Document:

Exhibit 4.2

 

 

 

WILSHIRE STATE BANK,

as Issuer

 

 

INDENTURE

 

Dated as of December 19, 2002

 

 

STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL

ASSOCIATION,

as Trustee

 

 

FLOATING RATE JUNIOR SUBORDINATED DEBENTURES

 

DUE 2012

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. DEBENTURES

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Authentication and Dating

  	
   

  	
  5

  
	
  Section 2.2.

  	
   

  	
  Form of Trustee’s Certificate of Authentication

  	
   

  	
  5

  
	
  Section 2.3.

  	
   

  	
  Form and Denomination of Debentures

  	
   

  	
  6

  
	
  Section 2.4.

  	
   

  	
  Execution of Debentures

  	
   

  	
  6

  
	
  Section 2.5.

  	
   

  	
  Exchange and Registration of Transfer of Debentures

  	
   

  	
  6

  
	
  Section 2.6.

  	
   

  	
  Mutilated, Destroyed, Lost or Stolen Debentures

  	
   

  	
  8

  
	
  Section 2.7.

  	
   

  	
  Temporary Debentures

  	
   

  	
  9

  
	
  Section 2.8.

  	
   

  	
  Payment of Interest and Additional Interest

  	
   

  	
  9

  
	
  Section 2.9.

  	
   

  	
  Cancellation of Debentures Paid, etc.

  	
   

  	
  11

  
	
  Section 2.10.

  	
   

  	
  Computation of Interest Rate

  	
   

  	
  11

  
	
  Section 2.11.

  	
   

  	
  CUSIP Numbers

  	
   

  	
  12

  
	
  Section 2.12.

  	
   

  	
  Regulation S Compliance

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III. PARTICULAR COVENANTS OF THE BANK

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

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

  	
   

  	
  14

  
	
  Section 3.2.

  	
   

  	
  Offices for Notices and Payments, etc.

  	
   

  	
  14

  
	
  Section 3.3.

  	
   

  	
  Appointments to Fill Vacancies in Trustee’s Office

  	
   

  	
  14

  
	
  Section 3.4.

  	
   

  	
  Provision as to Paying Agent

  	
   

  	
  14

  
	
  Section 3.5.

  	
   

  	
  Certificate to Trustee

  	
   

  	
  15

  
	
  Section 3.6.

  	
   

  	
  Compliance with Consolidation Provisions

  	
   

  	
  15

  
	
  Section 3.7.

  	
   

  	
  Limitation on Dividends

  	
   

  	
  15

  
	
  Section 3.8.

  	
   

  	
  Federal Regulatory Approval Required

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV. SECURITYHOLDERS’ LISTS AND REPORTS BY THE BANK AND THE
  TRUSTEE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Securityholders’ Lists

  	
   

  	
  16

  
	
  Section 4.2.

  	
   

  	
  Preservation and Disclosure of Lists

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Events of Default

  	
   

  	
  18

  
	
  Section 5.2.

  	
   

  	
  Payment of Debentures on Default; Suit Therefor

  	
   

  	
  19

  
	
  Section 5.3.

  	
   

  	
  Application of Moneys Collected by Trustee

  	
   

  	
  20

  
	
  Section 5.4.

  	
   

  	
  Proceedings by Securityholders

  	
   

  	
  21

  
	
  Section 5.5.

  	
   

  	
  Proceedings by Trustee

  	
   

  	
  21

  
	
  Section 5.6.

  	
   

  	
  Remedies Cumulative and Continuing; Delay or Omission Not a Waiver

  	
   

  	
  21

  
	
  Section 5.7.

  	
   

  	
  Direction of Proceedings and Waiver of Defaults by Majority of
  Securityholders

  	
   

  	
  22

  
	
  Section 5.8.

  	
   

  	
  Notice of Defaults

  	
   

  	
  22

  

 

i

 

	
  Section 5.9.

  	
   

  	
  Undertaking to Pay Costs

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI. CONCERNING THE TRUSTEE

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Duties and Responsibilities of Trustee

  	
   

  	
  23

  
	
  Section 6.2.

  	
   

  	
  Reliance on Documents, Opinions, etc.

  	
   

  	
  23

  
	
  Section 6.3.

  	
   

  	
  No Responsibility for Recitals, etc.

  	
   

  	
  24

  
	
  Section 6.4.

  	
   

  	
  Trustee, Authenticating Agent, Paying Agents, Transfer
  Agents or Registrar May Own Debentures

  	
   

  	
  25

  
	
  Section 6.5.

  	
   

  	
  Moneys to be Held in Trust

  	
   

  	
  25

  
	
  Section 6.6.

  	
   

  	
  Compensation and Expenses of Trustee

  	
   

  	
  25

  
	
  Section 6.7.

  	
   

  	
  Officers’ Certificate as Evidence

  	
   

  	
  26

  
	
  Section 6.8.

  	
   

  	
  Eligibility of Trustee

  	
   

  	
  26

  
	
  Section 6.9.

  	
   

  	
  Resignation or Removal of Trustee

  	
   

  	
  26

  
	
  Section 6.10.

  	
   

  	
  Acceptance by Successor Trustee

  	
   

  	
  27

  
	
  Section 6.11.

  	
   

  	
  Succession by Merger, etc.

  	
   

  	
  28

  
	
  Section 6.12.

  	
   

  	
  Authenticating Agents

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII. CONCERNING THE SECURITYHOLDERS

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  Action by Securityholders

  	
   

  	
  29

  
	
  Section 7.2.

  	
   

  	
  Proof of Execution by Securityholders

  	
   

  	
  30

  
	
  Section 7.3.

  	
   

  	
  Who Are Deemed Absolute Owners

  	
   

  	
  30

  
	
  Section 7.4.

  	
   

  	
  Debentures Owned by Bank Deemed Not Outstanding

  	
   

  	
  30

  
	
  Section 7.5.

  	
   

  	
  Revocation of Consents; Future Holders Bound

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII. SECURITYHOLDERS’ MEETINGS

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Purposes of Meetings

  	
   

  	
  31

  
	
  Section 8.2.

  	
   

  	
  Call of Meetings by Trustee

  	
   

  	
  31

  
	
  Section 8.3.

  	
   

  	
  Call of Meetings by Bank or Securityholders

  	
   

  	
  31

  
	
  Section 8.4.

  	
   

  	
  Qualifications for Voting

  	
   

  	
  31

  
	
  Section 8.5.

  	
   

  	
  Regulations

  	
   

  	
  31

  
	
  Section 8.6.

  	
   

  	
  Voting

  	
   

  	
  32

  
	
  Section 8.7.

  	
   

  	
  Quorum; Actions

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX. SUPPLEMENTAL INDENTURES

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Supplemental Indentures without Consent of
  Securityholders

  	
   

  	
  33

  
	
  Section 9.2.

  	
   

  	
  Supplemental Indentures with Consent of Securityholders

  	
   

  	
  34

  
	
  Section 9.3.

  	
   

  	
  Effect of Supplemental Indentures

  	
   

  	
  35

  
	
  Section 9.4.

  	
   

  	
  Notation on Debentures

  	
   

  	
  35

  
	
  Section 9.5.

  	
   

  	
  Evidence of Compliance of Supplemental Indenture to be
  Furnished to Trustee

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X. REDEMPTION OF SECURITIES

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
   

  	
  Optional Redemption

  	
   

  	
  35

  
	
  Section 10.2.

  	
   

  	
  Notice of Redemption; Selection of Debentures

  	
   

  	
  35

  
	
  Section 10.3.

  	
   

  	
  Payment of Debentures Called for Redemption

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Bank May Consolidate, etc., on Certain Terms

  	
   

  	
  36

  

 

ii

 

	
  Section 11.2.

  	
   

  	
  Successor Entity to be Substituted

  	
   

  	
  37

  
	
  Section 11.3.

  	
   

  	
  Opinion of Counsel to be Given to Trustee

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
   

  	
  Discharge of Indenture

  	
   

  	
  37

  
	
  Section 12.2.

  	
   

  	
  Deposited Moneys to be Held in Trust by Trustee

  	
   

  	
  38

  
	
  Section 12.3.

  	
   

  	
  Paying Agent to Repay Moneys Held

  	
   

  	
  38

  
	
  Section 12.4.

  	
   

  	
  Return of Unclaimed Moneys

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
   

  	
  Indenture and Debentures Solely Corporate Obligations

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV. MISCELLANEOUS PROVISIONS

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.1.

  	
   

  	
  Successors

  	
   

  	
  39

  
	
  Section 14.2.

  	
   

  	
  Official Acts by Successor Entity

  	
   

  	
  39

  
	
  Section 14.3.

  	
   

  	
  Surrender of Bank Powers

  	
   

  	
  39

  
	
  Section 14.4.

  	
   

  	
  Addresses for Notices, etc.

  	
   

  	
  39

  
	
  Section 14.5.

  	
   

  	
  Governing Law

  	
   

  	
  39

  
	
  Section 14.6.

  	
   

  	
  Evidence of Compliance with Conditions Precedent

  	
   

  	
  39

  
	
  Section 14.7.

  	
   

  	
  Non-Business Days

  	
   

  	
  40

  
	
  Section 14.8.

  	
   

  	
  Table of Contents, Headings, etc.

  	
   

  	
  40

  
	
  Section 14.9.

  	
   

  	
  Execution in Counterparts

  	
   

  	
  40

  
	
  Section 14.10.

  	
   

  	
  Separability

  	
   

  	
  40

  
	
  Section 14.11.

  	
   

  	
  Assignment

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV. SUBORDINATION OF DEBENTURES

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 15.1.

  	
   

  	
  Agreement to Subordinate

  	
   

  	
  40

  
	
  Section 15.2.

  	
   

  	
  Default on Senior Indebtedness

  	
   

  	
  40

  
	
  Section 15.3.

  	
   

  	
  Liquidation, Dissolution, Bankruptcy

  	
   

  	
  41

  
	
  Section 15.4.

  	
   

  	
  Subrogation

  	
   

  	
  42

  
	
  Section 15.5.

  	
   

  	
  Trustee to Effectuate Subordination

  	
   

  	
  42

  
	
  Section 15.6.

  	
   

  	
  Notice by the Bank

  	
   

  	
  43

  
	
  Section 15.7.

  	
   

  	
  Rights of the Trustee; Holders of Senior Indebtedness

  	
   

  	
  43

  
	
  Section 15.8.

  	
   

  	
  Subordination May Not Be Impaired

  	
   

  	
  43

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Junior Subordinated Debenture

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of Regulation S Certificate

  	
   

  	
   

  
							

 

iii

 

THIS INDENTURE, dated as of December 19, 2002, between Wilshire
State Bank, a state nonmember bank organized under the laws of California (the “Bank”),
and State Street Bank and Trust Company of Connecticut, National Association, a
national banking association organized under the laws of the United States of
America, as debenture trustee (the “Trustee”).

 

WITNESSETH:

 

WHEREAS, for its lawful corporate purposes, the Bank has duly
authorized the issuance of its Floating Rate Junior Subordinated Debentures due
2012 (the “Debentures”) under this Indenture to provide, among other
things, for the execution and authentication, delivery and administration
thereof, and the Bank 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 Bank 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.

 

“Additional Interest” means interest, if any, that shall accrue
on any interest on the Debentures the payment of which has not been made on the
applicable Interest Payment Date and which shall accrue at the Interest Rate,
compounded quarterly (to the extent permitted by law).

 

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

 

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

 

“Bank” means Wilshire State Bank, a state nonmember bank
organized under the laws of California and, subject to the provisions of Article XI,
shall include its successors and assigns.

 

“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
Bank.

 

1

 

“Board Resolution” means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Bank 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 Hartford,
Connecticut are permitted or required by any applicable law to close.

 

“Certificate” means a certificate signed by any one of the
principal executive officer, the principal financial officer or the principal
accounting officer of the Bank.

 

“Coupon Rate” has the meaning set forth in Section 2.8.

 

“Debenture” or “Debentures” means a Temporary Debenture
or a Permanent Debenture, as applicable.

 

“Debenture Register” has the meaning specified in Section 2.5.

 

“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.

 

“Distribution Compliance Period” has the meaning set forth in Rule 902
of Regulation S.

 

“Distribution Period” has the meaning set forth in Section 2.8.

 

“Determination Date” has the meaning set forth in Section 2.10.

 

“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.

 

“FDIC” means the Federal Deposit Insurance Corporation and any
successor federal agency that is primarily responsible for insuring the deposit
accounts of banks or supervising state banks that are not members of the
Federal Reserve.

 

“Federal Reserve” means the Board of Governors of the Federal
Reserve System and any successor federal agency that is primarily responsible
for regulating the activities of bank holding companies and state member banks.

 

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

 

“Interest Payment Date,” means each March 26, June 26,
September 26 and December 26 during the term of this Indenture.

 

“Interest Rate” means for the period beginning on (and
including) the date of original issuance and ending on (but excluding) March 26,
2003 the rate per annum of 4.51% and for each Distribution Period thereafter,
the Coupon Rate.

 

“Maturity Date” means December 26, 2012.

 

2

 

“State Nonmember Bank Securities Laws” means the federal laws
applicable to state nonmember banks (12 U.S.C. 1811 et seq.), as amended from
time to time or any successor legislation, and the regulations promulgated
thereunder, including 12 C.F.R. Part 335.

 

“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 Bank, 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 Bank, 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.

 

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 Bank) or shall have been set aside and
segregated in trust by the Bank (if the Bank 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 Bank and the Trustee
is presented that any such Debentures are held by bona fide holders in due
course.

 

“Permanent Debenture” has the meaning set forth in Section 2.12.

 

“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 225 Asylum Street, Goodwin Square, Hartford,
Connecticut 06103.

 

“Redemption Date” has the meaning set forth in. Section 10.1.

 

3

 

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

 

“Regulation S” means Regulation S under the Securities Act.

 

“Regulation S Certificate” has the meaning set forth in Section 2.12.

 

“Release Date” has the meaning set forth in Section 2.12.

 

“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.

 

“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 Bank or the Trustee for that purpose in
accordance with the terms hereof.

