the
Company shall fail forthwith to pay such amounts upon such demand, the Trustee,
in its own name and as trustee of an express trust, shall be entitled and
empowered to institute any actions or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such judgment or
final decree against the Company or any other obligor on such Debentures and
collect in the manner provided by law out of the property of the Company or any
other obligor on such Debentures wherever situated the moneys adjudged or
decreed to be payable.

         In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Bankruptcy Law, or in case a receiver or trustee shall have been appointed for
the property of the Company or such other obligor, or in the case of any other
similar judicial proceedings relative to the Company or other obligor upon the
Debentures, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the Debentures
shall then be due and payable as therein expressed or by declaration of
acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 5.2, shall be
entitled and empowered, by intervention in such proceedings or otherwise,

          (i)  to file and  prove a claim or  claims  for the  whole  amount  of
               principal  and  interest  owing  and  unpaid  in  respect  of the
               Debentures,

          (ii) in case of any judicial proceedings, to file such proofs of claim
               and other papers or documents as may be necessary or advisable in
               order to have the claims of the Trustee  (including any claim for
               reasonable  compensation  to the  Trustee  and  each  predecessor
               Trustee, and their respective agents,  attorneys and counsel, and
               for  reimbursement  of all other amounts due to the Trustee under
               Section 6.6), and of the Securityholders allowed in such judicial
               proceedings  relative to the Company or any other  obligor on the
               Debentures,  or to the  creditors  or  property of the Company or


                                       25
<PAGE>

               such other  obligor,  unless  prohibited  by  applicable  law and
               regulations,  to vote on behalf of the holders of the  Debentures
               in any election of a trustee or a standby trustee in arrangement,
               reorganization,  liquidation  or other  bankruptcy  or insolvency
               proceedings or Person performing  similar functions in comparable
               proceedings,

          (iii) to collect and receive any moneys or other  property  payable or
               deliverable on any such claims, and

          (iv) to  distribute  the same after the  deduction  of its charges and
               expenses.

Any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Securityholders to make such payments to the Trustee,
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
amounts due to the Trustee under Section 6.6.

         Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.

         All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable benefit of the holders of the
Debentures.

         In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Debentures, and it shall not be necessary to make any holders of
the Debentures parties to any such proceedings.

         Section 5.3. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to this Article V shall be applied in the
following order, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the several Debentures in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:

         First:  To the payment of costs and expenses  incurred by, and
reasonable  fees of, the Trustee,  its agents,  attorneys  and counsel, and of
all other amounts due to the Trustee under Section 6.6;

         Second:  To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article XV;

         Third: To the payment of the amounts then due and unpaid upon
Debentures for principal (and premium, if any), and interest on the Debentures,
in respect of which or for the benefit of which money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due on such Debentures (including Additional Interest); and

         Fourth:  The balance, if any, to the Company.

                                       26
<PAGE>

         Section 5.4. Proceedings by Securityholders. No holder of any Debenture
shall have any right to institute any suit, action or proceeding for any remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default with respect to the Debentures and unless the
holders of not less than 25% in aggregate principal amount of the Debentures
then outstanding shall have given the Trustee a written request to institute
such action, suit or proceeding and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred thereby, and the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity shall have failed to
institute any such action, suit or proceeding.

         Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of,
premium, if any, and interest, on such Debenture when due, or to institute suit
for the enforcement of any such payment, shall not be impaired or affected
without the consent of such holder and by accepting a Debenture hereunder it is
expressly understood, intended and covenanted by the taker and holder of every
Debenture with every other such taker and holder and the Trustee, that no one or
more holders of Debentures shall have any right in any manner whatsoever by
virtue or by availing itself of any provision of this Indenture to affect,
disturb or prejudice the rights of the holders of any other Debentures, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of
Debentures. For the protection and enforcement of the provisions of this
Section, each and every Securityholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.

         Section 5.5.  Proceedings by Trustee. In case of an  Event  of  Default
hereunder the Trustee may in its  discretion  proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate  judicial  proceedings
as the  Trustee  shall deem most  effectual  to protect  and enforce any of such
rights,  either  by suit in  equity  or by  action  at law or by  proceeding  in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement  contained  in this  Indenture  or in aid of the exercise of any power
granted in this  Indenture,  or to enforce  any other legal or  equitable  right
vested in the Trustee by this Indenture or by law.

         Section 5.6.  Remedies Cumulative and Continuing; Delay or Omission Not
a Waiver. Except as otherwise  provided in Section  2.6, all powers and remedies
given by this Article V to the Trustee or to the  Securityholders  shall, to the
extent  permitted by law, be deemed  cumulative  and not  exclusive of any other
powers and remedies  available to the Trustee or the holders of the  Debentures,
by judicial  proceedings or otherwise,  to enforce the performance or observance
of the  covenants  and  agreements  contained  in this  Indenture  or  otherwise
established  with  respect to the  Debentures,  and no delay or  omission of the
Trustee or of any holder of any of the Debentures to exercise any right,  remedy
or power  accruing  upon any  Event  of  Default  occurring  and  continuing  as
aforesaid shall impair any such right, remedy or power, or shall be construed to
be a waiver of any such default or an acquiescence  therein; and, subject to the
provisions of Section 5.4,  every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed  expedient,  by the Trustee (in accordance  with
its duties under Section 6.1) or by the Securityholders.

         Section 5.7. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.  The holders of a majority in aggregate principal
amount of the Debentures affected (voting as one class) at the time outstanding
shall have the right to direct the time, method, and place of conducting any
proceeding for any remedy  available to the Trustee,  or exercising any trust or
power conferred on the Trustee with respect to such Debentures; provided,
however, that (subject to the  provisions  of Section 6.1) the Trustee shall
have the right to decline to follow any such  direction  if the Trustee shall
determine that the action so directed  would be unjustly prejudicial to the
holders not taking part in such direction or if the Trustee being advised by


                                       27
<PAGE>

counsel determines that the action or proceeding so directed may not lawfully be
taken or if a Responsible Officer of the Trustee shall  determine that the
action or proceedings so directed would involve the Trustee in personal
liability.

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

         Section 5.8.  Notice of Defaults. The Trustee shall, within 90 days
after the actual knowledge by a Responsible Officer of the Trustee of the
occurrence of a default with respect to the Debentures, mail to all
Securityholders, as the names and addresses of such holders appear upon the
Debenture Register,  notice of all defaults with respect to the Debentures known
to the Trustee, unless such defaults shall have been cured before the giving of
such notice (the term "defaults" for the purpose of this Section 5.8 being
hereby  defined to be the events  specified in clauses (a), (b), (c), (d), (e)
and (f) of Section 5.1, not including  periods of grace, if any, provided for
therein);  provided,  however, that, except in the case of default in the
payment of the principal of, premium, if any, or interest on any of the
Debentures,  the Trustee shall be protected in withholding  such notice if and
so long as a Responsible  Officer of the Trustee in good faith determines that
the withholding of such notice is in the interests of the Securityholders.

         Section 5.9. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any  Debenture by his  acceptance  thereof shall be
deemed to have agreed,  that any court may in its discretion  require, in any
suit for the enforcement of any right or remedy under this Indenture,  or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party  litigant; provided, however, that the provisions of
this Section 5.9 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Securityholder, or group of Securityholders, holding in
the aggregate more than 10% in principal amount of the Debentures outstanding,
or to any suit instituted by any Securityholder for the enforcement of the
payment of the principal of (or premium, if any) or interest on any Debenture
against the Company on or after the same shall have become due and payable.

                                       28
<PAGE>

                                  ARTICLE VI.
                             CONCERNING THE TRUSTEE
                             ----------------------

         Section 6.1. Duties and Responsibilities  of Trustee. With respect to
the holders of Debentures issued hereunder, the Trustee, prior to the occurrence
of an Event of  Default  with  respect  to the  Debentures  and after the curing
or waiving of all Events of Default which may have occurred, with respect to the
Debentures,  undertakes  to  perform  such  duties  and only such  duties as are
specifically set forth in this Indenture, and no implied covenants shall be read
into this  Indenture  against  the  Trustee.  In case an Event of  Default  with
respect to the Debentures has occurred (which has not been cured or waived), the
Trustee  shall  exercise  such of the  rights  and  powers  vested in it by this
Indenture,  and use the same  degree of care and skill in their  exercise,  as a
prudent man would exercise or use under the  circumstances in the conduct of his
own affairs.

         No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

          (a)  prior to the  occurrence  of an Event of Default  with respect to
               Debentures  and after  the  curing or  waiving  of all  Events of
               Default which may have occurred

               (1)  the duties and  obligations  of the Trustee  with respect to
                    Debentures  shall  be  determined   solely  by  the  express
                    provisions of this  Indenture,  and the Trustee shall not be
                    liable  except  for  the  performance  of  such  duties  and
                    obligations   with   respect  to  the   Debentures   as  are
                    specifically  set forth in this  Indenture,  and no  implied
                    covenants or  obligations  shall be read into this Indenture
                    against the Trustee, and

               (2)  in the absence of bad faith on the part of the Trustee,  the
                    Trustee  may  conclusively  rely,  as to  the  truth  of the
                    statements  and the  correctness  of the opinions  expressed
                    therein,  upon any certificates or opinions furnished to the
                    Trustee  and   conforming  to  the   requirements   of  this
                    Indenture;  but,  in the  case of any such  certificates  or
                    opinions  which by any  provision  hereof  are  specifically
                    required to be furnished to the Trustee,  the Trustee  shall
                    be under a duty to examine the same to determine  whether or
                    not they conform to the requirements of this Indenture;

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

          (c)  the 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  Securityholders  pursuant to Section 5.7,
               relating  to  the  time,  method  and  place  of  conducting  any
               proceeding for any remedy available to the Trustee, or exercising
               any  trust  or  power  conferred  upon the  Trustee,  under  this
               Indenture.

         None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is ground for believing that the repayment of
such funds or liability is not assured to it under the terms of this Indenture
or indemnity satisfactory to the Trustee against such risk is not reasonably
assured to it.

         Section 6.2.  Reliance on Documents, Opinions, etc. Except as otherwise
provided in Section 6.1:

                                       29
<PAGE>

          (a)  the Trustee may conclusively rely and shall be fully protected in
               acting  or   refraining   from   acting   upon  any   resolution,
               certificate,  statement,  instrument,  opinion,  report,  notice,
               request,  consent, order, bond, note, debenture or other paper or
               document  believed by it to be genuine and to have been signed or
               presented by the proper party or parties;

          (b)  any request,  direction, order or demand of the Company mentioned
               herein   shall  be   sufficiently   evidenced   by  an  Officers'
               Certificate  (unless other evidence in respect  thereof be herein
               specifically  prescribed);   and  any  Board  Resolution  may  be
               evidenced  to the  Trustee  by a copy  thereof  certified  by the
               Secretary or an Assistant Secretary of the Company;

          (c)  the Trustee may consult  with  counsel of its  selection  and any
               advice  or  Opinion  of  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
               accordance with such advice or Opinion of Counsel;

          (d)  the Trustee  shall be under no  obligation to exercise any of the
               rights or powers  vested in it by this  Indenture at the request,
               order or direction of any of the Securityholders, pursuant to the
               provisions of this Indenture,  unless such Securityholders  shall
               have  offered to the Trustee  reasonable  security  or  indemnity
               against the costs, expenses and liabilities which may be incurred
               therein or thereby;

          (e)  the Trustee  shall not be liable for any action  taken or omitted
               by it in good faith and believed by it to be authorized or within
               the  discretion  or rights or  powers  conferred  upon it by this
               Indenture;  nothing contained herein shall, however,  relieve the
               Trustee of the  obligation,  upon the  occurrence  of an Event of
               Default with respect to the  Debentures  (that has not been cured
               or waived) to exercise  with  respect to  Debentures  such of the
               rights and powers vested in it by this Indenture,  and to use the
               same degree of care and skill in their exercise, as a prudent man
               would exercise or use under the  circumstances  in the conduct of
               his own affairs;

          (f)  the 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,  coupon  or  other  paper or
               document,  unless requested in writing to do so by the holders of
               not less than a majority  in  aggregate  principal  amount of the
               outstanding Debentures affected thereby; provided,  however, that
               if the  payment  within a  reasonable  time to the Trustee of the
               costs, expenses or liabilities likely to be incurred by it in the
               making of such  investigation  is, in the opinion of the Trustee,
               not reasonably assured to the Trustee by the security afforded to
               it by the  terms  of this  Indenture,  the  Trustee  may  require
               reasonable  indemnity  against  such  expense or  liability  as a
               condition to so proceeding;

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

          (h)  with the exceptions of defaults under Sections 5.1(a) or (b), the
               Trustee  shall not be charged  with  knowledge  of any Default or
               Event of Default with respect to the Debentures  unless a written
               notice of such Default or Event of Default  shall have been given
               to  the  Trustee  by the  Company  or any  other  obligor  on the
               Debentures or by any holder of the Debentures.

          Section 6.3. No Responsibility for Recitals, etc. The recitals
contained herein and in the Debentures (except in the certificate of
authentication of the Trustee or the  Authenticating  Agent) shall be taken as
the statements of the Company, and the Trustee and the Authenticating Agent
assume no responsibility for the correctness of the same. The Trustee and the

                                       30
<PAGE>

Authenticating Agent make no  representations  as to the validity or sufficiency
of this Indenture or of the Debentures.  The Trustee and the Authenticating
Agent shall not be accountable for the use or application by the Company of
any  Debentures  or  the  proceeds  of  any  Debentures  authenticated  and
delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture.

         Section 6.4. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debentures. The Trustee or any Authenticating Agent
or any paying agent or any transfer agent or any Debenture registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
with the same rights it would have if it were not Trustee,  Authenticating
Agent, paying agent, transfer agent or Debenture registrar.

         Section 6.5.  Moneys to be Held in Trust. Subject to the provisions  of
Section  12.4,  all moneys  received by the Trustee or any paying  agent  shall,
until used or applied as herein  provided,  be held in trust for the purpose for
which they were received,  but need not be segregated from other funds except to
the extent  required by law.  The Trustee and any paying agent shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing  with the Company.  So long as no Event of Default  shall have
occurred and be  continuing,  all  interest  allowed on any such moneys shall be
paid from  time to time upon the  written  order of the  Company,  signed by the
Chairman of the Board of Directors,  the Chief Executive Officer, the President,
a Managing Director,  a Vice President,  the Treasurer or an Assistant Treasurer
of the Company.

         Section 6.6.  Compensation and Expenses of Trustee. The Company
covenants and agrees to pay or reimburse  the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the  provisions  of  this  Indenture  (including  the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ)  except any such expense,  disbursement
or advance as may arise from its negligence or willful misconduct.  For purposes
of  clarification,  this  Section  6.6 does not  contemplate  the payment by the
Company  of  acceptance  or  annual  administration  fees  owing to the  Trustee
pursuant to the services to be provided by the Trustee  under this  Indenture or
the fees and expenses of the Trustee's counsel in connection with the closing of
the transactions  contemplated by this Indenture.  The Company also covenants to
indemnify  each of the Trustee or any  predecessor  Trustee  (and its  officers,
agents,  directors and employees) for, and to hold it harmless against,  any and
all loss, damage, claim,  liability or expense including taxes (other than taxes
based on the  income of the  Trustee)  incurred  without  negligence  or willful
misconduct on the part of the Trustee and arising out of or in  connection  with
the acceptance or administration of this trust, including the costs and expenses
of defending  itself  against any claim of  liability.  The  obligations  of the
Company  under this Section 6.6 to  compensate  and indemnify the Trustee and to
pay or reimburse  the Trustee for  expenses,  disbursements  and advances  shall
constitute additional indebtedness hereunder. Such additional indebtedness shall
be secured by a lien prior to that of the Debentures upon all property and funds
held or  collected  by the Trustee as such,  except  funds held in trust for the
benefit of the holders of particular Debentures.

         Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d), (e) or (f), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.

         The provisions of this Section shall survive the resignation or removal
of the Trustee and the defeasance or other termination of this Indenture.

         Notwithstanding anything in this Indenture or any Debenture to the
contrary, the Trustee shall have no obligation whatsoever to advance funds to
pay any principal of or interest on or other amounts with respect to the
Debentures or otherwise advance funds to or on behalf of the Company.

                                       31
<PAGE>

         Section 6.7.  Officers' Certificate as Evidence.  Except  as  otherwise
provided  in  Sections  6.1  and  6.2,  whenever  in the  administration  of the
provisions  of this  Indenture  the Trustee shall deem it necessary or desirable
that a matter be proved or  established  prior to taking or omitting  any action
hereunder,  such matter  (unless  other  evidence  in respect  thereof be herein
specifically prescribed) may, in the absence of negligence or willful misconduct
on the part of the Trustee,  be deemed to be conclusively proved and established
by an Officers' Certificate  delivered to the Trustee, and such certificate,  in
the absence of  negligence  or willful  misconduct  on the part of the  Trustee,
shall be full warrant to the Trustee for any action taken or omitted by it under
the provisions of this Indenture upon the faith thereof.

         Section 6.8. Eligibility of Trustee. The Trustee hereunder shall at all
times be a corporation organized and doing business under the laws of the United
States of  America  or any state or  territory  thereof  or of the  District  of
Columbia or a corporation or other Person authorized under such laws to exercise
corporate trust powers,  having (or whose  obligations  under this Indenture are
guaranteed by an affiliate 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,  territorial,  or District  of Columbia  authority.  If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid  supervising or examining  authority,  then
for the purposes of this  Section 6.8 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 records of condition so published.

         The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.

         In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.8, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.9.

         If the Trustee has or shall acquire any "conflicting interest" within
the meaning of ss. 310(b) of the Trust Indenture Act of 1939, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
described by this Indenture.

         Section 6.9. Resignation or Removal of Trustee

          (a)  The Trustee, or any trustee or trustees hereafter appointed,  may
               at any time resign by giving written  notice of such  resignation
               to the Company and by mailing  notice  thereof,  at the Company's
               expense,  to the holders of the Debentures at their  addresses as
               they shall appear on the Debenture Register.  Upon receiving such
               notice of  resignation,  the  Company  shall  promptly  appoint a
               successor   trustee  or  trustees  by  written   instrument,   in
               duplicate,  executed by order of its Board of Directors, one copy
               of which instrument  shall be delivered to the resigning  Trustee
               and one copy to the successor  Trustee.  If no successor  Trustee
               shall have been so appointed and have accepted appointment within
               30 days after the  mailing of such notice of  resignation  to the
               affected Securityholders,  the resigning Trustee may petition any
               court  of  competent   jurisdiction  for  the  appointment  of  a
               successor Trustee, or any Securityholder who has been a bona fide
               holder of a Debenture or Debentures  for at least six months may,
               subject to the  provisions  of Section  5.9, on behalf of himself
               and all others  similarly  situated,  petition any such court for
               the appointment of a successor Trustee. Such court may thereupon,
               after such notice,  if any, as it may deem proper and  prescribe,
               appoint a successor Trustee.