 

“Senior Indebtedness” means, with respect to the Bank, all
claims (including post default interest in the case of liquidation of the Bank)
against the Bank, incurred, assumed or guaranteed by the Bank, having the same
priority as the Bank’s obligations to its depositors, its obligations under
bankers’ acceptances and letters of credit, and its obligations to any other
creditors (including its obligations to the Federal Reserve, FDIC, and any
rights acquired by the FDIC as a result of loans made by the FDIC to the Bank
or the purchase or guarantee of any of its assets by the FDIC pursuant to the
provisions of 12 USC §1823(c), (d) or (e)), whether now outstanding or
hereafter incurred, or any higher priority, and the principal, premium, if any,
and interest in respect thereof, whether incurred on or prior to the date of
this Indenture or thereafter incurred. Notwithstanding the foregoing, “Senior
Indebtedness” shall not include Debentures issued pursuant to this Indenture or
obligations with respect to which 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. 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.

 

“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.

 

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

 

4

 

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

 

“Temporary Debenture” has the meaning set forth in Section 2.12.

 

“Trustee” means State Street Bank and Trust Company of
Connecticut, National Association, 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 $10,000,000.00 may be executed and delivered by the Bank to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery said Debentures to or upon the written order of the
Bank, signed by its Chairman of the Board of Directors, Chief Executive
Officer, Vice Chairman, President, one of its Managing Directors or one of its
Vice Presidents without any further action by the Bank hereunder. 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 Bank, 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 Bank 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 Bank, 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

 

(2)                                  that
all laws and requirements in respect of the execution and delivery by the Bank
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:

 

5

 

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

 

State Street Bank and Trust Company of Connecticut, National
Association, 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 voided 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 Bank 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 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 Bank
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 Bank 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 Bank, 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 Bank; and any Debenture may
be signed on behalf of the Bank by such Persons as, at the actual date of the
execution of such Debenture, shall be the proper officers of the Bank, 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 Bank 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 Bank 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 Bank for such
purpose as provided in Section 3.2, and the Bank shall execute, the Bank
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

 

6

 

transfer of any Debenture at the Principal Office of the Trustee or at
any office or agency of the Bank maintained for such purpose as provided in Section 3.2,
the Bank shall execute, the Bank 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank, upon the advice of
counsel expert in securities law, in accordance with applicable law:

 

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

 

THIS OBLIGATION IS SUBORDINATED TO CLAIMS OF DEPOSITORS, IS UNSECURED,
AND IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE BANK.

 

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 (INCLUDING 12 U.S.C. 1811 ET SEQ. AND 12 C.F.R. PART 335
PROMULGATED THEREUNDER (THE “STATE NONMEMBER BANK SECURITIES LAWS”)) AND
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 OTHER APPLICABLE SECURITIES LAW, INCLUDING THE STATE NONMEMBER BANK
SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE BANK, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER, AS
APPLICABLE, THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, (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

 

7

 

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 THE
STATE NONMEMBER BANK SECURITIES LAWS, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AS APPLICABLE, THE
SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, SUBJECT TO THE BANK’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
BANK.

 

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 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 Bank 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 Bank 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 Bank

 

8

 

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 Bank.
Upon the issuance of any substituted Debenture, the Bank 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 Bank 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 Bank 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 Bank 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 Bank, 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 Bank 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 Bank. Every such temporary Debenture shall be executed by the
Bank 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 Bank 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 Bank for such purpose as provided in Section 3.2, and
the 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 Bank at its own expense and without any charge therefor except that in case
of any such exchange involving a registration of transfer the Bank 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. In the event that
any Debenture or portion thereof is

 

9

 

called for redemption and the redemption date is subsequent to a
regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Debenture will be paid upon
presentation and surrender of such Debenture.

 

Each Debenture shall bear interest for the period beginning on (and
including) the date of original issuance and ending on (but excluding) March 26,
2003 at a rate per annum of 4.51%, and shall bear interest for each successive
period beginning on (and including) March 26, 2003, and each succeeding
Interest Payment Date, and ending on (but excluding) the next succeeding
Interest Payment Date (each, a “Distribution Period”) at a rate per
annum equal to the 3-Month LIBOR, determined as described in Section 2.10,
plus 3.10% (the “Coupon Rate”); provided, however,
that prior to December 26, 2007, the Coupon Rate shall not exceed 11.75%,
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 at the Interest Rate compounded quarterly.
Interest shall be payable quarterly in arrears on each Interest Payment Date
with the first installment of interest to be paid on March 26, 2003.

 

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 Bank 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 Bank 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 Bank 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 Bank of
such special record date and, in the name and at the expense of the Bank, 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.

 

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

 

The Bank shall not pay any interest on the Debentures while it remains
in default in the payment of any assessment due to the FDIC; provided,
that, if such default is due to a dispute between the Bank and the FDIC over
the amount of such assessment, this limitation shall not apply, if the Bank
deposits security satisfactory to the FDIC for payment upon final determination
of the issue.

 

The term “regular record date” as used in this Section shall mean
the close of business on the 15th day next preceding the applicable Interest
Payment Date.

 

10

 

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 Bank 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 Bank otherwise directs
the Trustee in writing. If the Bank 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 Rate. The
amount of interest payable for the Distribution Period commencing on March 26,
2003 and each succeeding Distribution Period will be calculated by applying the
Interest Rate to the principal amount outstanding at the commencement of the
Distribution Period and multiplying each such amount by the actual number of
days in the Distribution Period concerned divided by 360. In the event that any
date on which interest is payable on the Debentures is not a Business Day, then
payment of interest payable on such date shall be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable. 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 Dow Jones Telerate
Service or such other page as may replace Page 3750 on that service
or such other service or services as may be nominated by the British Bankers’
Association as the information vendor for the purpose of displaying London
interbank offered rates for U.S. dollar deposits;

 

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

 

(3)                                  if
fewer than two such quotations are provided as requested in clause (2) above,
the 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.

 

11

 

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 Coupon 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 Bank and any securities exchange or interdealer quotation system on which the Debentures 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 Bank or any securities exchange or interdealer quotation system, or any
defect in said notice, shall not affect the obligation of the Bank 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 by the Trustee will (in the absence
of willful default, bad faith and manifest error) be final, conclusive and binding on the Bank and all of the
holders of the Debentures, and no liability shall (in the absence of willful
default, bad faith or manifest error) attach to the Trustee in connection with
the exercise or non-exercise by either of them or their respective powers,
duties and discretion.

 

Section 2.11.                    CUSIP
Numbers. The Bank 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 Bank will
promptly notify the Trustee in writing of any change in the CUSIP numbers.

 

Section 2.12.                    Regulation
S Compliance.

 

(a)                             Notwithstanding anything
in this Article II to the contrary all Debentures issued
on or before the expiration of the Distribution Compliance Period will be in
the form of a temporary Debenture (“Temporary Debentures”) and will
contain the following additional legend:

 

12

 

THIS DEBENTURE IS A TEMPORARY DEBENTURE FOR PURPOSES OF REGULATION S
UNDER THE SECURITIES ACT (AS DEFINED BELOW). NEITHER THIS TEMPORARY DEBENTURE
NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS
PERMITTED UNDER THE INDENTURE REFERRED TO BELOW. NO BENEFICIAL OWNERS OF THIS
TEMPORARY DEBENTURE SHALL BE ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR
INTEREST HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT
TO THE TERMS OF THE INDENTURE.

 

Holders of a beneficial interest in
Debentures sold in reliance on Regulation S are prohibited from receiving
distributions or from exchanging beneficial interests in Temporary Debentures
for a beneficial interest in a Permanent Debenture until the later of (i) the
expiration of the Distribution Compliance Period (the “Release Date”)
and (ii) the furnishing of a certificate, substantially in the form of Exhibit B
attached hereto, certifying that the beneficial owner of the Temporary
Debenture is not a “U.S. Person” as defined in Section 902 of Regulation S
(a “Regulation S Certificate”).

 

(b)                                 Any
interest in a Debenture evidenced by a Temporary Debenture is exchangeable for
an interest in a Debenture, authenticated and delivered in substantially the
form attached as Exhibit A hereto, without the legend referenced in Section 2.12(a) (the
“Permanent Debenture”) upon the later of (i) the Release Date and (ii) the
furnishing of a Regulation S Certificate.

 

(c)                                  On
or prior to the Release Date, each holder of a Temporary Debenture shall
deliver to the Trustee a Regulation S Certificate; provided, however,
that any holder of a Temporary
Debenture on the Release Date that has previously delivered a Regulation S
Certificate hereunder shall not be required to deliver any subsequent
Regulation S Certificate (unless the certificate previously delivered is no
longer true as of such subsequent date, in which case such holder shall
promptly notify the Trustee thereof and shall deliver an updated Regulation S
Certificate). No Securityholder shall be entitled to receive an interest in a
Permanent Debenture or any payment of principal of or interest on or any other
payment with respect to its beneficial interest in a Temporary Debenture prior
to the Trustee receiving such Regulation S Certificate.

 

(d)                                 Any
payments of principal of, interest on or any other payment on a Temporary Debenture
received by the Trustee with respect to any Debenture owned by a Securityholder
that has not delivered the Regulation S Certificate required by this Section 2.12
shall be held by the Trustee. The Trustee shall remit such payments to the
applicable Securityholder only after the Trustee has received the requisite
Regulation S Certificate, at which time the Trustee shall forward such payments
to the Securityholder that is entitled thereto on its records.

 

(e)                                  Each
Securityholder shall exchange its interest in a Temporary Debenture for an
interest in a Permanent Debenture on or after the Release Date upon furnishing
to the Trustee the Regulation S Certificate pursuant to the terms of this Section 2.12.
On and after the Release Date, upon receipt by the Trustee of any Regulation S
Certificate described in the immediately preceding sentence, the Bank shall
execute and, upon receipt of an order to authenticate, the Authentication Agent
shall authenticate and deliver the Permanent Debenture; provided, however,
that a Permanent Debenture may have been previously executed by the Bank and an
order to authenticate specifying the date on which authentication is to take
place may have been delivered by the Bank to the Trustee prior to the Release
Date.

 

13

 

ARTICLE III.

PARTICULAR COVENANTS OF THE BANK

 

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

 

(a)                                       The
Bank 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 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 holder of Debentures entitled thereto as
they appear on the registry books of the Bank if a request for a wire transfer
has not been received by the Bank 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.

 

(b)                                      The
Bank 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.

 

Section 3.2.                           Offices
for Notices and Payments, etc. So long as any of the Debentures remain
outstanding, the Bank will maintain in Hartford, Connecticut, 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 Bank in respect of the Debentures or of this
Indenture may be served. The Bank 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 Bank 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 Bank shall fail to maintain any such office or agency in
Hartford, Connecticut, 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
Bank may from time to time designate one or more offices or agencies outside
Hartford, Connecticut, where the Debentures may be presented for registration
of transfer and for exchange in the manner provided in this Indenture, and the
Bank may from time to time rescind such designation, as the Bank may deem
desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Bank of its
obligation to maintain any such office or agency in Hartford, Connecticut, for
the purposes above mentioned. The Bank 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 Bank, 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 Bank 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,

 

14

 

(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 Bank 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 Bank (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 Bank
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, 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 or interest so becoming due and
will notify the Trustee in writing of any failure to take such action and of
any failure by the Bank (or by any other obligor under 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 become due and payable.

 

Whenever the Bank 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 or interest 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank they would normally have
knowledge of any default during such fiscal year by the Bank 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.

 

Section 3.6.                                Compliance
with Consolidation Provisions. The Bank 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 3.7.                                Limitation
on Dividends. If there shall have occurred
and be continuing an Event of Default, then the Bank shall not, and shall not
allow any Affiliate of the Bank 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 Bank’s capital stock or its Affiliates’ capital
stock (other than payments of dividends or distributions to the Bank) or make
any guarantee payments with respect to the foregoing or (y) make

 

15

 

any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Bank 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 Bank 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 Bank (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Event of Default, (2) as
a result of any exchange or conversion of any class or series of the Bank’s
capital stock (or any capital stock of a subsidiary of the Bank) for any class
or series of the Bank’s capital stock or of any class or series of the Bank’s
indebtedness for any class or series of the Bank’s capital stock, (3) the
purchase of fractional interests in shares of the Bank’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, or (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).

 

Section 3.8.                           Regulatory Approval Required. The Debentures may
not be repaid in the case of an acceleration due to an Event of Default or
voluntarily redeemed without the prior written approval of or, if applicable,
written notice to the FDIC. If such approval is necessary, within 30 days after
receipt of any declaration of acceleration pursuant to Section 5.1, the
Bank will apply to the FDIC for written approval of repayment prior to
maturity. In the event that the Bank obtains such prior written approval, the
Bank shall notify the Securityholders, and the Trustee will arrange for prompt
payment on the Debentures.

 

No payment shall at any time be made on
account of the principal of this Debenture, unless following such payment the
aggregate of the Bank’s shareholders’ equity and capital notes or debentures
thereafter outstanding shall be the equal of such aggregate at the date of the
original issue of this Debenture, or as otherwise authorized by the California
Commissioner of Financial Institutions.

 

ARTICLE IV.

SECURITYHOLDERS’
LISTS AND REPORTS

BY THE BANK AND THE TRUSTEE

 

Section 4.1.                           Securityholders’ Lists. The Bank covenants
and agrees that it will furnish or caused 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
Bank 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.

 

16

 

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

 

(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 or the FDIC, 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 or the FDIC, 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 or the FDIC 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 Bank and the
Trustee that neither the Bank 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).

 

17

 

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
Bank defaults in the payment of any interest upon any Debenture when it becomes
due and payable, and fails to cure such default for a period of 30 days; or

 

(b)                            the
Bank 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
Bank 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 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 Bank by the
Trustee or to the Bank 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 Bank 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 Bank 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
Bank 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 Bank 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.

 

If an 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 Bank (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.

 

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, the
Bank 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

 

18

 

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, and if any and
all Events of Default under this Indenture, 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
Bank 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 Bank,
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 Bank, 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 Bank covenants that upon the
occurrence of an Event of Default pursuant to Section 5.1(a) or Section 5.1(b) then,
upon demand of the Trustee, the Bank 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, 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 Bank
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 Bank or any other obligor on such Debentures and collect in the
manner provided by law out of the property of the Bank 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 Bank 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 Bank or such other obligor, or in the case of any other
similar judicial proceedings relative to the Bank or other obligor upon the
Debentures, or to the creditors or property of the Bank 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 and, in case of any judicial
proceedings,

 

(ii)                             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 Bank or any other obligor on the
Debentures, or to the

 

19

 

creditors or property of the Bank or 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 Bank 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 for principal (and premium, if any) and
interest, respectively; and

 

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

 

20

 

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 or
power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right 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 or by the Securityholders.

 

No delay or omission of the Trustee or any Securityholder to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to any Securityholder may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee (in accordance with its
duties under Section 6.1 hereof) or by such holder, as the case may be.

 

21

 

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 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
or (b) in respect of covenants or provisions hereof which cannot be
modified or amended without the consent of the holder of each Debenture
affected. Upon any such waiver, the default covered thereby shall be deemed to
be cured for all purposes of this Indenture and the Bank, 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) and (e) 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 Bank on or after the same shall have become due
and payable.

 

22

 

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:

 

23

 

(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 Bank 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 Bank;

 

(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(b) or 5.1(c), 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 Bank 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 Bank, and the Trustee and the Authenticating Agent assume
no responsibility for the correctness of the same. The Trustee and the
Authenticating Agent make no representations as to the validity or sufficiency
of this Indenture or of the Debentures. The Trustee and

 

24

 

the Authenticating Agent shall not be accountable for the use or
application by the Bank 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 Bank. 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 Bank,
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 Bank.

 

Section 6.6.                                Compensation
and Expenses of Trustee. The Bank 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 Bank 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 Bank 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 Bank 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) or Section 5.1(e),
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 Bank.

 

25

 

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 Bank may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Bank, 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 §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 Bank and by mailing notice
thereof, at the Bank’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 Bank 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 Bank or by any Securityholder who has been a bona fide holder
of a Debenture or Debentures for at least 6 months, or

 

26

 

(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 Bank or by any such Securityholder, or

 

(3)                        the Trustee shall become incapable of acting,
or shall be adjudged a 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank, 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 necessary
to provide for or facilitate the administration of the trust hereunder by more
than one

 

27

 

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 Bank 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 Bank 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 Bank.

 

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 Bank 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 Bank 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.

 

28

 

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 Bank. 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
Bank. 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 Bank
shall, promptly appoint a successor Authenticating Agent eligible under this Section 6.12,
shall give written notice of such appointment to the Bank 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
Bank 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 Bank shall solicit from the Securityholders any request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, the Bank 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 Bank 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 of the same, and for that purpose the outstanding Debentures shall
be computed as of the record date; provided, however, that
no such authorization,

 

29

 

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 Bank, 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 Bank 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 Bank
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 Bank 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 Bank 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 Bank or any such other
obligor or Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Bank 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 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

 

30

 

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 Bank 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 Bank is not a holder of
Debentures, to the Bank. 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 Bank or
Securitvholders. In case
at any time the Bank 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 Bank 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 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 Bank 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

 

31

 

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 Bank or by
Securityholders as provided in Section 8.3, in which case the Bank 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 provided, however,ty 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 Bank 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 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

 

32

 

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 Bank, 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 Bank, or successive successions, and the assumption by the successor
Person of the covenants, agreements and obligations of the Bank, pursuant to Article XI
hereof;

 

(b)                                 to add to the covenants of the Bank 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;

 

(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 (for purposes of

 

33

 

assuring
that no registration of Debentures is required under the Securities Act or the
State Nonmember Bank Securities Laws); provided, however, that
any such action shall not adversely affect the interests of the holders of the
Debentures then outstanding;

 

(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 Bank 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 Bank 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 Bank, 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.

 

Upon
the request of the Bank 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 Bank 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 Bank 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 Bank, setting forth in
general terms the substance of such supplemental indenture, to the

 

34

 

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 Bank 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 Bank or the Trustee shall so determine, new Debentures so
modified as to conform, in the opinion of the Board of Directors of the Bank,
to any modification of this Indenture contained in any such supplemental
indenture may be prepared and executed by the Bank, 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 Bank shall have the right (subject to
the receipt by the Bank of prior written approval by the FDIC if then required
under applicable regulations of the FDIC) 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 March 26, June 26, September 26 or December 26
on or after December 26, 2007 (the “Redemption Date”) at the Redemption
Price.

 

Section 10.2.                         Notice of Redemption; Selection
of Debentures. In case
the Bank 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
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.

 

35

 

Each
such notice of redemption shall specify the CUSIP number, if any, of the
Debentures to be redeemed, the Redemption Date, the Redemption Price 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 Bank 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, together with accrued interest to the Redemption Date
or Special Redemption Date, as applicable.

 

If
all, or less than all, the Debentures are to be redeemed, the Bank 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 10.3.                         Payment of Debentures Called for
Redemption. If notice of redemption has been given as
provided in Section 10.2, the Debentures or portions of Debentures with
respect to which such notice has been given shall become due and payable on the
Redemption Date and at the place or places stated in such notice at the
applicable Redemption Price, together with interest accrued to the Redemption
Date and on and after said date (unless the Bank shall default in the payment
of such Debentures at the Redemption Price, together with interest accrued to
said date) 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 said notice, such Debentures or
the specified portions thereof shall be paid and redeemed by the Bank at the
applicable Redemption Price, together with interest accrued thereon to the
Redemption Date.

 

Upon
presentation of any Debenture redeemed in part only, the Bank shall execute and
the Trustee shall authenticate and make available for delivery to the holder
thereof, at the expense of the Bank, 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.                         Bank May Consolidate, etc.,
on Certain Terms.  Nothing
contained in this Indenture or in the Debentures shall prevent any
consolidation or merger of the Bank with or into any other Person (whether or
not affiliated with the Bank) or successive consolidations or mergers in which
the Bank or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance, transfer or other disposition of the property or
capital stock of the Bank or its successor or successors as an entirety, or
substantially as an entirety, to any other Person (whether or not affiliated
with the Bank, or its successor or successors) authorized to acquire and
operate the same; provided, however, that the Bank hereby
covenants and agrees that, upon any such consolidation, merger (where the Bank
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,

 

36

 

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 Bank, 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 Bank 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 Bank, such
successor entity shall succeed to and be substituted for the Bank, with the
same effect as if it had been named herein as the Bank, 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 Bank and
delivered to the Trustee or the Authenticating Agent; and, upon the order of
such successor entity instead of the Bank 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 Bank, 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 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
Bank 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 Bank 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

 

37

 

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 Bank 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
Bank shall also pay or cause to be paid all other sums payable hereunder by the
Bank, 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 Bank 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 Bank, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture. The Bank 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 Bank 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 Bank, 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.

 

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 Bank by the Trustee or
such paying agent on written demand; and the holder of any of the Debentures
shall thereafter look only to the Bank 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 Bank 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 Bank or of any successor Person of the Bank, either directly or through
the Bank or any successor Person of the Bank, 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.

 

38

 

ARTICLE XIV.
 MISCELLANEOUS PROVISIONS

 

Section 14.1.       Successors. All the covenants, stipulations,
promises and agreements of the Bank 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 Bank 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 Bank.

 

Section 14.3.        Surrender of Bank Powers.
The Bank 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 Bank and thereupon such power so
surrendered shall terminate both as to the Bank, 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 Bank
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 Bank, with the Trustee for the purpose) to the
Bank, 3200 Wilshire Boulevard, Los Angeles, California 90010, Attention: Brian
E. Cho. Any notice, consent, direction, request, authorization, waiver or
demand by any Securityholder or the Bank 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, 225 Asylum
Street, Goodwin Square, Hartford, Connecticut 06103 Attention: Vice President,
Corporate Trust Department, with a copy to State Street Bank and Trust Company,
P.O. Box 778, Boston, Massachusetts 02102-0778, Attention: Paul D. Allen,
Corporate Trust Department. 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 Bank to the Trustee to take any action under
any of the provisions of this Indenture, the Bank 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.

 

39

 

Section 14.7.       Non-Business Days.
In any case where the date of payment of interest on or principal of the
Debentures will be a day that is not a Business Day, the payment of such
interest on or principal of the Debentures need not be made on such date but
may be made on the next succeeding Business Day, except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the original date of payment, and no interest shall accrue for
the period from and after such date.

 

Section 14.8.       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 14.9.        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 14.10.      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 14.11.      Assignment. The
Bank 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 Bank, provided that, in the event of any such assignment, the
Bank 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. In addition, the obligations of
the Bank may be assigned in accordance with Section 11.3. This Indenture may
not otherwise be assigned by the parties hereto.

 

ARTICLE XV.

SUBORDINATION OF DEBENTURES

 

Section 15.1.        Agreement to Subordinate. The Bank
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 Bank 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 Bank, 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 Bank in the payment
of principal, premium, interest or any other payment due on any Senior
Indebtedness of the Bank following any grace period, or in the event that the
maturity of any Senior Indebtedness of the Bank has been accelerated because of
a default and such acceleration has not

 

40

 

been rescinded or canceled, then, in either case, no payment shall be
made by the Bank 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 Bank or
distribution of assets of the Bank of any kind or character, whether in cash,
properly or securities, to creditors upon any insolvency, receivership,
conservatorship, reorganization, readjustment of debt, marshaling of assets and
liabilities or similar proceedings or any liquidation or winding up of or
relating to the Bank, whether voluntary or involuntary, all amounts due upon
all Senior Indebtedness of the Bank 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 Bank, on account of the principal (and premium, if any) or
interest on the Debentures. In the event of any such proceedings, any payment
by the Bank, or distribution of assets of the Bank of any kind or character,
whether in cash, property or securities, which the Securityholders or the
Trustee would be entitled to receive from the Bank, except for the provisions
of this Article XV, shall be paid by the Bank, 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 Bank) 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 Bank 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 Bank,
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 Bank as
reorganized or readjusted, or securities of the Bank 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

 

41

 

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 Bank with, or the
merger of the Bank into, another corporation or the liquidation or dissolution
of the Bank 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 Bank,
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 between the Bank, its creditors other than holders of
Senior Indebtedness of the Bank, and the holders of the Debentures be deemed to
be a payment or distribution by the Bank 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
Bank, its creditors other than the holders of Senior Indebtedness, and the
holders of the Debentures, the obligation of the Bank, 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 Bank, 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 Bank, received upon the exercise of any such remedy.

 

Upon any payment or distribution of assets of the Bank 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 Bank, 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.

 

42

 

Section 15.6.       Notice
by the Bank. The Bank 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 Bank 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 Bank 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.

 

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 Bank 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 Bank, or by any act or failure to act,

 

43

 

in good faith, by any such holder, or by any noncompliance by the Bank,
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 Bank, and any other Person.

 

Signatures appear on the
following page

 

44

 

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.

 

	
   

  	
  WILSHIRE
  STATE BANK

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Brian Cho

  
	
   

  	
  Name:

  	
  Brian
  Cho

  
	
   

  	
  Title:

  	
  SVP/CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STATE
  STREET BANK AND TRUST COMPANY OF

  
	
   

  	
  CONNECTICUT,
  NATIONAL ASSOCIATION, as

  
	
   

  	
  Trustee

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Paul D. Allen

  
	
   

  	
  Name:

  	
  Paul
  D. Allen

  
	
   

  	
  Title:

  	
  Vice
  President

  
				

 

45

 

EXHIBIT A

 

FORM OF JUNIOR SUBORDINATED
DEBENTURE

 

[FORM OF FACE OF SECURITY]

 

[TO
BE INCLUDED IN THE TEMPORARY DEBENTURE ONLY - THIS DEBENTURE IS A TEMPORARY
DEBENTURE FOR PURPOSES OF REGULATION S UNDER THE SECURITIES ACT (AS DEFINED
BELOW). NEITHER THIS TEMPORARY DEBENTURE NOR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO
BELOW. NO BENEFICIAL OWNERS OF THIS TEMPORARY DEBENTURE SHALL BE ENTITLED TO
RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.]

 

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

 

THIS
OBLIGATION IS SUBORDINATED TO CLAIMS OF DEPOSITORS, IS UNSECURED, AND IS
INELIGIBLE AS COLLATERAL FOR A LOAN BY THE BANK.

 

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 (INCLUDING 12 U.S.C. 1811 ET SEQ. AND 12 C.F.R. PART 335
PROMULGATED THEREUNDER (THE “STATE NONMEMBER BANK SECURITIES LAWS”)) AND
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 OTHER APPLICABLE SECURITIES LAW, INCLUDING THE STATE NONMEMBER BANK
SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE BANK, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER, AS
APPLICABLE, THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, (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 THE STATE
NONMEMBER BANK SECURITIES LAWS, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AS APPLICABLE, THE SECURITIES
ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, SUBJECT TO THE BANK’S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL,

 

A-1

 

CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A
COPY OF WHICH MAY BE OBTAINED FROM THE BANK.

 

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 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 Debenture

 

of

 

Wilshire State Bank

 

December 19, 2002

 

Wilshire
State Bank, a state nonmember bank organized under the laws of California (the “Bank”
which term includes any successor Person under the Indenture hereinafter
referred to), for value received promises to pay to Hare & Co. (the “Holder”),
as nominee for The Bank of New York, indenture trustee

 

A-2

 

under the Indenture dated as of December 19, 2002 among Preferred
Term Securities VIII, Ltd., Preferred Term Securities VIII, Inc. and The
Bank of New York or registered assigns, the principal sum of ten million
dollars ($10,000,000.00) on December 26, 2012, and to pay interest on said
principal sum from December 19, 2002, or from the most recent interest
payment date (each such date, an “Interest Payment Date”) to which interest has
been paid or duly provided for, quarterly in arrears on March 26, June 26,
September 26 and December 26 of each year commencing March 26,
2003, at an annual rate equal to 4.51% beginning on (and including) the date of
original issuance and ending on (but excluding) March 26, 2003 and at an
annual rate for each successive period beginning on (and including) March 26,
2003, 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 3.10% (the “Coupon Rate”);
provided, however, that prior to December 26, 2007, the
Coupon Rate shall not exceed 11.75%, 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) on any overdue
installment of interest at the same rate per annum, compounded quarterly, from
the dates such amounts are due until they are paid or made available for
payment. The amount of interest payable for any period will be computed on the
basis of the actual number of days in the Distribution Period concerned divided
by 360. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then a payment of the interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date the payment was
originally payable. 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 days prior to
the day on which the relevant Interest Payment Date occurs. Any such interest
installment not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such regular record date and may be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date.

 

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

 

A-3

 

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

 

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

 

The principal of and interest on this Debenture shall be payable at the
office or agency of the Trustee (or other paying agent appointed by the Bank)
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 Bank or by wire transfer to an account
appropriately designated by the holder hereof.