          (b)  In case at any time any of the following shall occur --

               (1)  the  Trustee  shall fail to comply  with the  provisions  of
                    Section 6.8 after written request therefor by the Company or
                    by any  Securityholder  who has been a bona fide holder of a
                    Debenture or Debentures for at least 6 months, or

                                       32
<PAGE>

               (2)  the Trustee  shall cease to be eligible in  accordance  with
                    the provisions of Section 6.8 and shall fail to resign after
                    written  request  therefor  by the  Company  or by any  such
                    Securityholder, or

               (3)  the Trustee  shall become  incapable of acting,  or shall be
                    adjudged  as  bankrupt  or  insolvent,  or a receiver of the
                    Trustee or of its property shall be appointed, or any public
                    officer  shall take  charge or control of the  Trustee or of
                    its  property or affairs for the purpose of  rehabilitation,
                    conservation or liquidation,

                  then, in any such case, the Company may remove the Trustee and
                  appoint a successor Trustee by written instrument, in
                  duplicate, executed by order of the Board of Directors, one
                  copy of which instrument shall be delivered to the Trustee so
                  removed and one copy to the successor Trustee, or, subject to
                  the provisions of Section 5.9, any Securityholder who has been
                  a bona fide holder of a Debenture or Debentures for at least 6
                  months may, on behalf of himself and all others similarly
                  situated, petition any court of competent jurisdiction for the
                  removal of the Trustee and the appointment of a successor
                  Trustee. Such court may thereupon, after such notice, if any,
                  as it may deem proper and prescribe, remove the Trustee and
                  appoint successor Trustee.

          (c)  Upon prior  written  notice to the Company and the  Trustee,  the
               holders  of a  majority  in  aggregate  principal  amount  of the
               Debentures  at the time  outstanding  may at any time  remove the
               Trustee and nominate a successor  Trustee,  which shall be deemed
               appointed as successor  Trustee  unless  within 10 Business  Days
               after such nomination the Company objects thereto, in which case,
               or in the  case  of a  failure  by such  holders  to  nominate  a
               successor Trustee,  the Trustee so removed or any Securityholder,
               upon the terms and  conditions and otherwise as in subsection (a)
               of this Section 6.9 provided, may petition any court of competent
               jurisdiction for an appointment of a successor.

          (d)  Any  resignation  or removal of the Trustee and  appointment of a
               successor  Trustee  pursuant  to any of the  provisions  of  this
               Section shall become  effective upon acceptance of appointment by
               the successor Trustee as provided in Section 6.10.

         Section 6.10.  Acceptance by Successor  Trustee. Any successor  Trustee
appointed as provided in Section 6.9 shall execute,  acknowledge  and deliver to
the  Company  and  to its  predecessor  Trustee  an  instrument  accepting  such
appointment hereunder,  and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor  Trustee,  without any further
act, deed or conveyance, shall become vested with all the rights, powers, duties
and  obligations  with respect to the Debentures of its  predecessor  hereunder,
with like effect as if originally named as Trustee herein; but, nevertheless, on
the written  request of the  Company or of the  successor  Trustee,  the Trustee
ceasing to act shall,  upon  payment of any amounts  then due it pursuant to the
provisions  of Section 6.6,  execute and deliver an instrument  transferring  to
such  successor  Trustee  all the rights and powers of the Trustee so ceasing to
act and shall duly assign,  transfer and deliver to such  successor  Trustee all
property and money held by such retiring Trustee thereunder. Upon request of any
such  successor  Trustee,  the Company shall execute any and all  instruments in
writing for more fully and certainly vesting in and confirming to such successor
Trustee  all  such  rights  and  powers.  Any  Trustee  ceasing  to  act  shall,
nevertheless, retain a lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the  provisions of Section
6.6.

         If a successor Trustee is appointed, the Company, the retiring Trustee
and the successor Trustee shall execute and deliver an indenture supplemental
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debentures as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee,
and shall add to or change any of the provisions of this Indenture as shall be


                                       33
<PAGE>

necessary to provide for or facilitate the administration of the Trust hereunder
by more than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be Trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee.

         No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 6.8.

         In no event shall a retiring Trustee be liable for the acts or
omissions of any successor Trustee hereunder.

         Upon acceptance of appointment by a successor Trustee as provided in
this Section 6.10, the Company shall mail notice of the succession of such
Trustee hereunder to the holders of Debentures at their addresses as they shall
appear on the Debenture Register. If the Company fails to mail such notice
within 10 Business Days after the acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of the Company.

         Section 6.11.  Succession by Merger, etc. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided such
corporation shall be otherwise eligible and qualified under this Article.

         In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such
Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee may authenticate
such Debentures either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debentures or in this Indenture provided
that the certificate of the Trustee shall have; provided, however, that the
right to adopt the certificate of authentication of any predecessor Trustee or
authenticate Debentures in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.

         Section  6.12.   Authenticating  Agents. There   may  be  one  or  more
Authenticating  Agents  appointed by the Trustee upon the request of the Company
with  power  to  act  on  its  behalf  and  subject  to  its  direction  in  the
authentication  and delivery of Debentures  issued upon exchange or registration
of  transfer  thereof as fully to all  intents  and  purposes as though any such
Authenticating  Agent had been expressly  authorized to authenticate and deliver
Debentures;  provided,  however, that the Trustee shall have no liability to the
Company for any acts or  omissions of the  Authenticating  Agent with respect to
the authentication  and delivery of Debentures.  Any such  Authenticating  Agent
shall at all times be a corporation  organized and doing business under the laws
of the United States or of any state or territory  thereof or of the District of
Columbia  authorized under such laws to act as  Authenticating  Agent,  having a
combined  capital and surplus of at least  $50,000,000.00  and being  subject to
supervision  or  examination  by  federal,  state,  territorial  or  District of
Columbia authority.  If such corporation publishes reports of condition at least
annually  pursuant to law or the  requirements of such  authority,  then for the
purposes  of  this  Section  6.12  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.  If at any  time  an
Authenticating  Agent  shall  cease  to  be  eligible  in  accordance  with  the
provisions of this Section,  it shall resign  immediately in the manner and with
the effect herein specified in this Section.

                                       34
<PAGE>

         Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible under this Section 6.12 without the execution or filing of
any paper or any further act on the part of the parties hereto or such
Authenticating Agent.

         Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any Authenticating Agent with respect to the
Debentures by giving written notice of termination to such Authenticating Agent
and to the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section 6.12, the Trustee may, and upon the request of the
Company shall, promptly appoint a successor Authenticating Agent eligible under
this Section 6.12, shall give written notice of such appointment to the Company
and shall mail notice of such appointment to all holders of Debentures as the
names and addresses of such holders appear on the Debenture Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities with
respect to the Debentures of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein.

         The Company agrees to pay to any Authenticating Agent from time to time
reasonable compensation for its services. Any Authenticating Agent shall have no
responsibility or liability for any action taken by it as such in accordance
with the directions of the Trustee.

                                  ARTICLE VII.
                         CONCERNING THE SECURITYHOLDERS
                         ------------------------------

         Section 7.1.  Action by Securityholders. Whenever in this Indenture it
is provided that the holders of a specified percentage  in  aggregate  principal
amount of the Debentures may take any action (including the making of any demand
or  request,  the giving of any  notice,  consent or waiver or the taking of any
other action) the fact that at the time of taking any such action the holders of
such  specified  percentage  have  joined  therein may be  evidenced  (a) by any
instrument  or any number of  instruments  of  similar  tenor  executed  by such
Securityholders  in person or by agent or proxy appointed in writing,  or (b) by
the record of such holders of Debentures  voting in favor thereof at any meeting
of such  Securityholders  duly called and held in accordance with the provisions
of Article VIII, or (c) by a combination of such  instrument or instruments  and
any such  record of such a meeting of such  Securityholders  or (d) by any other
method the Trustee deems satisfactory.

         If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action or
revocation of the same, the Company may, at its option, as evidenced by an
Officers' Certificate, fix in advance a record date for such Debentures for the
determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same may be given before or after
the record date, but only the Securityholders of record at the close of business
on the record date shall be deemed to be Securityholders for the purposes of
determining whether Securityholders of the requisite proportion of outstanding
Debentures have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation


                                       35
<PAGE>

of the same, and for that purpose the outstanding Debentures shall be computed
as of the record date; provided, however, that no such authorization, agreement
or consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than 6 months after the record date.

Section 7.2. Proof of Execution by Securityholders. Subject to the provisions of
Section 6.1, 6.2 and 8.5, proof of the execution of any instrument by a
Securityholder or his agent or proxy shall be sufficient if made in accordance
with such reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee. The ownership of
Debentures shall be proved by the Debenture Register or by a certificate of the
Debenture registrar. The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.

         The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.6.