 

The indebtedness of the Bank evidenced by this Debenture shall be
subordinate and junior in right of payment to all claims (including post
default interest in the case of liquidation of the Bank) against the Bank,
incurred, assumed or guaranteed by the Bank, having the same priority as the
Bank’s obligations to its depositors, its obligations under bankers’
acceptances and letters of credit, and its obligations to any other creditors
(including its obligations to the Federal Reserve, FDIC, and any rights
acquired by the FDIC as a result of loans made by the FDIC to the Bank or the
purchase or guarantee of any of its assets by the FDIC pursuant to the
provisions of 12 USC § 1823(c), (d) or (e)), whether now outstanding or
hereafter incurred, or any higher priority, and the principal, premium, if any,
and interest in respect thereof, whether incurred on or prior to the date of
this Indenture or thereafter incurred. Notwithstanding the foregoing, the
indebtedness of the Bank evidenced by this Debenture shall not be subordinate
and junior in right of payment to obligations with respect to which 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. The obligations that are senior in right of payment to this
Debenture shall continue to be senior and be entitled to the subordination provisions
irrespective of any amendment, modification or waiver of any term of such
senior obligations.

 

The Debentures may not be repaid in the case of an acceleration due to
an Event of Default or voluntarily redeemed without the prior written approval of
or, if applicable, written notice to the FDIC. If such approval is necessary,
within 30 days after receipt of any declaration of acceleration pursuant to Section 5.1
of the Indenture, the Bank will apply to the FDIC for written approval of
repayment prior to maturity. In the event that the Bank obtains such prior
written approval, the Bank shall notify the Securityholders, and the Trustee
will arrange for prompt payment on the Debentures.

 

No payment shall at any time be made on account of the principal of
this Debenture, unless following such payment the aggregate of the Bank’s
shareholders’ equity and capital notes or debentures thereafter outstanding
shall be the equal of such aggregate at the date of the original issue of this
Debenture, or as otherwise authorized by the California Commissioner of
Financial Institutions.

 

A-4

 

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

 

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

 

Signatures appear on the
following page

 

A-5

 

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

 

	
   

  	
  WILSHIRE STATE BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

 

CERTIFICATE OF AUTHENTICATION

 

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

 

	
   

  	
  State Street Bank and Trust Company of Connecticut,

  National Association, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  
				

 

A-6

 

[FORM OF REVERSE OF DEBENTURE]

 

This Debenture is one of the floating rate junior subordinated
debentures of the Bank, all issued or to be issued under and pursuant to the
Indenture dated as of December 19, 2002 (the “Indenture”), duly executed
and delivered between the Bank 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 Bank and the
holders of the Debentures. The Debentures are limited in aggregate principal
amount as specified in the Indenture.

 

In addition, the Bank 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 December 26,
2007, at the Redemption Price.

 

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

 

If all, or less than all, the Debentures are to be redeemed, the Bank
will give the Trustee notice not less than 45 nor more than 60 days,
respectively, prior to the Redemption Date 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 Bank
shall be subject to the receipt of any and all required regulatory approvals.

 

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

 

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

 

The Indenture also contains provisions permitting the holders of a
majority in aggregate principal amount of the Debentures at the time
outstanding on behalf of the holders of all of the Debentures to waive (or
modify any previously granted waiver of) any past default or Event of Default,
and its consequences, except a default (a) in the payment of principal of,
premium, if any, or interest on any of the Debentures or (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Debenture affected. Upon any such waiver, the
default covered

 

A-7

 

thereby shall be deemed to be cured for all purposes of the Indenture
and the Bank, 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.

 

In the event of any insolvency, receivership, conservatorship,
reorganization, readjustment of debt, marshaling of assets and liabilities or
similar proceedings or any liquidation or winding up of or relating to the
Bank, whether voluntary or involuntary, all such obligations shall be entitled
to be paid in full before any payment shall be made on account of the principal
of, or premium, if any, or interest, on this Debenture. In the event of any such
proceedings, after payment in full of all sums owing on such prior obligations,
the holder of this Debenture, together with any obligations of the Bank ranking
on a parity with the Debentures, shall be entitled to be paid from the
remaining assets of the Bank the unpaid principal thereof and any unpaid
premium, if any, and interest before any payment or other distribution, whether
in cash, property, or otherwise, shall be made on account of any capital stock
or any obligations of the Bank ranking junior to the Debentures. Nothing herein
shall impair the obligation of the Bank, which is absolute and unconditional,
to pay the principal of and any premium and interest on this Debenture
according to its terms.

 

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 Bank. 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 Bank maintained for such purpose as provided in Section 3.2
of the Indenture, the Bank shall execute, the Bank 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 Bank 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 Bank 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 Bank 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 Bank, 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 Bank 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 Bank in the Indenture or in any supplemental indenture, or in

 

A-8

 

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 Bank or
of any successor Person of the Bank, either directly or through the Bank or any
successor Person of the Bank, 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.

 

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 Bank.

 

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

 

EXHIBIT B

 

FORM OF

 

REGULATION S CERTIFICATE

 

 

January 29, 2003

 

I, Phillip Hinds, a director of Preferred Term Securities VIII, Ltd.,
an exempted company with limited liability duly incorporated under the laws of
the Cayman Islands (the “Company”), hereby request that State Street Bank and
Trust Company of Connecticut, National Association (“State Street”), trustee
under that certain Indenture dated as of December 19, 2002 between Wilshire
State Bank and State Street (the “Indenture”) deliver a Permanent Debenture (as
that term is defined in the Indenture) to The Bank of New York, trustee under
that certain Indenture dated as of December 19, 2002 among the Company,
Preferred Term Securities VIII, Inc. and The Bank of New York in the form
set forth as Exhibit A to the Indenture, without the restrictive legend
relating to the Temporary Debenture (as that term is defined in the Indenture).
In connection with the delivery of such Permanent Debenture, the Company hereby
certifies as follows:

 

(i)      the Company is not a “U.S. Person” as such term is defined in Rule 902
under the United States Securities Act of 1933, as amended; and

 

(ii)     the Company has not acquired the Temporary Debenture and will
not be acquiring the Permanent Debenture for the account or benefit of any such
U.S. Person.

 

 

IN WITNESS WHEREOF, I have hereunto signed my name as of the date first
written above.

 

	
   

  	
   

  	
  PREFERRED TERM SECURITIES VIII, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

B-1Exhibit 10.15

 

 

 

STOCK PURCHASE AGREEMENT

 

 

by and between

 

 

WILSHIRE STATE BANK

 

and

 

OSB FINANCIAL SERVICES, INC.

 

and joined by

 

OSB DELAWARE FINANCIAL SERVICES, INC.

 

and

 

ORANGE SAVINGS BANK, SSB

 

 

Dated as of August 5, 2004

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I. PURCHASE AND SALE OF THE SHARES

  	
   

  	
  2

  
	
  Section 1.01 Acquisition of the Shares

  	
   

  	
  2

  
	
  Section 1.02 Purchase Price

  	
   

  	
  2

  
	
  Section 1.03 Closing and Closing Date

  	
   

  	
  2

  
	
  Section 1.04 Actions to be Taken at the
  Closing by the Seller

  	
   

  	
  2

  
	
  Section 1.05 Actions to be Taken at the
  Closing by the Purchaser

  	
   

  	
  3

  
	
  Section 1.06 Further Assurances

  	
   

  	
  3

  
	
  ARTICLE
  II. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER

  	
   

  	
  3

  
	
  Section 2.01 Compliance with Representations,
  Warranties and Agreements

  	
   

  	
  3

  
	
  Section 2.02 Proceedings and Documents

  	
   

  	
  3

  
	
  Section 2.03 Governmental and Regulatory
  Approvals

  	
   

  	
  3

  
	
  Section 2.04 Closing of the Related
  Transactions

  	
   

  	
  4

  
	
  Section 2.05 No Litigation

  	
   

  	
  4

  
	
  Section 2.06 Retained Assets

  	
   

  	
  4

  
	
  ARTICLE
  III. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER

  	
   

  	
  4

  
	
  Section 3.01 Compliance with Representations,
  Warranties and Agreements

  	
   

  	
  4

  
	
  Section 3.02 Proceedings and Documents

  	
   

  	
  5

  
	
  Section 3.03 Governmental and Regulatory
  Approvals

  	
   

  	
  5

  
	
  Section 3.04 Closing of the Related
  Transactions

  	
   

  	
  5

  
	
  Section 3.05 Deposit

  	
   

  	
  5

  
	
  ARTICLE
  IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER

  	
   

  	
  5

  
	
  Section 4.01 Ownership of the Shares

  	
   

  	
  5

  
	
  Section 4.02 Organization and Qualification
  of the Delaware Company and the Seller

  	
   

  	
  6

  
	
  Section 4.03 Organization and Qualification
  of the Bank

  	
   

  	
  6

  
	
  Section 4.04 Authority and Enforceability

  	
   

  	
  6

  
	
  Section 4.05 No Breach of Contract

  	
   

  	
  6

  
	
  Section 4.06 Bank Capitalization

  	
   

  	
  6

  
	
  Section 4.07 Compliance with Applicable Laws

  	
   

  	
  7

  
	
  Section 4.08 No Consents Necessary

  	
   

  	
  7

  
	
  Section 4.09 Filing of Tax Returns

  	
   

  	
  7

  
	
  Section 4.10 Books and Records

  	
   

  	
  7

  
	
  Section 4.11 Regulatory Compliance

  	
   

  	
  7

  
	
  Section 4.12 Litigation; Lender Liability

  	
   

  	
  7

  
	
  Section 4.13 Insurance

  	
   

  	
  8

  
	
  Section 4.14 Undisclosed Liabilities

  	
   

  	
  8

  
	
  Section 4.15 Environmental Compliance

  	
   

  	
  8

  
	
  Section 4.16 Employee Benefit Plans

  	
   

  	
  8

  
	
  ARTICLE
  V. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

  	
   

  	
  8

  
	
  Section 5.01 Organization and Qualification
  of the Purchaser

  	
   

  	
  8

  
	
  Section 5.02 Authority and Enforceability

  	
   

  	
  9

  
	
  Section 5.03 No Breach of Contract

  	
   

  	
  9

  
	
  Section 5.04 No Consents Necessary

  	
   

  	
  9

  
	
  ARTICLE
  VI. OBLIGATIONS AND COVENANTS OF THE SELLER

  	
   

  	
  9

  
	
  Section 6.01 Best Efforts

  	
   

  	
  9

  
	
  Section 6.02 Confidentiality

  	
   

  	
  9

  
	
  Section 6.03 Compliance with Transfer
  Requirements

  	
   

  	
  10

  
	
  Section 6.04 Information for Applications and
  Statements

  	
   

  	
  10

  
	
  Section 6.05 Required Acts

  	
   

  	
  10

  
	
  Section 6.06 Prohibited Acts

  	
   

  	
  10

  
	
  Section 6.07 Untrue Representations

  	
   

  	
  11

  
	
  Section 6.08 Litigation and Claims

  	
   

  	
  11

  
	
  ARTICLE
  VII. OBLIGATIONS AND COVENANTS OF THE PURCHASER

  	
   

  	
  11

  
	
  Section 7.01 Best Efforts

  	
   

  	
  11

  

 

i

 

	
  Section 7.02 Confidentiality

  	
   

  	
  12

  
	
  Section 7.03 Information for Applications and
  Statements

  	
   

  	
  12

  
	
  Section 7.04 Untrue Representations

  	
   

  	
  12

  
	
  Section 7.05 Litigation and Claims

  	
   

  	
  12

  
	
  Section 7.06 Non Solicitation

  	
   

  	
  12

  
	
  Section 7.07 Purchaser Deposit

  	
   

  	
  13

  
	
  ARTICLE
  VIII. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENT AND OBLIGATIONS;

  	
   

  	
   

  
	
  INDEMNIFICATION

  	
   

  	
  13

  
	
  Section 8.01 Survival

  	
   

  	
  13

  
	
  Section 8.02 Indemnification by the Seller
  and OSB

  	
   

  	
  13

  
	
  Section 8.03 Indemnification by the Purchaser

  	
   

  	
  14

  
	
  Section 8.04 Control of Litigation

  	
   

  	
  14

  
	
  ARTICLE
  IX. TERMINATION AND ABANDONMENT

  	
   

  	
  16

  
	
  Section 9.01 Right of Termination

  	
   

  	
  16

  
	
  Section 9.02 Notice of Termination

  	
   

  	
  17

  
	
  Section 9.03 Effect of Termination

  	
   

  	
  17

  
	
  Section 9.04 Termination Fee

  	
   

  	
  17

  
	
  ARTICLE
  X. MISCELLANEOUS

  	
   

  	
  17

  
	
  Section 10.01 Notices

  	
   

  	
  17

  
	
  Section 10.02 Entire Agreement

  	
   

  	
  18

  
	
  Section 10.03 GOVERNING LAW

  	
   

  	
  18

  
	
  Section 10.04 Severability

  	
   

  	
  18

  
	
  Section 10.05 Attorneys’ Fees and Costs

  	
   

  	
  19

  
	
  Section 10.06 Specific Performance

  	
   

  	
  19

  
	
  Section 10.07 Multiple Counterparts

  	
   

  	
  19

  
	
  Section 10.08 Rules of Construction

  	
   

  	
  19

  
	
  Section 10.09 Commissions

  	
   

  	
  19

  
	
  Section 10.10 Binding Agreement; No
  Assignment

  	
   

  	
  19

  
	
  Section 10.11 Time Is Of The Essence

  	
   

  	
  20

  
	
  Section 10.12 Publicity

  	
   

  	
  20

  

 

ii

 

STOCK PURCHASE AGREEMENT

 

This
STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of the
5th day of August,
2004, by and between WILSHIRE STATE BANK, a California state chartered bank
(the “Purchaser”) and OSB FINANCIAL SERVICES, INC., a Texas corporation (the “Seller”),
and joined in by OSB DELAWARE FINANCIAL SERVICES, INC., a Delaware corporation
(the “Delaware Company”), and Orange Savings Bank, SSB, a Texas state savings
bank (“OSB”).

 

W I T N E S S E T H:

 

WHEREAS,
the Purchaser is a California state bank with its principal offices in Los
Angeles, California;

 

WHEREAS,
the Seller is a Texas corporation and registered bank holding company with its
principal offices in Orange, Texas;

 

WHEREAS,
the Seller owns all of the issued and outstanding shares of common stock of the
Delaware Company;

 

WHEREAS,
the Delaware Company is a Delaware corporation and registered bank holding
company with its principal offices in Dover, Delaware;

 

WHEREAS,
Seller indirectly owns, through the Delaware Company, all of the issued and
outstanding shares of common stock of OSB, and all of the issued and
outstanding shares of common stock (individually, a “Share,” and collectively,
the “Shares”) of Orange Savings Bank of Texas, SSB, a Texas state savings bank
with its principal offices located in Mauriceville, Texas (“OSBOT”);

 

WHEREAS,
the Seller desires to cause the Delaware Company to sell the Shares for cash
and the Purchaser desires to purchase the Shares from the Seller through the
Delaware Company on the terms and conditions contained herein (the “Stock
Acquisition”). Upon completion of the Stock Acquisition, the Purchaser shall be
entitled to immediately engage in banking business in the State of Texas;

 

WHEREAS,
the Stock Acquisition transaction contemplated by this Agreement is part of a
series of integrated transactions by and among the Purchaser, the Seller, the
Delaware Company, OSBOT and OSB, which other transactions include the affiliate
merger of OSBOT with and into OSB with each of OSBOT and OSB surviving the
merger (the “Affiliate Merger Transaction”), OSB’s establishment of branches at
the former locations of OSBOT, the relocation by OSBOT of its domicile or main
office to a location to be determined by the Purchaser in the city limits of
Dallas, Texas, and the merger of OSBOT with and into Purchaser (the Affiliate
Merger Transaction, the establishment of branches by OSB, and the relocation of
the domicile or head office of OSBOT in the city limits of Dallas, Texas are
herein described as the “Related Transactions”), which Related Transactions
will be consummated in conjunction with the Closing (as herein defined) of the
Stock Acquisition as well as any other transactions described in this
Agreement; and

 

1

 

WHEREAS,
the Delaware Company joins this Agreement and appoints the Seller to act on its
behalf in consummating the Stock Acquisition Transaction.

 

NOW,
THEREFORE, for and in consideration of the foregoing and of the mutual
representations, warranties, covenants and agreements contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the conditions set
forth below, the parties, intending to be legally bound, undertake, promise, covenant
and agree with each other as follows:

 

ARTICLE I.

PURCHASE
AND SALE OF THE SHARES

 

Section 1.01           Acquisition of the Shares.
On the terms and subject to the conditions contained in this Agreement, the
Purchaser hereby agrees to purchase and the Seller hereby agrees to sell,
convey, transfer and assign the Shares to the Purchaser, free and clear of all
liens, security interests, pledges, encumbrances, buy-sell agreements,
preemptive rights and adverse claims of every kind and character whatsoever.

 

Section 1.02           Purchase Price.
As consideration for the sale of the Shares, the Purchaser shall pay the Seller
the aggregate amount of $3,205,000 (the “Purchase Price”) in cash at the
Closing, after consummation of the Related Transactions. At Closing, the Seller
shall ensure that OSBOT has Retained Assets (as defined in Section 2.06)
with a fair market value equal to $3,500,000, which shall include $500,000 in
deposits made by the Purchaser or any of its related entities on or prior to
the Closing Date (as defined below).

 

Section 1.03           Closing and Closing Date.
The Stock Acquisition provided for in this Agreement shall be consummated at a
closing (the “Closing”) to be held at a time and place mutually agreed upon by
the Seller, and the Purchaser, which date (the “Closing Date”) shall be not
later than ten (10) days following the receipt of all necessary
regulatory, corporate and other approvals necessary for the consummation of the
transactions contemplated in this Agreement and the Related Transactions (as
required by Section 2.03 and Section 3.03 of this Agreement) and the
expiration of any mandatory waiting periods.

 

Section 1.04           Actions to be Taken at the Closing by the
Seller. At the Closing, after the consummation of
the Related Transactions, the Seller shall execute and acknowledge (as
appropriate) and deliver to the Purchaser such documents and certificates
necessary to carry out the terms and provisions of this Agreement, including
the following (all of such actions constituting conditions precedent to the
Purchaser’s obligations to consummate hereunder):

 

A.            Certificates evidencing and representing the Shares, duly
endorsed in blank or accompanied by stock powers executed in blank. The Shares
shall be delivered to the Purchaser free and clear of any and all liens,
pledges, security interests, encumbrances, buy-sell agreements, preemptive
rights and adverse claims of every kind and character whatsoever.

 

B.            A certificate, dated as of the Closing Date, executed by
the appropriate officers of the Seller, pursuant to which the Seller shall
certify that all of the

 

2

 

representations
and warranties made in ARTICLE IV of this Agreement are true and correct in all
material respects on and as of the Closing Date as if made on such date.

 

C.            Charter of OSBOT and authenticated copies of all
corporate books and records, including, without limitation, the minute books
and stock transfer records, and any other relevant authenticated documents of
OSBOT.

 

D.            The written resignation of all executive officers and
directors of OSBOT.

 

Section 1.05           Actions to be Taken at the Closing
by the Purchaser. At the Closing, after the consummation of the Related
Transactions, the Purchaser shall deliver to the Seller the Purchase Price for the
Shares by one or more wire transfers.

 

Section 1.06           Further Assurances. At any
time and from time to time after the Closing, at the request of any party to
this Agreement arid without further consideration, any party so requested shall
execute and deliver such other instruments and take such other actions as the
requesting party may reasonably deem necessary or desirable in order to effect
the transactions contemplated hereby.

 

ARTICLE II.

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER

 

All
obligations of the Purchaser are subject to the fulfillment, prior to or at the
Closing, of each of the following conditions, any or all of which may be waived
in whole or in part by the Purchaser.

 

Section 2.01           Compliance with Representations,
Warranties and Agreements. All representations and warranties made by the
Seller in this Agreement shall have been true and correct when made and shall
be true and correct in all material respects as of the Closing with the same
force and effect as if such representations and warranties were made at and as
of the Closing. The Seller shall have performed or complied in all material
respects with all agreements, terms, covenants and conditions required by this
Agreement to be performed or complied with by the Seller prior to or at the
Closing.

 

Section 2.02           Proceedings and Documents. All
actions, proceedings, instruments and documents required to effectuate this
Agreement or incidental hereto shall be satisfactory in substance and form to
the Purchaser, and the Purchaser shall have received all such counterpart
originals or certified or other copies of such documents as it may reasonably
request, including certified copies of all resolutions authorizing this
Agreement and the transactions contemplated herein.

 

Section 2.03           Governmental and Regulatory
Approvals. The Purchaser and Seller shall have obtained all governmental
and regulatory approvals and consents necessary for the consummation of the
transactions described in this Agreement on terms and conditions satisfactory
to the Purchaser. Such approvals include, without limitation, the approval of
the Board of Governors of the Federal Reserve System (the “Federal Reserve”)
for the Purchaser to

 

3

 

acquire
control of OSBOT and for OSBOT to move its domicile to Dallas, Texas and to
engage in the business of banking at such location and any other location in
Texas thereafter.

 

Section 2.04           Closing of the Related
Transactions. OSB and OSBOT shall have executed an Agreement and Plan of Merger
(the “Affiliate Merger Agreement”) substantially in the form attached hereto as
Exhibit A and shall have obtained the approval of the Texas Savings
and Loan Department (the “S&L Department”) for the Affiliate Merger
Transaction contemplated therein. Furthermore, the Purchaser and Seller shall
have obtained (or caused OSBOT to obtain, as applicable) the approval of the
S&L Department for OSBOT to relocate its head office or domicile to a
location in the city limits of Dallas, Texas, designated by the Purchaser and
for the establishment of a branch of OSBOT at the former main office location.
The Seller shall have caused OSB to obtain the approval of the S&L
Department for the establishment of branches of OSB at the former offices of
OSBOT. The Related Transactions shall have been consummated prior to the
Closing of the transactions contemplated by this Agreement.

 

Section 2.05           No Litigation. No action shall
have been taken, and no statute, rule, regulation or order shall have been
promulgated, enacted, entered, enforced or deemed applicable to this Agreement
or the transactions contemplated hereby by any governmental authority or by any
court, including the entry of a preliminary or permanent injunction, that would
(a) make this Agreement or the transactions contemplated hereby illegal,
invalid or unenforceable, (b) require the divestiture of a material
portion of the assets of the Purchaser or OSBOT, except as contemplated by the
Related Transactions, (c) impose material limits in the ability of any
party to this Agreement to consummate the Agreement or the transactions
contemplated hereby, or (d) if this Agreement or the transactions
contemplated hereby are consummated, subject the Purchaser or any officer,
director, shareholder or employee of the Purchaser to criminal or civil
liability. No action or proceeding before any court or governmental authority
shall be threatened, instituted or pending that would reasonably be expected to
result in any of the consequences referred to in clauses (a) through (d) above.

 

Section 2.06           Retained Assets. The assets of
OSBOT on the Closing Date, after consummation of the Related Transactions,
shall consist entirely of cash (collectively, “Retained Assets”) in an amount
equal to $3,500,000, which shall include $500,000 in deposits made by the
Purchaser or any of its related entities on or prior to the Closing Date.

 

ARTICLE III.

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
SELLER

 

All
obligations of the Seller under this Agreement are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions, any or all of
which may be waived in whole or in part by the Seller:

 

Section 3.01           Compliance with Representations,
Warranties and Agreements. All representations and warranties made by the
Purchaser in this Agreement shall have been true and correct when made and
shall be true and correct in all material respects as of the Closing with the
same force and effect as if such representations and warranties were made at
and as of the

 

4

 

Closing.
The Purchaser shall have performed or complied in all material respects with
all agreements, terms, covenants and conditions required by this Agreement to
be performed or complied with by the Purchaser prior to or at the Closing.

 

Section 3.02           Proceedings and Documents.
All actions, proceedings, instruments and documents required to effectuate this
Agreement or incidental hereto shall be satisfactory in substance and form to
the Seller, and the Seller shall have received all such counterpart originals
or certified or other copies of such documents as they may reasonably request,
including certified copies of all proceedings authorizing this Agreement and
the transactions contemplated hereby.

 

Section 3.03           Governmental and Regulatory Approvals.
The Purchaser and Seller shall have obtained all governmental and regulatory
approvals and consents necessary for the consummation of the transactions
described in this Agreement on terms and conditions satisfactory to the Seller.
Such approvals include, without limitation, the approval of the Federal Reserve
for the Purchaser to acquire control of OSBOT and for OSBOT to move its
domicile to Dallas, Texas and to engage in the business of banking at such
location and any other location in Texas thereafter.

 

Section 3.04           Closing of the Related Transactions.
OSB and OSBOT shall have executed the Affiliate Merger Agreement substantially
in the form attached hereto as Exhibit A
and shall have obtained the
approval of the Texas Savings and Loan Department (the “S&L Department”)
for the Affiliate Merger Transaction contemplated therein. Furthermore, the
Purchaser and Seller shall have obtained (or caused OSBOT to obtain, as
applicable) the approval of the S&L Department for OSBOT to relocate its
head office or domicile to a location in the city limits of Dallas, Texas,
designated by the Purchaser and for the establishment of a branch of OSBOT at
the former main office location. The Seller shall have caused OSB to obtain the
approval of the S&L Department for the establishment of branches of OSB at
the former offices of OSBOT. The Related Transactions shall have been
consummated prior to the Closing of the transactions contemplated by the
Agreement.

 

Section 3.05           Deposit. The Purchaser or any
of its related entities shall have deposited $500,000 into a depository account
at OSBOT.

 

ARTICLE IV.

REPRESENTATIONS
AND WARRANTIES OF THE SELLER

 

The
Seller hereby makes the following representations, warranties and covenants to
the Purchaser on behalf of itself and of the Delaware Company as of the date of
this Agreement and as of the Closing Date.

 

Section 4.01         Ownership of the Shares.
The Seller represents and warrants that it is the sole shareholder of the
Delaware Company, and that the Delaware Company is the sole record and
beneficial owner of the Shares. The Delaware Company has good and marketable
title to the Shares and, on the Closing Date, shall have the absolute right to
sell, assign and transfer the Shares free and clear of all liens, security interests,
pledges, encumbrances, buy-sell agreements, preemptive rights or adverse claims
of any kind or character whatsoever. The Seller represents

 

5

 

and
warrants that upon delivery of the Purchase Price for the Shares in accordance
with this Agreement, good and marketable title to such shares shall be
delivered to the Purchaser.

 

Section 4.02           Organization and Qualification of
the Delaware Company and the Seller. The Delaware Company is a Delaware
corporation and a registered bank holding company under the Bank Holding
Company Act of 1956, as amended (the “BHCA”), and is duly organized, validly
existing and in good standing under the laws of the State of Delaware and all
laws, rules and regulations applicable to bank holding companies. The
Seller is a Texas corporation and a registered bank holding company under the
BHCA, and is duly organized, validly existing and in good standing under the
laws of the State of Texas and all laws, rules and regulations applicable
to bank holding companies. Each of the Delaware Company and the Seller has all
requisite corporate power and authority (including all licenses, franchises,
permits and other governmental authorizations as are legally required) to carry
on its business as now being conducted, to own, lease and operate its
properties and assets as now owned, leased or operated and to carry out its
obligations under this Agreement.

 

Section 4.03           Organization and Qualification of
the Bank. OSBOT is a Texas state savings bank, duly organized, validly
existing and in good standing under the laws of the State of Texas and all
laws, rules and regulations applicable to Texas state savings banks. OSBOT
has all requisite corporate power and authority (including all licenses, franchises,
permits and other governmental authorizations as are legally required) to carry
on its business as now being conducted, to own, lease and operate its
properties and assets as now owned, leased or operated.

 

Section 4.04           Authority and Enforceability.
The Seller has full legal capacity and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
This Agreement constitutes the legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws and judicial decisions affecting the rights of creditors generally
and by general principles of equity (whether applied in a proceeding at law or
in equity).

 

Section 4.05           No Breach of Contract. Neither
the execution, delivery or performance of this Agreement, nor the consummation
of the transactions contemplated hereby, nor the fulfillment of the terms
hereof, will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under the Articles or Bylaws of the
Seller or OSBOT or of any material agreement, indenture, instrument, lien,
charge, encumbrance or undertaking to which any of the Seller or OSBOT is a
party or by which any of the properties of the Seller or OSBOT may be bound or
affected, and does not cause any lien, charge or other encumbrance to be
created or imposed upon any such properties by reason thereof.