         Section 7.3. Who Are Deemed Absolute Owners. Prior to due presentment
for registration of transfer of any Debenture, the  Company,  the  Trustee,  any
Authenticating  Agent,  any paying agent,  any transfer  agent and any Debenture
registrar may deem the Person in whose name such  Debenture  shall be registered
upon the Debenture  Register to be, and may treat him as, the absolute  owner of
such Debenture  (whether or not such Debenture shall be overdue) for the purpose
of receiving payment of or on account of the principal of, premium,  if any, and
interest on such Debenture and for all other  purposes;  and neither the Company
nor the  Trustee  nor any  Authenticating  Agent  nor any  paying  agent nor any
transfer  agent nor any Debenture  registrar  shall be affected by any notice to
the contrary. All such payments so made to any holder for the time being or upon
his  order  shall  be  valid,  and,  to the  extent  of the sum or sums so paid,
effectual to satisfy and discharge  the  liability  for moneys  payable upon any
such Debenture.

         Section  7.4.  Debentures Owned by Company Deemed Not  Outstanding.  In
determining  whether the holders of the requisite  aggregate principal amount of
Debentures  have  concurred  in any  direction,  consent  or waiver  under  this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or by any Person directly or indirectly  controlling or controlled by
or under direct or indirect common control with the Company or any other obligor
on the Debentures  shall be disregarded and deemed not to be outstanding for the
purpose of any such determination;  provided,  however, that for the purposes of
determining  whether  the  Trustee  shall be  protected  in  relying on any such
direction, consent or waiver, only Debentures which a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded. Debentures so owned
which have been  pledged in good faith may be  regarded as  outstanding  for the
purposes of this Section 7.4 if the pledgee shall establish to the  satisfaction
of the Trustee the pledgee's  right to vote such Debentures and that the pledgee
is not the Company or any such other  obligor or Person  directly or  indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other  obligor.  In the case of a dispute as to such  right,
any  decision  by the  Trustee  taken upon the  advice of counsel  shall be full
protection to the Trustee.

         Section 7.5.  Revocation of Consents; Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder (in cases where no record date has been
set pursuant to Section 7.1) or any holder as of an applicable record date
(in cases where a record date has been set pursuant to Section 7.1) of a
Debenture (or any Debenture issued in whole or in part in exchange or
substitution therefor) the serial number of which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee at the Principal Office of the
Trustee and upon  proof of holding as provided in Section 7.2, revoke such


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<PAGE>

action so far as concerns such Debenture (or so far as concerns the principal
amount represented by any exchanged or substituted  Debenture). Except as
aforesaid any such action taken by the holder of any Debenture shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Debenture, and of any Debenture issued in  exchange or substitution
therefor or on registration  of transfer thereof, irrespective  of whether or
not any notation in regard thereto is made upon such Debenture or any Debenture
issued  in  exchange  or  substitution therefor.

                                 ARTICLE VIII.
                            SECURITYHOLDERS' MEETINGS
                            -------------------------

         Section 8.1.  Purposes of Meetings. A meeting of Securityholders may be
called  at any time and from time to time  pursuant  to the  provisions  of this
Article VIII for any of the following purposes:

          (a)  to give any notice to the Company or to the  Trustee,  or to give
               any  directions  to the Trustee,  or to consent to the waiving of
               any default hereunder and its consequences,  or to take any other
               action authorized to be taken by Securityholders  pursuant to any
               of the provisions of Article V;

          (b)  to remove the Trustee and nominate a successor  trustee  pursuant
               to the provisions of Article VI;

          (c)  to  consent  to  the  execution  of an  indenture  or  indentures
               supplemental hereto pursuant to the provisions of Section 9.2; or

          (d)  to take any other action  authorized  to be taken by or on behalf
               of the holders of any  specified  aggregate  principal  amount of
               such  Debentures  under any other  provision of this Indenture or
               under applicable law.

         Section 8.2. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Securityholders to take any action specified in Section 8.1,
to be held at such time and at such place as the Trustee shall determine. Notice
of every meeting of the Securityholders, setting forth the time and the place of
such  meeting  and in  general  terms the  action  proposed  to be taken at such
meeting, shall be mailed to holders of Debentures affected at their addresses as
they shall appear on the Debentures Register and, if the Company is not a holder
of Debentures,  to the Company. Such notice shall be mailed not less than 20 nor
more than 180 days prior to the date fixed for the meeting.

         Section 8.3. Call of Meetings by Company or Securityholders. In case
at any time the Company pursuant to a Board Resolution, or the holders of at
least 10% in aggregate principal amount of the Debentures, as the case may be,
then outstanding, shall have requested  the   Trustee  to  call  a  meeting  of
Securityholders,  by written  request  setting  forth in  reasonable  detail the
action  proposed  to be taken at the  meeting,  and the  Trustee  shall not have
mailed the notice of such meeting  within 20 days after receipt of such request,
then the Company or such  Securityholders  may  determine the time and the place
for such  meeting  and may call such  meeting to take any action  authorized  in
Section 8.1, by mailing notice thereof as provided in Section 8.2.

         Section 8.4.  Qualifications for Voting. To be entitled to vote at any
meeting  of  Securityholders  a  Person  shall  (a) be a  holder  of one or more


                                       37
<PAGE>

Debentures  with  respect  to which the  meeting  is being  held or (b) a Person
appointed by an  instrument  in writing as proxy by a holder of one or more such
Debentures.  The only Persons who shall be entitled to be present or to speak at
any meeting of  Securityholders  shall be the  Persons  entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.

         Section 8.5.  Regulations. Notwithstanding any other provisions of this
Indenture,  the  Trustee  may make such  reasonable  regulations  as it may deem
advisable for any meeting of Securityholders,  in regard to proof of the holding
of  Debentures  and  of  the  appointment  of  proxies,  and  in  regard  to the
appointment and duties of inspectors of votes, the submission and examination of
proxies,  certificates  and other  evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.

         The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.3, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.

         Subject to the provisions of Section 7.4, at any meeting each holder of
Debentures with respect to which such meeting is being held or proxy therefor
shall be entitled to one vote for each $1,000.00 principal amount of Debentures
held or represented by him; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Debenture challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Debentures held
by him or instruments in writing as aforesaid duly designating him as the Person
to vote on behalf of other Securityholders. Any meeting of Securityholders duly
called pursuant to the provisions of Section 8.2 or 8.3 may be adjourned from
time to time by a majority of those present, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.

         Section 8.6. Voting. The vote upon any resolution submitted to any
meeting of holders of Debentures with respect to which such meeting is being
held shall be by written ballots on which shall be subscribed the signatures of
such holders or of their representatives by proxy and the serial number or
numbers of the Debentures held or represented by them. The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in triplicate of all
votes cast at the  meeting.  A record in duplicate  of the  proceedings  of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and  affidavits by one or more Persons
having  knowledge of the facts setting forth a copy of the notice of the meeting
and showing  that said notice was mailed as provided in Section  8.2. The record
shall show the serial  numbers of the  Debentures  voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent  chairman and secretary of the meeting and one of the duplicates shall
be  delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.

         Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

         Section 8.7.  Quorum; Actions. The Persons entitled to vote a majority
in principal amount of the Debentures then outstanding shall constitute a quorum
for a meeting of Securityholders; provided, however, that if any action is to be
taken at such  meeting  with  respect to a  consent,  waiver,  request,  demand,
notice,  authorization,  direction  or other  action  which  may be given by the
holders  of not less than a  specified  percentage  in  principal  amount of the
Debentures then outstanding,  the Persons holding or representing such specified
percentage  in  principal   amount  of  the  Debentures  then  outstanding  will
constitute  a quorum.  In the absence of a quorum  within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request of
Securityholders,  be  dissolved.  In any other case the meeting may be adjourned
for a period of not less than 10 days as determined by the permanent chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum


                                       38
<PAGE>

at any such adjourned  meeting,  such adjourned meeting may be further adjourned
for a period of not less than 10 days as determined by the permanent chairman of
the meeting prior to the  adjournment of such adjourned  meeting.  Notice of the
reconvening of any adjourned  meeting shall be given as provided in Section 8.2,
except  that such  notice  need be given only once not less than 5 days prior to
the date on which the  meeting  is  scheduled  to be  reconvened.  Notice of the
reconvening of an adjourned  meeting shall state  expressly the  percentage,  as
provided above, of the principal amount of the Debentures then outstanding which
shall constitute a quorum.

         Except as limited by the provisos in the first paragraph of Section
9.2, any resolution presented to a meeting or adjourned meeting duly reconvened
at which a quorum is present as aforesaid may be adopted by the affirmative vote
of the holders of a majority in principal amount of the Debentures then
outstanding; provided, however, that, except as limited by the provisos in the
first paragraph of Section 9.2, any resolution with respect to any consent,
waiver, request, demand, notice, authorization, direction or other action which
this Indenture expressly provides may be given by the holders of not less than a
specified percentage in principal amount of the Debentures then outstanding may
be adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid only by the affirmative vote of the holders of a
not less than such specified percentage in principal amount of the Debentures
then outstanding.

         Any resolution passed or decision taken at any meeting of holders of
Debentures duly held in accordance with this Section shall be binding on all the
Securityholders, whether or not present or represented at the meeting.