 

Section 4.06           Bank Capitalization. The
entire authorized capital stock of OSBOT consists solely of 10,000,000 shares
of common stock, par value $1.00 per share, of which 1,261,152 shares are
issued and outstanding. There are no (i) other outstanding equity
securities of any kind or character, (ii) outstanding subscriptions,
options, convertible securities, rights, warrants, calls or other agreements or
commitments of any kind issued or granted by, or binding upon, OSBOT to (A) purchase
or otherwise acquire any security of or equity interest in OSBOT

 

6

 

or
(B) issue any shares of, restricting the transfer of or otherwise relating
to shares of OSBOT’s capital stock. All Shares have been duly authorized,
validly issued and are fully paid and nonassessable, and have not been issued
in violation of the securities laws of the United States or any other
applicable jurisdiction or in violation of the preemptive rights of any person.

 

Section 4.07           Compliance with Applicable Laws.
OSBOT is not in material violation of its Articles or Bylaws, any applicable
law, statute or regulation of any governmental agency, board, bureau or body
relating to the conduct of its business and maintenance and operation of its
properties or in violation or default with respect to any order, writ,
injunction, decree or demand of any court or other governmental or regulatory
authority, any license or regulation of any governmental agency, or in material
default under any indenture, mortgage, lease, agreement or other instrument
under which OSBOT is obligated, which violation or default, respectively, would
result in a continuing liability of OSBOT that will not be assumed by OSB as
part of the Related Transactions.

 

Section 4.08           No Consents Necessary. Except
for such consents and approvals as the Purchaser and the Seller shall attempt
to obtain as described in Section 2.03 and Section 3.03 of this
Agreement, no consent, approval or order of any governmental or administrative
board or body is required for the execution and delivery by the Seller of this
Agreement and the delivery of the certificates representing the Shares.

 

Section 4.09           Filing of Tax Returns. OSBOT
has filed or caused to be filed all tax returns required by law to be filed and
has paid all taxes that OSBOT believes in good faith were due and payable
before they have become delinquent. There is no proposed tax assessment against
OSBOT. The amounts set up as provisions for current or deferred taxes on the
financial statements are sufficient for the payment of all unpaid taxes
(including any interest or penalties) of or on behalf of OSBOT applicable to
the periods covered by the financial statements, and all years and periods
prior thereto. No income tax liability of OSBOT has been asserted by the
Internal Revenue Service or Texas Comptroller of Public Accounts for taxes in
excess of those already paid.

 

Section 4.10           Books and Records. The minute
books, stock certificate books and stock transfer ledgers of OSBOT,
respectively, are complete and correct in all material respects, and there have
been no transactions involving the business of OSBOT that were required to have
been set forth therein and that have not been accurately so set forth.

 

Section 4.11           Regulatory Compliance. All
reports, records and other documents or information required to be filed by
OSBOT with any regulatory authority, including, without limitation, the FDIC,
the S&L Department and the Internal Revenue Service, have been duly and
timely filed, and all information and data contained in such reports, records
or other documents is true, accurate and correct.

 

Section 4.12           Litigation; Lender Liability.
Except as disclosed on Schedule 4.12, there is no action, lawsuit,
claim, proceeding or investigation pending, or threatened against OSBOT or
affecting OSBOT at law or in equity, or by or before any Federal, state, local
or other governmental department, commission, board, agency or instrumentality,
including without

 

7

 

limitation
any actions involving claims against OSBOT or its respective officers or
directors. OSBOT is not in default with respect to any order, writ, injunction
or decree of any federal, state, local or foreign court, department, agency or
instrumentality. Except as disclosed on Schedule 4.12, OSBOT is not presently
engaged in any legal action as a defendant against a claim or counterclaim and
is not presently engaged in any legal action to recover moneys due to it or
damages sustained by it other than as a plaintiff in the normal course of OSBOT’s
business.

 

Section 4.13           Insurance. Set forth on Schedule
4.13 is an accurate and complete list of all policies of insurance,
including fidelity and bond insurance, of the Seller and its subsidiaries.

 

Section 4.14           Undisclosed Liabilities.
Except for those liabilities expressly retained by OSBOT under the Affiliate
Merger Agreement, on the Closing Date, OSBOT will have no other liabilities,
debts or other obligations.

 

Section 4.15           Environmental Compliance.
There are no hazardous materials in, on, underneath or around any real property
owned or leased by OSBOT. Neither the Seller, OSBOT nor OSB has received any
report or notice from any third party indicating or suggesting that there
exists, or may exist, hazardous materials in, on, underneath or around any real
property owned or leased by OSBOT. Neither the Seller, OSBOT nor OSB has any
knowledge of any notice of violations of the city, county, state, federal,
building, zoning, fire, health codes or ordinances, or other governmental
regulations filed or issued against any real property owned or leased by OSBOT.

 

Section 4.16           Employee Benefit Plans. After
the Closing, the Purchaser shall have no liability to any person (including
without limitation, the Department of Labor, Internal Revenue Service and the
Pension Benefit Guaranty Corporation) under or with respect to any Employee
Benefit Plan of OSBOT. For purposes of this Agreement, the term “Employee
Benefit Plans” means (i) all retirement and deferred compensation plans,
including defined benefit, 401(k), savings, thrift, profit sharing, money
purchase pensions, ESOP, Simplified Employee Pension and nonqualified deferred
compensation plans (e.g., deferred bonus plans, elective deferral plans and
supplemental executive plans), (ii) all welfare plans, including life,
health, accident, Accidental Death & Dismemberment, dental, vision,
disability (long and short term), hospitalization, cafeteria, sick pay
policies, unemployment reimbursement other than under state law, and severance
pay, (iii) retiree benefits, including medical benefits, (iv) employment
agreements and independent contractor arrangements, and (v) stock option
plans and (vi) other employee benefits including vacation policies,
personal day and noncash arrangements.

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

Section 5.01
Organization and Qualification of the Purchaser. The Purchaser is a
California state banking association and is duly organized, validly existing
and in good standing under the laws of the State of California and all laws, rules and
regulations applicable to California state banking associations. The Purchaser
has all requisite corporate power and authority (including all licenses,
franchises, permits and other governmental authorizations as are legally
required) to carry on its business as now being conducted, to own, lease and
operate its

 

8

 

properties
and assets as now owned, leased or operated and to carry out its obligations
under this Agreement.

 

Section 5.02                                Authority and Enforceability.
The Purchaser has full legal capacity and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
This Agreement constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws and judicial decisions affecting the rights of
creditors generally and by general principles of equity (whether applied in a
proceeding at law or in equity).

 

Section 5.03                                No Breach of Contract.
Neither the execution, delivery or performance of this Agreement, nor the
consummation of the transactions contemplated hereby, nor the fulfillment of
the terms thereof, will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under the Articles or
Bylaws of the Purchaser or of any material agreement, indenture, instrument,
lien, charge, encumbrance or undertaking to which any of the Purchaser is a
party or by which any of the properties of the Purchaser may be bound or affected,
and does not cause any lien, charge or other encumbrance to be created or
imposed upon any such properties by reason thereof.

 

Section 5.04                                No Consents Necessary.
Except for such consents and approvals as the Purchaser and the Seller shall
attempt to obtain as described in Section 2.03 and Section 3.03 of this Agreement, no consent, approval or order of any governmental or
administrative board or body is required for the execution and
delivery by the Purchaser of this Agreement and the payment of the
Purchase Price for the Shares.

 

ARTICLE VI.

OBLIGATIONS
AND COVENANTS OF THE SELLER

 

The
Seller hereby covenants as set forth in this ARTICLE VI.

 

Section 6.01                                Best Efforts.
The Seller shall promptly file or cause to be filed all necessary applications
to obtain any necessary governmental or regulatory approvals for the transactions described in this Agreement and the Related Transactions,
shall promptly respond to all requests for additional information requested in
connection with such applications, shall
use its best efforts to obtain
such approvals in a timely manner, and shall perform or cause to be satisfied each covenant or condition
specified in this Agreement to be performed or satisfied by the Seller.

 

Section 6.02                                Confidentiality.
The Seller shall hold in confidence all information furnished to the Seller by
the Purchaser, except as disclosure may be necessary to obtain any governmental or regulatory
approvals of the transactions described in this Agreement. In the event this
Agreement is terminated, any and all copies of the books and records of the
Purchaser received by the Seller shall be returned to the Purchaser.

 

9

 

Section 6.03                                Compliance with Transfer
Requirements. On or before the Closing
Date, the Seller shall take all necessary steps and proceedings to enable it to
effect at the Closing a valid, indefeasible sale and transfer of the Shares to
the Purchaser.

 

Section 6.04                                Information for
Applications and Statements. The
Seller shall promptly furnish or cause OSBOT to promptly furnish to the
Purchaser, within fifteen (15) business days after the Purchaser’s request, all
information concerning OSBOT required to be included in any application or
filing to be made by the Purchaser to or filed by the Purchaser with any
governmental body in connection with the transactions contemplated by this
Agreement, or in connection with any related transactions during the pendency
of this Agreement, and the Seller represents and warrants that, to the best of
its knowledge, all information so furnished for such statements and
applications shall be true and correct in all material respects. The Seller
shall cause the Delaware Company, OSBOT and OSB to otherwise fully cooperate
with the Purchaser in the filing of any applications or other documents
necessary to consummate the transactions contemplated by this Agreement.

 

Section 6.05                                Required Acts. Prior to the Closing, the Seller shall, and
shall cause the Delaware Company and OSBOT to, unless otherwise permitted in
writing by the Purchaser:

 

A.                              operate only in the ordinary course of
business and consistent with past banking practices;

 

B.                                maintain in full force and effect all
insurance policies now in effect or renewals thereof and, except as required by
prudent business practices that do not jeopardize insurance coverage, give all
notices and present all claims under all insurance policies in due and timely
fashion;

 

C.                                timely file all reports required to be filed
with governmental authorities and observe and conform to all applicable laws,
rules, regulations, ordinances, codes, orders, licenses and permits, except
those being contested in good faith by appropriate proceedings;

 

D.                               timely file all tax returns required to be
filed by it and promptly pay all taxes, assessments, governmental charges,
duties, penalties, interest and fines that become due and payable, except those
being contested in good faith by appropriate proceedings; and

 

E.                                 withhold from each payment made to each of
its employees the amount of all taxes required to be withheld therefrom and pay
the same to the proper tax receiving authorities.

 

Section 6.06                           Prohibited Acts. Prior to the Closing, the Seller shall not
permit the Delaware Company or OSBOT to, without the prior written consent of
the Purchaser:

 

A.                              change OSBOT’s Articles or Bylaws or its
authorized capital stock;

 

10

 

B.                                issue, reserve for issuance, grant, sell or
authorize the issuance of any shares of OSBOT’s capital stock or other securities
or subscriptions, options, warrants, calls, rights or commitments of any kind
relating to the issuance thereto;

 

C.                                terminate, cancel or surrender any contract,
lease or other agreement or suffer any damage, destruction or loss which, in
any case or in the aggregate, would result in any continuing liability of OSBOT
that will not be assumed by OSB or the Seller as part of the Related
Transactions;

 

D.                               incur any liabilities, which would not be
assumed by OSB under the Affiliate Merger Agreement; or

 

E.                                 engage in any conduct in violation of the
terms and conditions of this Agreement.

 

Section 6.07                                Untrue Representations. The Seller shall promptly notify the
Purchaser in writing if the Seller becomes aware of any fact or condition that
makes untrue, or shows to have been untrue, in any material respect, any
representation or warranty made in this Agreement or that results in the Seller’s
failure to comply with any covenant, condition or agreement contained in this
Agreement.

 

Section 6.08                                Litigation and Claims. The Seller shall promptly notify the
Purchaser in writing of any litigation, or of any claim, controversy or
contingent liability that might be expected to become the subject of
litigation, against OSBOT or affecting any of its properties, and the Seller
shall promptly notify the Purchaser of any legal action, suit or proceeding or
judicial, administrative or governmental investigation, pending or threatened
against OSBOT that questions or might question the validity of this Agreement
or any actions taken or to be taken by the Seller pursuant hereto or seeks to
enjoin or otherwise restrain the transactions contemplated hereby. As soon as
possible after the closing, Seller agrees to take all such reasonable action
and make such necessary filings in the appropriate courts to substitute OSB for
OSBOT and to cause OSBOT to be dismissed with prejudice from any litigation
cited on Schedule 4.12, provided, however, Seller and/or OSB shall have
no obligation to take any action which, in the sole judgement of Seller’s
counsel, would jeopardize Seller’s prospects for prevailing in such litigation.

 

ARTICLE VII.

OBLIGATIONS AND COVENANTS OF THE PURCHASER

 

The
Purchaser hereby covenants as set forth in this ARTICLE VII:

 

Section 7.01                                Best Efforts. The Purchaser shall promptly file or cause
to be filed all necessary applications to obtain any necessary governmental or
regulatory approvals for the transactions described in this Agreement and the
Related Transactions, shall promptly respond to all requests for additional
information requested in connection with such applications, shall use
its best efforts to obtain such approvals in a timely manner, and shall perform
or cause to be satisfied each covenant or condition specified in this Agreement
to be performed or satisfied by

 

11

 

the
Purchaser. In the event that it becomes necessary to obtain the approval of its
shareholders, the Purchaser shall use its best efforts to obtain such approval.

 

Section 7.02                                Confidentiality. The Purchaser shall hold in confidence all
information furnished to the Purchaser by the Seller, OSBOT and OSB, except as
disclosure may be necessary to obtain any governmental or regulatory approvals
of the transactions described in this Agreement. In the event this Agreement is
terminated, any and all copies of the books and records of the Seller, the
Delaware Company, OSBOT, and OSB received by the Purchaser shall be returned to
Seller.

 

Section 7.03                                Information for
Applications and Statements. The Purchaser
shall promptly furnish to the Seller, OSBOT or OSB, within fifteen (15)
business days after the date of any request, all information concerning the
Purchaser required to be included in any application or filing to be made by
the Seller, OSBOT or OSB to or filed by the Seller, OSBOT or OSB with any
governmental body in connection with the transactions contemplated by this
Agreement, or in connection with any related transactions during the pendency
of this Agreement, and the Purchaser represents and warrants that, to the best
of its knowledge, all information so furnished for such statements and
applications shall be true and correct in all material respects. The Purchaser
shall otherwise fully cooperate with the Seller, the Delaware Company, OSBOT and
OSB in the filing of any applications or other documents necessary to
consummate the transactions contemplated by this Agreement. The Purchaser shall
provide copies of the non-public portion of the any regulatory applications to
the Seller.

 

Section 7.04                                Untrue Representations. The Purchaser shall promptly notify the
Seller in writing if the Purchaser becomes aware of any fact or condition that
makes untrue, or shows to have been untrue, in any material respect, any
representation or warranty made in this Agreement or that results in the
Purchaser’s failure to comply with any covenant, condition or agreement
contained in this Agreement.

 

Section 7.05                                Litigation and Claims. The Purchaser shall promptly notify the
Seller of any legal action, suit or proceeding or judicial, administrative or
governmental investigation pending or threatened against the Purchaser that
questions or might question the validity of this Agreement or any actions taken
or to be taken by the Purchaser pursuant hereto or seeks to enjoin or otherwise
restrain the transactions contemplated hereby.

 

Section 7.06                                Non Solicitation. For a period of two (2) years
commencing as of the Closing Date, neither the Purchaser nor the
Purchaser’s direct or indirect subsidiaries, nor the Purchaser’s successors-in-interest
shall knowingly (i) directly solicit the banking business of any persons
who are customers of OSBOT on the Closing Date, including, but not limited to,
deposit products, except for general solicitation of banking business which is
not specifically targeted to persons who are customers of OSBOT on the Closing Date, or (ii) recruit, hire, or attempt to
recruit or hire, directly or by assisting others, any person who is, or within
the preceding six (6) months was, an employee of OSBOT. Notwithstanding
the foregoing, Purchaser may hire any
person who was employed at OSBOT in any capacity other than as an officer, if
and only, if such person voluntary seeks employment with Purchaser and
Purchaser did not directly or indirectly attempt to recruit or hire such
person.

 

12

 

Section 7.07                                Purchaser Deposit.
On or prior to the Closing Date, the Purchaser or any of its related entities
shall deposit $500,000 into a depository account at OSBOT.

 

ARTICLE VIII.

SURVIVAL OF REPRESENTATIONS, WARRANTIES, AGREEMENT

AND OBLIGATIONS; INDEMNIFICATION

 

Section 8.01                                Survival.    The
representations, warranties, obligations, covenants, indemnities and agreements
of the Seller and the Purchaser contained in this Agreement shall survive the
Closing Date and shall continue thereafter for a period of four (4) years,
except for the representations and warranties contained in Section 4.01, Section 4.06,
Section 4.09, Section 4.14 and Section 4.15 and the indemnities
set forth in Section 8.02C (only with respect to employment related
liabilities) which shall survive without limitation.

 

Section 8.02                                Indemnification by the Seller and OSB.
The Seller and OSB agree, jointly and severally, effective as of the Closing
and thereafter, to pay, and to indemnify, save, defend and hold harmless the
Purchaser and each of its officers, directors, shareholders and representatives
and their respective heirs, successors and assigns (collectively, “Insiders”),
from and against, and shall reimburse the Purchaser and its Insiders with
respect to, any and all damages, liabilities, losses, obligations, actions,
suits, disbursements, claims, deficiencies, penalties, interest, expenses,
fines, assessments, charges and costs (including, without limitation,
reasonable attorneys’ and expert witness’ fees, costs of investigation and
court costs) of every kind (collectively, “Losses”), imposed on, incurred by or
asserted against the Purchaser or its Insiders (or any of them) in any way
relating to or arising from or out of:

 

A.                              a material breach of or in any statement,
representation or warranty of the Seller contained in this Agreement, or any
schedule, certificate or other document delivered pursuant hereto or as part of
the transactions contemplated hereby the result of which, either separately or
in the aggregate, causes the Purchaser or its affiliates damage in an amount
equal to or in excess of $10,000;

 

B.                                any legal, quasi-legal or administrative
proceedings of any nature or kind involving the Seller, the Purchaser, Delaware
Company, OSB or OSBOT based on (i) actions or omissions of the Seller, the
Delaware Company, OSB or OSBOT occurring prior to the Closing Date, or (ii) circumstances
relating to the Seller, the Delaware Company, OSB or OSBOT existing at the
Closing Date;

 

C.                                any undisclosed and/or unforeseen liability
of OSBOT (including, without limitation, any liability related to or arising
from or out of any employment relationship of OSBOT) that actually or arguably
existed prior to the Closing, whether or not such liability is assumed by OSB;

 

D.                               a material breach of any covenant of the
Seller or the failure of the Seller to perform any material agreement, covenant
or obligation of the Seller contained in this Agreement or in any other
agreement or document executed pursuant to this Agreement;

 

13

 

E.                                 any liability arising out of the Affiliate
Merger Agreement between OSBOT and OSB; and

 

F.                                 any liability arising out of an “Environmental
Condition.” For purposes of this Agreement, “Environmental Condition” means any
condition with respect to soil, surface waters, groundwaters, land, stream
sediments, surface or subsurface strata, ambient air and any enviromnental
medium comprising or surrounding the real property and tangible personal
property ever owned, leased or used by OSBOT prior to and as of the date of
this Agreement, and immediately prior to effective time of the Stock
Acquisition, whether or not yet discovered or foreseen, which gives rise to any
monetary damage, loss, cost or expense or claim, demand or order for or
imposing financial liability against Purchaser or OSBOT by any third party.

 

Section 8.03                                Indemnification by the Purchaser. The Purchaser hereby agrees, effective as
of the Closing, to pay, and to indemnify, save and hold harmless the Seller and
each of its Insiders and their respective heirs, successors and assigns from
and against, and shall reimburse the Seller and its Insiders with respect to,
any and all Losses imposed on, incurred by or asserted against the Seller or
its Insiders (or any of them) in any way relating to or arising from or out of:

 

A.                              a material breach of or in any statement,
representation or warranty of the Purchaser contained in this Agreement, or any
schedule, certificate or other document delivered pursuant hereto or as part of
the transactions contemplated hereby the result of which, either separately or
in the aggregate, causes the Seller or its affiliates damage in an amount equal
to or in excess of $10,000;

 

B.                                any legal, quasi-legal or administrative
proceedings of any nature or kind involving the Purchaser based on actions or
omissions occurring or circumstances existing before the Closing Date or any
such proceedings involving OSBOT based on actions or omissions occurring or
circumstances existing after the Closing Date; and

 

C.                                a material breach of any covenant of the
Purchaser or the failure of the Purchaser to perform any material agreement,
covenant or obligation of the Purchaser contained in this Agreement or in any
other agreement or document executed pursuant to this Agreement,

 

Section 8.04                                Control of Litigation.

 

A.                              Promptly, or in any event within ten (10) calendar
days (in the case of service of legal process) or within thirty (30) calendar
days (in the case of any other claim), following receipt by any party to be
indemnified under the provisions of this ARTICLE VIII (the “Indemnitee”) of
notice of any action, suit, proceeding, claim, demand or assessment (each, an “Action”)
against the Indemnitee that might give rise to a claim pursuant to Section 8.01,
Section 8.02 or Section 8.03, the Indemnitee shall give written notice thereof to the party or parties obligated to provide
such indemnification under the provisions of this ARTICLE VIII (collectively,
the “Indemnitor”) indicating the nature of such claim, the basis therefor and
the estimated amount thereof. Failure to give any notice provided hereunder
shall in no way be deemed a forfeiture of any

 

14

 

Indemnitee’s
rights to be indemnified hereunder; provided, however, if the Indemnitor shall
have been prejudiced in any material respect by such failure so to notify the
Indemnitor, the Indemnitor shall have the right to set off against any amounts
payable or that become payable by the Indemnitor under this Agreement the
amount by which the Indemnitor has been damaged as a result of the failure so
to notify the Indemnitor. A claim for indemnity may, at the option of the Indemnitee, be asserted as soon as any claim
has been asserted by a third party in writing, regardless of whether actual
harm has been suffered or out-of-pocket expenses incurred.

 

B.                                At any time after the Indemnitee gives notice
to the Indemnitor of a claim being made against the Indemnitee for which a
claim for indemnity is being asserted, to the extent that such claim is not
being defended by any third party under the terms of any applicable insurance
policy or policies, the Indemnitee shall permit the Indemnitor, at the option
and expense of the Indemnitor, to assume the complete defense of such Action
with full authority to conduct such defense and to settle or otherwise dispose
of the same (except as hereinafter provided), and the Indemnitee will
reasonably cooperate in such defense. In order to assume such defense,
Indemnitor must notify Indemnitee in writing of its election to do so within
ten (10) calendar days following receipt of notice of the claim from
Indemnitee; in the event that Indemnitor does not so notify Indemnitee within
such ten (10) calendar day period, Indemnitor shall be deemed to have
elected not to assume such defense. After notice to the Indemnitee of the
Indemnitor’s election to assume the defense of such Action as provided above,
the Indemnitor shall be liable to the Indemnitee for such legal or other
expenses subsequently incurred at the request of the Indemnitor by the
Indemnitee in connection with the defense thereof.

 

C.                                The Indemnitor will not, in defense of any
such Action, except with the consent of the Indemnitee, consent to the entry of
any judgment or enter into any settlement that does not include, as an
unconditional term thereof, the release by claimant or plaintiff of Indemnitee
from all claims and/or liability in respect thereof

 

D.                               As to those Actions with respect to which the
Indemnitor does not elect to assume control of the defense, (i) the
Indemnitee will afford the Indemnitor an opportunity to participate in such
defense, at the Indemnitor’s own cost and expense; (ii) the Indemnitee
will not settle or otherwise dispose of any of the same without the consent of
the Indemnitor, which consent will not be unreasonably withheld; and (iii) the
Indemnitor agrees to reasonably cooperate in such defense.

 

E.                                 The Indemnitor shall make payments to the
Indemnitee, pursuant to the provisions hereof, with respect to Actions of third
parties as follows: with respect to out-of-pocket expenses of the Indemnitee,
on demand as incurred, and, with respect to amounts and fees owed to third
parties, to the extent not paid directly to such third parties by the
Indemnitor, on demand at the time of payment by the Indemnitee to such third
party.

 

F.                                 The liability of the Indemnitor hereunder
shall be subject to the following limitations:

 

15

 

(i)                                Subject to the provisions of 8.04E with
respect to out-of-pocket expenses of Indemnitee, the Indemnitor shall pay
claims hereunder when a claim against the Indemnitee or its Insiders has been
established by a final judgment in litigation with a third party in which the
Indemnitor has assumed the defense, or by a settlement with a third party
consented to in writing by the Indemnitee; payment of other claims as to which
the Indemnitee may contest its liability, or claims not involving third
parties, shall be made when the dispute is settled either by litigation or
consent;

 

(ii)                             payments for amounts due the Indemnitee or
its Insiders hereunder shall be paid by either cash or cashier’s check; and

 

(iii)                          the Indemnitor shall not be liable for any
claims covered by the indemnities under Section 8.01, Section 8.02
and Section 8.03 unless the Indemnitor has been notified of such claims
pursuant to Section 8.04 within a period four (4) years from the
Closing Date; provided, however, this provision shall not apply to claims under
Section 4.01, Section 4.06, Section 4.09, Section 4.14 and Section 4.15
as to which notice may be given at any time.

 

ARTICLE IX.
 TERMINATION
AND ABANDONMENT

 

Section 9.01                                Right of Tennination. This Agreement and the transactions
contemplated hereby may be teiminated and abandoned at any time prior to or at
the Closing as follows, and in no other manner:

 

A.                              By the mutual consent of the Purchaser and
the Seller.

 

B.                                By either the Seller or the Purchaser unless,
prior to December 31, 2004,
(i) the conditions
precedent to such parties’ obligations specified in ARTICLE II and ARTICLE III,
respectively, hereof have been met or waived in writing and (ii) the Closing shall have been consummated.

 

C.                                By either the Purchaser or the Seller if any
of the transactions contemplated by this Agreement are disapproved by any
regulatory authority whose approval is required to consummate such transactions
or if any court of competent jurisdiction or other governmental body shall have
issued an order, decree or ruling or taken any other action restraining,
enjoining, invalidating or otherwise prohibiting the Agreement or the
transactions contemplated hereby and such order, decree, ruling or other action
shall have become final and nonappealable.

 

D.                               By the Purchaser or Seller if either
reasonably determines, in good faith and after consulting with counsel, there
is substantial likelihood that any necessary regulatory approval will not be
obtained or will be obtained only upon a condition or conditions that make it inadvisable to proceed with the transactions contemplated by
this Agreement.

 

16

 

E.                                 By the Purchaser, if the Seller fails to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or in any other agreement contemplated hereby and
such failure shall not have been cured within a period of thirty (30) calendar
days after notice from the Purchaser, or if any of the representations or
warranties of the Seller contained herein or therein shall be inaccurate in any
material respect.

 

F.                                 By the Seller, if the Purchaser fails to
comply in any material respect with any of its covenants or agreements
contained in this Agreement or in any other agreement contemplated hereby and
such failure shall not have been cured within a period of thirty (30) calendar
days after notice from the Seller, or if any of the representations or
warranties of the Purchaser contained herein or therein shall be inaccurate in
any material respect.

 

G.                                By Purchaser, if Purchaser reasonably
determines, in good faith, that an Environmental Condition exists which is
reasonably likely to have a material adverse effect on the Purchaser or OSBOT.

 

Section 9.02                                Notice of Termination. The power of termination provided for by Section 9.01
hereof may be exercised only by a notice given in writing, as provided in Section 10.01
of this Agreement.

 

Section 9.03                                Effect of Termination. Without limiting any other relief to which
either party hereto may be entitled for breach of this Agreement, in the event
of the termination and abandonment of this Agreement pursuant to the provisions
of Section 9.01 hereof, no party to this Agreement shall have any further
liability or obligation in respect of this Agreement.

 

Section 9.04                                Termination Fee. In the event that (i) this Agreement
is terminated by the Purchaser or the Seller other than as permitted in Section 9.01
(such party referred to herein as the “Terminating Party”), or (ii) either
the Purchaser or the Seller refuses to permit the consummation of the
transactions contemplated by this Agreement within the time periods specified
in Section 1.03 (such party referred to herein as the “Breaching
Party”), then such Terminating Party or Breaching Party, as the case may be,
shall, within three (3) business days following such termination, pay a
termination fee to the other party in the amount of $100,000; provided,
however, that in the event that the Seller is the Terminating Party or the
Breaching Party, as the case may be, the termination fee shall be increased by
the amount of any brokerage fees paid or payable by the Purchaser in connection
with the transactions contemplated by this Agreement, which amount shall not
exceed $20,000.

 

ARTICLE X.