                                  ARTICLE IX.
                             SUPPLEMENTAL INDENTURES
                             -----------------------

         Section 9.1.  Supplemental Indentures without Consent of
Securityholders. The Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto,  without the consent of the Securityholders, for
one or more of the following purposes:

          (a)  to evidence the succession of another  Person to the Company,  or
               successive  successions,  and  the  assumption  by the  successor
               Person  of  the  covenants,  agreements  and  obligations  of the
               Company, pursuant to Article XI hereof;

          (b)  to add to the  covenants of the Company  such further  covenants,
               restrictions  or conditions  for the protection of the holders of
               Debentures as the Board of Directors shall consider to be for the
               protection  of the  holders of such  Debentures,  and to make the
               occurrence,  or the occurrence and  continuance,  of a default in
               any of such  additional  covenants,  restrictions or conditions a
               default or an Event of Default  permitting the enforcement of all
               or any of the  several  remedies  provided in this  Indenture  as
               herein set forth; provided,  however, that in respect of any such
               additional  covenant  restriction or condition such  supplemental
               indenture  may  provide  for a  particular  period of grace after
               default  (which period may be shorter or longer than that allowed
               in the case of other  defaults)  or may provide for an  immediate
               enforcement upon such default or may limit the remedies available
               to the Trustee upon such default;

          (c)  to cure any ambiguity or to correct or  supplement  any provision
               contained  herein or in any  supplemental  indenture which may be
               defective  or  inconsistent  with any other  provision  contained
               herein or in any  supplemental  indenture,  or to make such other
               provisions  in regard to matters or questions  arising under this
               Indenture;  provided  that any such action  shall not  materially
               adversely affect the interests of the holders of the Debentures;

                                       39
<PAGE>

          (d)  to add to,  delete  from,  or  revise  the  terms of  Debentures,
               including,   without  limitation,   any  terms  relating  to  the
               issuance,  exchange,  registration  or  transfer  of  Debentures,
               including to provide for  transfer  procedures  and  restrictions
               substantially   similar  to  those   applicable  to  the  Capital
               Securities  as required by Section 2.5 (for  purposes of assuring
               that  no   registration  of  Debentures  is  required  under  the
               Securities Act);  provided,  however,  that any such action shall
               not  adversely  affect  the  interests  of  the  holders  of  the
               Debentures then outstanding (it being understood, for purposes of
               this   proviso,   that   transfer   restrictions   on  Debentures
               substantially  similar to those that were  applicable  to Capital
               Securities shall not be deemed to materially adversely affect the
               holders of the Debentures);

          (e)  to  evidence  and  provide  for  the  acceptance  of  appointment
               hereunder by a successor  Trustee with respect to the  Debentures
               and to add to or change any of the  provisions of this  Indenture
               as  shall  be  necessary  to  provide  for  or   facilitate   the
               administration of the trusts hereunder by more than one Trustee;

          (f)  to make any change  (other  than as  elsewhere  provided  in this
               paragraph)  that  does not  adversely  affect  the  rights of any
               Securityholder in any material respect; or

          (g)  to provide for the issuance of and  establish  the form and terms
               and  conditions of the  Debentures,  to establish the form of any
               certifications  required to be furnished pursuant to the terms of
               this Indenture or the Debentures,  or to add to the rights of the
               holders of Debentures.

         The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.

         Any supplemental indenture authorized by the provisions of this Section
9.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 9.2.

         Section 9.2. Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Section 7.1) of the holders of not
less than a majority in aggregate principal amount of the Debentures at the time
outstanding  affected by such supplemental  indenture  (voting as a class),  the
Company, when authorized by a Board Resolution, and the Trustee may from time to
time and at any time enter into an indenture or indentures  supplemental  hereto
for the  purpose  of adding  any  provisions  to or  changing  in any  manner or
eliminating  any of the  provisions  of this  Indenture  or of any  supplemental
indenture  or of  modifying  in any  manner  the  rights of the  holders  of the
Debentures; provided, however, that no such supplemental indenture shall without
the consent of the  holders of each  Debenture  then  outstanding  and  affected
thereby (i) change the fixed maturity of any Debenture,  or reduce the principal
amount thereof or any premium thereon,  or reduce the rate or extend the time of
payment of interest thereon,  or reduce any amount payable on redemption thereof
or make the principal  thereof or any interest or premium thereon payable in any
coin or currency other than that provided in the Debentures, or impair or affect
the right of any  Securityholder to institute suit for payment thereof or impair
the right of repayment,  if any, at the option of the holder, or (ii) reduce the
aforesaid  percentage of Debentures the holders of which are required to consent
to any such  supplemental  indenture;  provided  further,  however,  that if the
Debentures  are held by a trust or a trustee of such  trust,  such  supplemental
indenture  shall not be effective until the holders of a majority in Liquidation
Amount of Trust Securities shall have consented to such supplemental  indenture;
provided  further,  however,  that if the consent of the  Securityholder of each
outstanding  Debenture is required,  such  supplemental  indenture  shall not be
effective until each holder of the Trust Securities shall have consented to such
supplemental indenture.

                                       40
<PAGE>

         Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

         Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

         It shall not be necessary for the consent of the Securityholders under
this Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

         Section 9.3. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture pursuant to the provisions  of this  Article IX, this
Indenture  shall be and be deemed  to be  modified  and  amended  in  accordance
therewith and the respective rights, limitations of rights, obligations,  duties
and immunities under this Indenture of the Trustee,  the Company and the holders
of Debentures shall thereafter be determined,  exercised and enforced  hereunder
subject in all respects to such  modifications  and amendments and all the terms
and conditions of any such  supplemental  indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

         Section 9.4. Notation on Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article IX may bear a notation as to any matter provided for
in such supplemental indenture. If the Company or the Trustee shall so d
etermine, new Debentures so modified as to conform, in the opinion of the Board
of Directors of the Company, to any modification of this Indenture contained in
any such supplemental indenture may be prepared and executed  by  the  Company,
authenticated  by the  Trustee  or the  Authenticating  Agent and  delivered  in
exchange for the Debentures then outstanding.

        Section 9.5.  Evidence of Compliance  of  Supplemental  Indenture  to be
Furnished to Trustee. The Trustee, subject to the provisions of Sections 6.1 and
6.2,  shall, in addition to the documents  required by Section 14.6,  receive an
Officers'  Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental  indenture  executed pursuant hereto complies with the requirements
of this  Article  IX.  The  Trustee  shall  receive  an  Opinion  of  Counsel as
conclusive  evidence that any supplemental  indenture  executed pursuant to this
Article IX is  authorized  or  permitted  by, and conforms to, the terms of this
Article IX and that it is proper for the Trustee  under the  provisions  of this
Article IX to join in the execution thereof.

                                   ARTICLE X.
                            REDEMPTION OF SECURITIES
                            ------------------------

         Section 10.1.  Optional Redemption. The Company  shall  have the  right
(subject to the receipt by the Company of prior approval (i) if the Company is a
bank  holding  company,  from  the  Federal  Reserve,  if  then  required  under
applicable  capital guidelines or policies of the Federal Reserve or (ii) if the
Company is a savings and loan holding  company,  from the OTS, if then  required
under  applicable  capital  guidelines  or  policies  of the OTS) to redeem  the
Debentures,  in whole or in part,  but in all cases in a  principal  amount with


                                       41
<PAGE>

integral  multiples of $1,000.00,  on any Interest  Payment Date on or after the
Interest  Payment  Date  in  December  2010  (the  "Redemption  Date"),  at  the
Redemption Price.

         Section 10.2. Special Event Redemption. If a Special Event shall occur
and be continuing,  the Company shall have the right (subject to the receipt by
the Company of prior approval (i) if the Company is a bank holding company, from
the Federal Reserve, if then required under  applicable  capital  guidelines  or
policies  of the  Federal  Reserve or (ii) if the  Company is a savings and loan
holding  company,  from the  OTS,  if then  required  under  applicable  capital
guidelines or policies of the OTS) to redeem the Debentures in whole, but not in
part, at any Interest Payment Date,  within 120 days following the occurrence of
such Special Event (the  "Special  Redemption  Date") at the Special  Redemption
Price.

         Section 10.3.  Notice of Redemption; Selection of Debentures. In case
the Company shall desire to exercise the right to redeem all, or, as the case
may be, any part of the Debentures, it shall cause to be mailed a notice of such
redemption at least 30 and not more than 60 days prior to the Redemption Date or
the Special  Redemption Date to the holders of Debentures so to be redeemed as a
whole or in part at their last  addresses  as the same  appear on the  Debenture
Register. Such mailing shall be by first class mail. The notice if mailed in the
manner herein provided shall be  conclusively  presumed to have been duly given,
whether or not the holder  receives  such notice.  In any case,  failure to give
such  notice by mail or any defect in the notice to the holder of any  Debenture
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Debenture.

         Each such notice of redemption shall specify the CUSIP number, if any,
of the Debentures to be redeemed, the Redemption Date or the Special Redemption
Date, as applicable, the Redemption Price or the Special Redemption Price, as
applicable, at which Debentures are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Debentures, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. If less than all
the Debentures are to be redeemed the notice of redemption shall specify the
numbers of the Debentures to be redeemed. In case the Debentures are to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion thereof will be
issued.

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

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

         Section 10.4. Payment of Debentures Called for Redemption. If notice of
redemption  has been  given as  provided  in Section  10.3,  the  Debentures  or
portions of  Debentures  with  respect to which such notice has been given shall
become due and payable on the  Redemption  Date or Special  Redemption  Date, as
applicable,  and at the place or places stated in such notice at the  applicable
Redemption Price or Special  Redemption Price and on and after said date (unless
the Company  shall default in the payment of such  Debentures at the  Redemption
Price or Special Redemption Price, as applicable)  interest on the Debentures or
portions  of  Debentures  so called for  redemption  shall  cease to accrue.  On
presentation and surrender of such Debentures at a place of payment specified in


                                       42
<PAGE>

said notice, such Debentures or the specified portions thereof shall be paid and
redeemed by the Company at the applicable Redemption Price or Special Redemption
Price.

         Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Debenture or
Debentures of authorized denominations, in principal amount equal to the
unredeemed portion of the Debenture so presented.

                                  ARTICLE XI.
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
                -------------------------------------------------

         Section 11.1. Company May Consolidate, etc., on Certain Terms.  Nothing
contained in this Indenture or in the Debentures shall prevent any consolidation
or  merger  of the  Company  with or  into  any  other  Person  (whether  or not
affiliated  with the Company) or successive  consolidations  or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any sale,  conveyance,  transfer or other disposition of the property of
the Company or its successor or successors as an entirety,  or  substantially as
an entirety, to any other Person (whether or not affiliated with the Company, or
its  successor  or  successors)  authorized  to acquire  and  operate  the same;
provided,  however,  that the Company hereby covenants and agrees that, upon any
such consolidation, merger (where the Company is not the surviving corporation),
sale, conveyance, transfer or other disposition, the due and punctual payment of
the principal of (and premium,  if any) and interest on all of the Debentures in
accordance with their terms,  according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
to be  kept  or  performed  by  the  Company,  shall  be  expressly  assumed  by
supplemental  indenture  satisfactory  in  form  to  the  Trustee  executed  and
delivered  to the Trustee by the entity  formed by such  consolidation,  or into
which the  Company  shall have been  merged,  or by the entity  which shall have
acquired such property.

         Section 11.2.  Successor Entity to be Substituted.  In case of any such
consolidation,  merger, sale, conveyance, transfer or other disposition and upon
the assumption by the successor entity, by supplemental indenture,  executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debentures and the due and punctual performance and observance of all of the
covenants and  conditions  of this  Indenture to be performed or observed by the
Company,  such  successor  entity shall  succeed to and be  substituted  for the
Company, with the same effect as if it had been named herein as the Company, and
thereupon the predecessor  entity shall be relieved of any further  liability or
obligation hereunder or upon the Debentures. Such successor entity thereupon may
cause to be signed,  and may issue in its own name, any or all of the Debentures
issuable  hereunder which  theretofore shall not have been signed by the Company
and delivered to the Trustee or the Authenticating Agent; and, upon the order of
such  successor  entity  instead of the  Company  and  subject to all the terms,
conditions  and  limitations in this  Indenture  prescribed,  the Trustee or the
Authenticating  Agent  shall  authenticate  and  deliver  any  Debentures  which
previously  shall have been signed and delivered by the officers of the Company,
to  the  Trustee  or  the  Authenticating  Agent  for  authentication,  and  any
Debentures which such successor  entity  thereafter shall cause to be signed and
delivered to the Trustee or the Authenticating  Agent for that purpose.  All the
Debentures  so issued shall in all respects have the same legal rank and benefit
under this  Indenture as the  Debentures  theretofore  or  thereafter  issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof.

         Section 11.3.  Opinion of Counsel to be Given to Trustee.  The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall receive, in addition to
the  Opinion  of  Counsel  required  by  Section  9.5,  an Opinion of Counsel as
conclusive evidence that any consolidation,  merger, sale, conveyance,  transfer


                                       43
<PAGE>

or other disposition, and any assumption,  permitted or required by the terms of
this Article XI complies with the provisions of this Article XI.

                                  ARTICLE XII.
                     SATISFACTION AND DISCHARGE OF INDENTURE
                     ---------------------------------------

         Section 12.1. Discharge of Indenture. When

          (a)  the Company  shall  deliver to the Trustee for  cancellation  all
               Debentures  theretofore  authenticated (other than any Debentures
               which shall have been  destroyed,  lost or stolen and which shall
               have been  replaced or paid as  provided in Section  2.6) and not
               theretofore canceled, or

          (b)  all the Debentures not  theretofore  canceled or delivered to the
               Trustee for  cancellation  shall have become due and payable,  or
               are by their terms to become due and payable within 1 year or are
               to be called  for  redemption  within 1 year  under  arrangements
               satisfactory   to  the  Trustee  for  the  giving  of  notice  of
               redemption,  and the Company shall  deposit with the Trustee,  in
               trust,  funds,  which  shall  be  immediately  due  and  payable,
               sufficient  to pay at  maturity  or  upon  redemption  all of the
               Debentures  (other  than any  Debentures  which  shall  have been
               destroyed,  lost or stolen and which shall have been  replaced or
               paid as  provided  in Section  2.6) not  theretofore  canceled or
               delivered to the Trustee for  cancellation,  including  principal
               and  premium,  if any,  and interest due or to become due to such
               date of  maturity  or  redemption  date,  as the case may be, but
               excluding,  however,  the amount of any moneys for the payment of
               principal of, and premium,  if any, or interest on the Debentures
               (1)  theretofore  repaid to the  Company in  accordance  with the
               provisions  of Section  12.4,  or (2) paid to any state or to the
               District  of  Columbia  pursuant  to its  unclaimed  property  or
               similar laws,

and if in the case of either clause (a) or clause (b) the Company shall also pay
or cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect except for the provisions of
Sections 2.5, 2.6, 2.8, 3.1, 3.2, 3.4, 6.6, 6.8, 6.9 and 12.4 hereof shall
survive until such Debentures shall mature and be paid. Thereafter, Sections 6.6
and 12.4 shall survive, and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with, and at the cost and expense
of the Company, shall execute proper instruments acknowledging satisfaction of
and discharging this Indenture. The Company agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the Trustee
in connection with this Indenture or the Debentures.

         Section 12.2.  Deposited Moneys to be Held in Trust by Trustee. Subject
to the provisions of Section 12.4, all moneys deposited with the Trustee
pursuant to Section 12.1 shall be held in trust in a non-interest bearing
account and applied  by it to the payment, either directly or through any paying
agent (including the Company if acting as its own paying agent), to the holders
of the particular Debentures for the payment of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal,  and premium, if any, and interest.

         Section 12.3. Paying Agent to Repay Moneys Held. Upon the satisfaction
and discharge of this Indenture all moneys then held by any paying  agent of the
Debentures (other than the Trustee) shall, upon demand of the Company, be repaid
to it or paid to the Trustee,  and thereupon such paying agent shall be released
from all further liability with respect to such moneys.

                                       44
<PAGE>

         Section 12.4. Return of Unclaimed Moneys. Any moneys deposited with or
paid to the Trustee or any paying agent for payment of the principal of, and
premium, if any, or interest on Debentures and not applied but remaining
unclaimed by the holders of Debentures for 2 years after the date upon which the
principal of, and premium, if any, or interest on such Debentures, as the case
may be, shall have become due and payable, shall, subject to applicable
escheatment laws, be repaid to the Company by the Trustee or such paying agent
on written demand; and the holder of any of the Debentures shall thereafter look
only to the Company for any payment which such holder may be entitled to
collect, and all liability of the Trustee or such paying agent with respect to
such moneys shall thereupon cease.

                                 ARTICLE XIII.
                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                    ----------------------------------------
                             OFFICERS AND DIRECTORS
                             ----------------------

         Section 13.1. Indenture and Debentures Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or interest
on any Debenture, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any  supplemental indenture,  or in any such
Debenture,  or because of the creation of any indebtedness  represented thereby,
shall  be had  against  any  incorporator,  stockholder,  employee,  officer  or
director,  as such, past,  present or future, of the Company or of any successor
Person of the Company,  either  directly or through the Company or any successor
Person of the Company, whether by virtue of any constitution, statute or rule of
law, or by the  enforcement of any assessment or penalty or otherwise,  it being
expressly  understood  that all such  liability is hereby  expressly  waived and
released as a condition  of, and as a  consideration  for, the execution of this
Indenture and the issue of the Debentures.

                                  ARTICLE XIV.
                            MISCELLANEOUS PROVISIONS
                            ------------------------

         Section 14.1.  Successors. All the covenants, stipulations, promises
and agreements of the Company in this Indenture shall bind its  successors  and
assigns whether so expressed or not.

         Section 14.2.  Official Acts by Successor Entity. Any act or proceeding
by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee,
officer or other  authorized  Person of any entity that shall at the time be the
lawful successor of the Company.

         Section 14.3.  Surrender of Company Powers. The Company by instrument
in writing executed by authority  of at least 2/3  (two-thirds)  of its Board of
Directors and delivered to the Trustee may surrender any of the powers  reserved
to the Company and thereupon such power so surrendered  shall  terminate both as
to the Company, and as to any permitted successor.

         Section 14.4. Addresses for Notices, etc. Any notice, consent,
direction, request, authorization, waiver or demand which by any provision of
this Indenture is required or permitted to be given, made, furnished or served
by the Trustee or by the Securityholders on or to the Company may be given or
served in writing by being deposited  postage prepaid by registered or certified
mail in a post office letter box addressed (until another address is filed by
the Company, with the Trustee for the purpose) to the Company, 27710 Jefferson
Avenue, A-100, Temecula, California 92590-2669, Attention: Donald A. Pitcher.
Any notice, consent, direction, request, authorization, waiver or demand by  any
Securityholder  or the  Company to or upon the  Trustee  shall be deemed to have
been sufficiently  given or made, for all purposes,  if given or made in writing
at the office of the Trustee,  addressed to the Trustee,  Rodney  Square  North,
1100 North Market Street, Wilmington, Delaware 19890-1600,  Attention: Corporate


                                       45
<PAGE>

Trust Administration.  Any notice, consent, direction,  request,  authorization,
waiver  or  demand  on or to any  Securityholder  shall be  deemed  to have been
sufficiently given or made, for all purposes, if given or made in writing at the
address set forth in the Debenture Register.

         Section 14.5.  Governing Law. This Indenture and each Debenture shall
be deemed to be a contract made under the law of the State of New York, and for
all purposes shall be governed by and construed in accordance with the law of
said State, without regard to conflict of laws principles thereof.

         Section 14.6.  Evidence of Compliance with Conditions Precedent. Upon
any application or demand by the Company to the Trustee to take any action under
any of the provisions of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that in the opinion of the signers all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.

         Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not in the opinion of such
person, such condition or covenant has been complied with.

         Section 14.7. Table of Contents, Headings, etc. The table of contents
and the titles and headings of the articles and sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof,  and shall in no way modify or restrict  any of the terms or  provisions
hereof.

         Section 14.8. Execution in Counterparts.This Indenture may be executed
in any number of counterparts,  each of  which  shall be an  original,  but such
counterparts shall together constitute but one and the same instrument.

         Section 14.9. Separability. In case any  one or more of the  provisions
contained in this Indenture or in the Debentures shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or  unenforceability  shall not affect any other provisions of this Indenture or
of such Debentures, but this Indenture and such Debentures shall be construed as
if such invalid or illegal or  unenforceable  provision had never been contained
herein or therein.

         Section 14.10. Assignment. The Company will have the right at all times
to assign any of its rights or  obligations under this Indenture  to a direct or
indirect wholly owned Subsidiary of the Company,  provided that, in the event of
any such  assignment,  the Company will remain liable for all such  obligations.
Subject to the  foregoing,  this  Indenture  is  binding  upon and inures to the
benefit of the parties hereto and their respective  successors and assigns. This
Indenture may not otherwise be assigned by the parties hereto.

         Section 14.11. Acknowledgment of Rights. The Company agrees that,  with
respect to any Debentures held by the Trust or the Institutional  Trustee of the
Trust,  if the  Institutional  Trustee of the Trust  fails to enforce its rights
under  this  Indenture  as the holder of  Debentures  held as the assets of such
Trust  after the  holders of a majority  in  Liquidation  Amount of the  Capital
Securities of such Trust have so directed such  Institutional  Trustee, a holder
of record of such Capital  Securities  may, to the fullest  extent  permitted by


                                       46
<PAGE>

law,  institute legal  proceedings  directly against the Company to enforce such
Institutional  Trustee's rights under this Indenture  without first  instituting
any legal proceedings against such trustee or any other Person.  Notwithstanding
the  foregoing,  if an Event of Default has occurred and is continuing  and such
event is attributable to the failure of the Company to pay interest (or premium,
if any) or principal on the Debentures on the date such interest (or premium, if
any) or  principal is otherwise  payable (or in the case of  redemption,  on the
redemption  date),  the  Company  agrees  that a holder  of  record  of  Capital
Securities of the Trust may directly  institute a proceeding against the Company
for  enforcement  of payment to such  holder  directly of the  principal  of (or
premium,  if any) or interest on the  Debentures  having an aggregate  principal
amount equal to the aggregate  Liquidation  Amount of the Capital  Securities of
such holder on or after the respective due date specified in the Debentures.

                                  ARTICLE XV.
                           SUBORDINATION OF DEBENTURES
                           ---------------------------

         Section 15.1.  Agreement to Subordinate. The Company covenants and
agrees, and each holder of Debentures by such Securityholder's acceptance
thereof likewise covenants and agrees, that all Debentures shall be issued
subject to the provisions of this Article XV; and each holder of a Debenture,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.

         The payment by the Company of the principal of, and premium, if any,
and interest on all Debentures shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.

         No provision of this Article XV shall prevent the occurrence of any
default or Event of Default hereunder.

         Section 15.2. Default on Senior Indebtedness. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any other payment due on any Senior Indebtedness of the
Company following any grace period, or in the event that the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default and
such acceleration has not been rescinded or canceled and such Senior
Indebtedness has not been paid in full, then, in either case, no payment shall
be made by the Company with respect to the principal (including redemption) of,
or premium, if any, or interest on the Debentures.

         In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 15.2, such payment shall, subject to Section 15.7, be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.

         Section 15.3. Liquidation, Dissolution, Bankruptcy. Upon any payment by
the Company or distribution  of assets of the Company of any kind or  character,
whether in cash,  property or securities,  to creditors upon any  dissolution or
winding-up or liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due upon all Senior  Indebtedness  of the Company shall first be paid in
full, or payment  thereof  provided for in money in  accordance  with its terms,
before any  payment is made by the  Company,  on account of the  principal  (and


                                       47
<PAGE>

premium,  if any) or interest on the  Debentures.  Upon any such  dissolution or
winding-up or  liquidation  or  reorganization,  any payment by the Company,  or
distribution of assets of the Company of any kind or character, whether in cash,
property or  securities,  to which the  Securityholders  or the Trustee would be
entitled to receive from the Company,  except for the provisions of this Article
XV, shall be paid by the Company,  or by any  receiver,  trustee in  bankruptcy,
liquidating trustee,  agent or other Person making such payment or distribution,
or by the  Securityholders or by the Trustee under this Indenture if received by
them or it,  directly  to the holders of Senior  Indebtedness  (pro rata to such
holders on the basis of the respective  amounts of Senior  Indebtedness  held by
such  holders,  as  calculated  by  the  Company)  or  their  representative  or
representatives,  or to the trustee or trustees under any indenture  pursuant to
which any instruments  evidencing such Senior Indebtedness may have been issued,
as their  respective  interests may appear,  to the extent necessary to pay such
Senior  Indebtedness in full, in money or money's worth,  after giving effect to
any  concurrent  payment or  distribution  to or for the  holders of such Senior
Indebtedness,  before any payment or distribution is made to the Securityholders
or to the Trustee.

         In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness is paid in full, or provision is made for
such payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness, remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in money in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the benefit of the holders of such Senior Indebtedness.

         For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Debentures to the payment of all Senior Indebtedness, that may at the
time be outstanding, provided that (i) such Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of such Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article XI of this Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article XI
of this Indenture. Nothing in Section 15.2 or in this Section shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.6 of this
Indenture.

         Section 15.4. Subrogation. Subject to the payment in full of all Senior
Indebtedness,  the  Securityholders  shall be  subrogated  to the  rights of the
holders of such Senior  Indebtedness  to receive  payments or  distributions  of
cash,  property  or  securities  of  the  Company,  applicable  to  such  Senior
Indebtedness  until the principal of (and  premium,  if any) and interest on the
Debentures  shall be paid in full.  For the  purposes  of such  subrogation,  no
payments or  distributions  to the holders of such  Senior  Indebtedness  of any
cash,  property or securities to which the  Securityholders or the Trustee would
be entitled  except for the  provisions  of this Article XV, and no payment over
pursuant  to the  provisions  of this  Article  XV to or for the  benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as


                                       48
<PAGE>

between the Company,  its creditors other than holders of Senior Indebtedness of
the  Company,  and the  holders of the  Debentures  be deemed to be a payment or
distribution by the Company to or on account of such Senior Indebtedness.  It is
understood  that the  provisions of this Article XV are and are intended  solely
for  the  purposes  of  defining  the  relative  rights  of the  holders  of the
Securities, on the one hand, and the holders of such Senior Indebtedness, on the
other hand.

         Nothing contained in this Article XV or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company, other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XV of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company, received
upon the exercise of any such remedy.

         Upon any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee, subject to the provisions of Article VI of this
Indenture, and the Securityholders shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.

         Section 15.5. Trustee to Effectuate Subordination. Each Securityholder
by such Securityholder's acceptance thereof authorizes and directs the Trustee
on such Securityholder's behalf to take  such  action  as may be  necessary  or
appropriate  to  effectuate  the  subordination  provided in this Article XV and
appoints the Trustee such Securityholder's attorney-in-fact for any and all such
purposes.

         Section 15.6. Notice by the Company. The Company shall give prompt
written notice to a Responsible Officer of the Trustee at the Principal Office
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article XV. Notwithstanding the provisions of
this Article XV or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts that would  prohibit the
making  of  any  payment  of  monies  to or by the  Trustee  in  respect  of the
Debentures  pursuant to the  provisions  of this Article XV,  unless and until a
Responsible  Officer of the Trustee at the Principal Office of the Trustee shall
have received  written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor;  and before the receipt of any
such written  notice,  the Trustee,  subject to the  provisions of Article VI of
this  Indenture,  shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided  for in this  Section at least 2  Business  Days prior to the date upon
which  by the  terms  hereof  any  money  may  become  payable  for any  purpose
(including,  without limitation, the payment of the principal of (or premium, if
any) or interest on any  Debenture),  then,  anything  herein  contained  to the
contrary  notwithstanding,  the Trustee  shall have full power and  authority to
receive  such  money and to apply the same to the  purposes  for which they were
received,  and shall not be affected by any notice to the  contrary  that may be
received by it within 2 Business Days prior to such date.

                                       49
<PAGE>

         The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness (or a
trustee or representative on behalf of such holder), to establish that such
notice has been given by a holder of such Senior Indebtedness or a trustee or
representative on behalf of any such holder or holders. In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.

         Section 15.7. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article XV in respect of any Senior Indebtedness at any time held
by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.

         With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of such Senior Indebtedness and, subject
to the provisions of Article VI of this Indenture, the Trustee shall not be
liable to any holder of such Senior Indebtedness if it shall pay over or deliver
to Securityholders, the Company or any other Person money or assets to which any
holder of such Senior Indebtedness shall be entitled by virtue of this Article
XV or otherwise.

         Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.6.

         Section 15.8. Subordination May Not Be Impaired. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company, or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company,
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or otherwise be charged with.

         Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Securityholders, without
incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Debentures to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, and any other Person.

                     Signatures appear on the following page



                                       50
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized, as of the
day and year first above written.

                           TEMECULA VALLEY BANCORP INC.


                           By   /s/
                             ---------------------------------------------------
                                Name:
                                Title:


                           WILMINGTON TRUST COMPANY, as Trustee


                           By   /s/
                             ---------------------------------------------------
                                Name:
                                Title:



                                       51
<PAGE>
                                    EXHIBIT A

     FORM OF FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE

                           [FORM OF FACE OF SECURITY]

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

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

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

                                      A-1
<PAGE>

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

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

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

         Floating Rate Junior Subordinated Deferrable Interest Debenture

                                       of

                          Temecula Valley Bancorp Inc.

                               September 29, 2005

         Temecula Valley Bancorp Inc., a California corporation (the "Company"
which term includes any successor Person under the Indenture hereinafter
referred to), for value received promises to pay to Wilmington Trust Company,
not in its individual capacity but solely as Institutional Trustee for Temecula
Valley Statutory Trust IV (the "Holder") or registered assigns, the principal
sum of eight million two hundred forty-eight thousand dollars ($8,248,000.00) on
December 15, 2035, and to pay interest on said principal sum from September 29,
2005, or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 15, June 15, September 15 and December 15
of each year or if such day is not a Business Day, then the next succeeding
Business Day (each such date, an "Interest Payment Date") (it being understood
that interest accrues for any such non-Business Day), commencing on the Interest
Payment Date in December 2005, at an annual rate equal to 5.42038% beginning on
(and including) the date of original issuance and ending on (but excluding) the
Interest Payment Date in December 2005 and at an annual rate for each successive
period beginning on (and including) the Interest Payment Date in December 2005,
and each succeeding Interest Payment Date, and ending on (but excluding) the
next succeeding Interest Payment Date (each a "Distribution Period"), equal to
3-Month LIBOR, determined as described below, plus 1.40% (the "Coupon Rate"),
applied to the principal amount hereof, until the principal hereof is paid or
duly provided for or made available for payment, and on any overdue principal
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest
(including Additional Interest) at the Interest Rate in effect for each
applicable period, compounded quarterly, from the dates such amounts are due

                                      A-2
<PAGE>

until they are paid or made available for payment. The amount of interest
payable for any period will be computed on the basis of the actual number of
days in the Distribution Period concerned divided by 360. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such interest
installment, which shall be fifteen Business Days prior to the day on which the
relevant Interest Payment Date occurs. Any such interest installment not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such regular record date and may be paid to the Person in whose name
this Debenture (or one or more Predecessor Securities) is registered at the
close of business on a special record date.

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

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

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

                                      A-3
<PAGE>

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

         So long as no Acceleration Event of Default has occurred and is
continuing, the Company shall have the right, from time to time, and without
causing an Event of Default, to defer payments of interest on the Debentures by
extending the interest payment period on the Debentures at any time and from
time to time during the term of the Debentures, for up to 20 consecutive
quarterly periods (each such extended interest payment period, an "Extension
Period"), during which Extension Period no interest (including Additional
Interest) shall be due and payable (except any Additional Sums that may be due
and payable). No Extension Period may end on a date other than an Interest
Payment Date. During an Extension Period, interest will continue to accrue on
the Debentures, and interest on such accrued interest will accrue at an annual
rate equal to the Interest Rate in effect for such Extension Period, compounded
quarterly from the date such interest would have been payable were it not for
the Extension Period, to the extent permitted by law (such interest referred to
herein as "Additional Interest"). At the end of any such Extension Period the
Company shall pay all interest then accrued and unpaid on the Debentures
(together with Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date; provided further, however,
that during any such Extension Period, the Company shall not and shall not
permit any Affiliate to engage in any of the activities or transactions
described on the reverse side hereof and in the Indenture. Prior to the
termination of any Extension Period, the Company may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Company may commence a new Extension Period, subject to
the foregoing requirements. No interest or Additional Interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest. The Company must give the
Trustee notice of its election to begin or extend an Extension Period by the
close of business at least 15 Business Days prior to the Interest Payment Date
with respect to which interest on the Debentures would have been payable except
for the election to begin or extend such Extension Period.

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

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



                                      A-4
<PAGE>

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


                                      A-5
<PAGE>

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

                          TEMECULA VALLEY BANCORP INC.


                          By
                            ----------------------------------------------------
                               Name:
                               Title:


                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                          WILMINGTON TRUST COMPANY, as Trustee


                          By:
                             ---------------------------------------------------
                               Authorized Officer


                                      A-6
<PAGE>



                         [FORM OF REVERSE OF DEBENTURE]

         This Debenture is one of the floating rate junior subordinated
deferrable interest debentures of the Company, all issued or to be issued under
and pursuant to the Indenture dated as of September 29, 2005 (the "Indenture"),
duly executed and delivered between the Company and the Trustee, to which
Indenture reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Debentures. The Debentures are limited in
aggregate principal amount as specified in the Indenture.

         Upon the occurrence and continuation of a Special Event prior to the
Interest Payment Date in December 2010, the Company shall have the right to
redeem the Debentures in whole, but not in part, at any Interest Payment Date,
within 120 days following the occurrence of such Special Event, at the Special
Redemption Price.

         In addition, the Company shall have the right to redeem the Debentures,
in whole or in part, but in all cases in a principal amount with integral
multiples of $1,000.00, on any Interest Payment Date on or after the Interest
Payment Date in December 2010, at the Redemption Price.

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

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

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

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

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

                                      A-7
<PAGE>


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

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

         The Company has agreed that if Debentures are initially issued to the
Trust or a trustee of such Trust in connection with the issuance of Trust
Securities by the Trust (regardless of whether Debentures continue to be held by
such Trust) and (i) there shall have occurred and be continuing an Event of
Default, (ii) the Company shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee, or (iii) the Company shall
have given notice of its election to defer payments of interest on the
Debentures by extending the interest payment period as provided herein and such
Extension Period, or any extension thereof, shall be continuing, then the
Company shall not, and shall not allow any Affiliate of the Company to, (x)
declare or pay any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of the Company's capital
stock or its Affiliates' capital stock (other than payments of dividends or
distributions to the Company) or make any guarantee payments with respect to the
foregoing or (y) make any payment of principal of or interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company or any
Affiliate that rank pari passu in all respects with or junior in interest to the
Debentures (other than, with respect to clauses (x) and (y) above, (1)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, if any, (2) as a result of any exchange or
conversion of any class or series of the Company's capital stock (or any capital
stock of a subsidiary of the Company) for any class or series of the Company's
capital stock or of any class or series of the Company's indebtedness for any
class or series of the Company's capital stock, (3) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (4) any declaration of a dividend in connection with any
stockholders' rights plan, or the issuance of rights, stock or other property
under any stockholders' rights plan, or the redemption or repurchase of rights
pursuant thereto, (5) any dividend in the form of stock, warrants, options or


                                      A-8
<PAGE>

other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional shares issued in connection therewith, or
(6) payments under the Capital Securities Guarantee).

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

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

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

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

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

                                      A-9
<PAGE>

                                    EXHIBIT B

                         FORM OF CERTIFICATE TO TRUSTEE

         Pursuant to Section 3.5 of the Indenture between Temecula Valley
Bancorp Inc., as the Company (the "Company"), and Wilmington Trust Company, as
Trustee, dated as of September 29, 2005 (the "Indenture"),  the undersigned
hereby certifies as follows:

          1.   In my capacity  as an officer of the  Company,  I would  normally
               have  knowledge  of any  default by the  Company  during the last
               fiscal year in the  performance  of any  covenants of the Company
               contained in the Indenture.

          2.   [To  my  knowledge,   the  Company  is  not  in  default  in  the
               performance  of any  covenants  contained in the  Indenture.  or,
               alternatively: I am aware of the default(s) in the performance of
               covenants in the  Indentures,  as specified  below.]  Capitalized
               terms used herein,  and not otherwise  defined  herein,  have the
               respective meanings ascribed thereto in the Indenture. IN WITNESS
               WHEREOF, the undersigned has executed this Certificate.

Date:


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