MISCELLANEOUS

 

Section 10.01                          Notices. Any and all payments (other than payments at the
Closing), notices, requests, instructions and other communications required
or permitted to be given under this Agreement after the date hereof by any party hereto to any other party may be delivered
personally or by nationally recognized
overnight courier service or
sent by mail or (except in the case of payments) by telex or facsimile
transmission, at the respective addresses or transmission

 

17

 

numbers
set forth below and shall be effective (a) in the case of personal
delivery, telex or facsimile transmission, when received; (b) in the case
of mail, upon the earlier of actual receipt or three (3) business days
after deposit in the United States Postal Service, first class certified or
registered mail, postage prepaid, return receipt requested; and (c) in the
case of nationally-recognized overnight courier service, one (1) business
day after delivery to such courier service together with all appropriate fees
or charges and instructions for such overnight delivery. The parties may change
their respective addresses and transmission numbers by written notice to all
other parties, sent as provided in this Section 10.01. All communications
must be in writing and addressed as follows:

 

IF
TO THE SELLER:

 

Mr. Darby
Byrd

President

OSB
Financial Services, Inc.

812 North 16th Street

Orange,
Texas 77631

Telecopy:
(409) 988-7759

 

IF
TO THE PURCHASER:

 

Mr. Brian
Cho

Wilshire
State Bank

3200
Wilshire Boulevard

Los
Angeles, California 90010-1302

Telecopy: (213) 427-6584

 

Section 10.02                          Entire Agreement. This Agreement is part of a series of
integrated transactions between the parties hereto. This Agreement together
with the other documents executed by the parties in connection with the Related
Transactions shall constitute the entire agreement between the parties hereto
with respect to the transactions contemplated hereby. This Agreement may be
amended, modified or supplemented only by an instrument in writing executed by
the party against which enforcement of the amendment, modification or
supplement is sought

 

Section 10.03                          GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS (INCLUDING THOSE
LAWS RELATING TO CHOICE OF LAW) APPLYING TO CONTRACTS ENTERED INTO AND TO BE
PERFORMED WITHIN THE STATE OF TEXAS, WITHOUT REGARD FOR THE PROVISIONS THEREOF
REGARDING CHOICE OF LAW.

 

Section 10.04                     Severability. In the event that any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws, then (a) such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were not a part hereof; (b) the remaining
provisions of this Agreement shall remain in full force and effect and shall
not be affected by such illegal, invalid or

 

18

 

unenforceable
provision or by its severance from this Agreement; and (c) there shall be
added automatically as a part of this Agreement a provision as similar in terns
to such illegal, invalid or unenforceable provision as may be possible and
still be legal, valid and enforceable.

 

Section 10.05         Attorneys’ Fees and Costs. In
the event attorneys’ fees or other costs are incurred to secure performance of
any of the obligations herein provided for, or to establish damages for the
breach thereof, or to obtain any other appropriate relief, whether by way of
prosecution or defense, the prevailing party shall be entitled to recover
reasonable attorneys’ fees and costs incurred therein.

 

Section 10.06         Specific Performance. Each of the parties hereto acknowledges that the
other parties would be irreparably damaged and would not have an adequate
remedy at law for money damages in the event that any of the covenants contained in this Agreement were not performed in accordance with its
terms or otherwise were materially breached. Each of the parties
hereto therefore agrees that, without the necessity of proving actual damages
or posting bond or other security, the other party shall be entitled to
temporary or permanent injunction or injunctions to prevent breaches of such
performance and to specific enforcement of such covenants in addition to any
other remedy to which they may be entitled, at law or in equity.

 

Section 10.07         Multiple Counterparts. For the convenience of the parties hereto, this Agreement may be executed in multiple counterparts, each of which shall be deemed an original,
and all counterparts hereof so executed by the parties hereto, whether or not
such counterpart shall bear the execution of each of the parties hereto, shall
be deemed to be, and shall be construed as, one and the same Agreement. A
telecopy or facsimile transmission of a signed counterpart of this Agreement
shall be sufficient to bind the party or parties whose signature(s) appear
thereon.

 

Section 10.08         Rules of Construction. The descriptive headings in this Agreement
are inserted for convenience of reference only and are not intended to be part of or to affect the
meaning or interpretation of this Agreement. Each use herein of the
masculine, neuter or feminine gender shall be deemed to include the other genders. Each use herein of the plural shall include the singular and
vice versa, in each case as the context requires or as it is otherwise
appropriate. The word “or” is used in the inclusive sense.

 

Section 10.09         Commissions. The Seller and the
Purchaser agree and represent to each other that there are no commissions due
to any broker or any other person relating to the
transactions that are the subject
of this Agreement, and each
party hereto agrees to indemnify and hold harmless the other parties hereto
from any commission due as a result of its actions with respect to this
transaction.

 

Section 10.10         Binding Agreement; No Assignment. This Agreement shall be binding upon and inure to the benefit of each party hereto, its successors and assigns. No party to this
Agreement shall assign this
Agreement, by operation of law
or otherwise, in whole or in part, without the prior written consent of the other parties, provided, that
the Purchaser may assign its rights
under this Agreement to an affiliate or subsidiary.

 

19

 

Section 10.11         Time Is Of The Essence.
With regard to all dates and time periods set forth or referred to in the
Agreement, time is of the essence.

 

Section 10.12         Publicity. Prior to Closing, the
Seller and the Purchaser agree to communicate with each other and cooperate
with each other prior to any public disclosure of this transaction. The
Purchaser and the Seller agree-
that no public release or announcement concerning the twins of the transactions
contemplated by this Agreement shall be issued by any party without the prior consent of the other parties, except as such release or announcement may be
required by law or any agreement to which any party is subject, in
which case the party required to make the release or announcement
shall allow the other parties reasonable time to comment on such release
announcement in advance of such issuance.

 

[SIGNATURE PAGE FOLLOWS]

 

20

 

IN WITNESS WHEREOF, the Purchaser, the Seller, the
Delaware Company, and OSB have caused this Agreement to be executed as of the
date first above written.

 

	
  WILSHIRE STATE BANK,

  
	
  a
  California state banking association

  
	
   

  
	
   

  
	
  /s/ Brian
  Cho

  	
   

  
	
  Brian
  Cho,

  
	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  
	
   

  
	
  OSB FINANCIAL SERVICES, INC.,

  
	
  a
  Texas corporation

  
	
   

  
	
   

  
	
  /s/
  Darby Byrd

  	
   

  
	
  Darby
  Byrd, 

  
	
  President

  
	
   

  
	
   

  
	
  JOINED
  BY:

  
	
   

  
	
  OSB DELAWARE FINANCIAL

  
	
  SERVICES, INC., a Delaware corporation

  
	
   

  
	
   

  
	
  /s/
  Darby Byrd

  	
   

  
	
  Darby
  Byrd, 

  
	
  President

  
	
   

  
	
   

  
	
  ORANGE SAVINGS BANK, SSB, a Texas

  
	
  state
  savings bank

  
	
   

  
	
   

  
	
  /s/
  Darby Byrd

  	
   

  
	
  Darby
  Byrd,

  
	
  President
  and Chief Executive Officer

  

 

21

 

EXHIBIT A

 

AFFILIATE MERGER AGREEMENT

 

 

AGREEMENT AND PLAN OF MERGER

 

THIS AGREEMENT AND PLAN OF MERGER (this “Merger Agreement”), is made as
of the      day of August 2004 by and
between Orange Savings Bank, SSB, a Texas state savings bank located in Orange,
Texas (“OSB”), and Orange Savings Bank of Texas, a Texas state savings bank
located in Mauriceville, Texas (“OSBOT”).

 

W I T N E S S E T H:

 

A.            OSB is a Texas state savings bank duly organized and
existing under the laws of the State of Texas, having its principal office in
the City of Orange, County of Orange, State of Texas, with authorized capital
stock consisting of 25,000 shares of common stock, par value $10.00 per share
(the “OSB Stock”), all of which are issued and outstanding.

 

B.            OSBOT is a Texas state savings bank, duly organized and
existing under the laws of the Texas, having its principal office in the City
of Mauriceville, County of Orange, State of Texas, with authorized capital
stock consisting of 10,000,000 shares of common stock, par value $1.00 per
share (the “OSBOT Stock”), of which 1,261,152 shares are issued and
outstanding;

 

C.            A majority of the Boards of Directors of each of OSB and
OSBOT, pursuant to the authority given by and in accordance with the provisions
of Section 92.351 of the Texas Finance Code (“Section 92.351”), have
approved this Merger Agreement pursuant to which OSB and OSBOT shall be merged
(the “Merger”) and have authorized the execution hereof; and

 

D.            As and when required by the provisions of this Merger
Agreement, all such action as may be necessary or appropriate shall be taken by
OSB and OSBOT in order to consummate the Merger.

 

NOW, THEREFORE, in consideration of the premises, OSB and OSBOT hereby
agree that OSB and OSBOT shall be merged on the following terms and conditions:

 

1.             Merger of OSB and OSBOT. At the Effective Time (as defined in Section 12
of this Merger Agreement), OSB and OSBOT shall be merged pursuant to the
provisions of Section 92.351.

 

2.             Effects of the Merger. At the Effective Time, both OSBOT and OSB
shall survive the Merger. At the Effective Time, all rights, title and
interests to all real estate and other property owned by OSB and OSBOT, other
than $3,500,000 in cash, which amount shall include $500,000 in deposits (the “Deposit”)
made by Wilshire Bancorp, Inc., a California corporation, or any its related
entities, and the charter, articles of association, bylaws and corporate
records of OSBOT (collectively, the “Retained Assets”), shall be allocated to
and vested in OSB without reversion or impairment, without further act or deed,
and without any transfer or assignment having occurred, but subject to any
existing liens or encumbrances thereon. At the Effective Time, OSBOT shall
retain solely the right, title and interests to the Retained Assets, with all
other real estate and other property being allocated to and vested in OSB at
the Effective Time. At the Effective Time, all liabilities and obligations of
OSBOT (other than the Deposit) shall be allocated to OSB, and OSB shall be the
sole obligor therefor and

 

1

 

no
other party to the Merger shall be liable therefor. At the Effective Time, OSB
shall be obligated for the payment of the fair value of any shareholder of
OSBOT or OSB who has complied with Article Five of the Texas Business
Corporation Act for the recovery of the fair value of his shares.

 

3.             Title of Banks. The title of OSB will not change
as a result of the Merger. The title of OSBOT will not change as a result of
the Merger.

 

4.             Locations. At the Effective Time, (i) the
existing principal office of OSB located at 812 North 16th Street, Orange, Texas, shall
remain the principal office of OSB following the Merger, (ii) the existing
principal office of OSBOT shall be relocated to 12300 Ford Road, Suite 348,
Dallas, Texas 75234, (iii) the branches of OSB existing immediately prior
to the Merger shall remain branches of OSB after consummation of the Merger,
and (iv) the former location of the principal office and all of the
branches of OSBOT existing immediately prior to the Merger will become branch
offices of OSB.

 

5.             Articles of Association and Bylaws. The
respective Articles of Association and Bylaws of OSBOT and OSB will not change
as a result of the Merger.

 

6.             Directors and Officers. The officers and
directors of OSBOT and OSB shall remain as the officers and directors for their
respective entities following the Merger.

 

7.             Conversion of OSB Stock and OSBOT Stock. At the
Effective Time, all shares of OSBOT Stock outstanding at the Effective Time
shall remain outstanding and held by the holder thereof as of the Effective
Time. At the Effective Time, all shares of OSB Stock outstanding at the
Effective Time shall remain outstanding and held by the holder thereof as of
the Effective Time.

 

8.             Shareholder Approval. This Merger Agreement shall
be submitted for approval to the sole shareholder of OSB and to the sole
shareholder of OSBOT by written consent. Upon approval by the sole shareholder
of OSB and the sole shareholder of OSBOT, this Merger Agreement shall be made
effective as soon as practicable thereafter in the manner provided in Section 12
hereof.

 

9.             Conditions to Consummation of the Merger. All
obligations of the parties under this Merger Agreement are subject to the
receipt of all necessary regulatory approvals prior to the Effective Time.

 

10.           Termination. This Merger Agreement may be
terminated and abandoned at any time prior to the Effective Time, whether
before or after action thereon by the shareholder of OSB and OSBOT.

 

11.           Waiver, Amendment and Modification. Any of the
terms or conditions of this Merger Agreement may be waived at any time, whether
before or after action thereon by the shareholder of OSB or OSBOT, by the party
that is entitled to the benefits thereof. This Merger Agreement may be modified
or amended at any time, whether before or after action thereon by

 

2

 

the
shareholder of OSB or OSBOT, by action of both OSB and OSBOT. Any waiver,
modification or amendment of this Merger Agreement shall be in writing.

 

12.           Effective
Time. Subject to the terms and conditions specified in this Merger
Agreement and upon satisfaction of all requirements of law, the Merger shall
become effective at the opening of business on the date specified in the
certificate of merger to be issued by the Texas Savings and Loan Department,
such time being herein called the “Effective Time.”

 

13.           Multiple
Counterparts. For the convenience of the parties hereto, this Merger
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all counterparts hereof so executed by the parties
hereto, whether or not such counterpart shall bear the execution of each of the
parties hereto, shall be deemed to be, and shall be construed as, one and the
same Merger Agreement. A telecopy or facsimile transmission of a signed
counterpart of this Merger Agreement shall be sufficient to bind the party or
parties whose signature(s) appear thereon.

 

14.           Governing
Law. THIS MERGER AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

 

15.           Further
Assurances. Each party hereto agrees from time to time, as and when
requested by the other party hereto, or by its successors or assigns, to
execute and deliver, or cause to be executed and delivered, all such deeds and
instruments and to take or cause to be taken such further or other acts, either
before or after the Effective Time, as may be deemed necessary or desirable in
order to vest in and confirm to OSBOT title to and possession of any assets of
OSB acquired or to be acquired by reason of or as a result of the Merger and
otherwise to carry out the intent and purposes hereof, and the officers and
directors of the parties hereto are fully authorized in the name of their
respective corporate names to take any and all such actions.

 

16.           Assignment.
This Merger Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but no party to
this Merger Agreement shall assign this Merger Agreement, by operation of law
or otherwise, in whole or in part, without the prior written consent of the
other parties. Any assignment made or attempted in violation of this Section 16
shall be void and of no effect.

 

17.           Severability.
In the event that any provision of this Merger Agreement is held to be illegal,
invalid or unenforceable under present or future laws, then (a) such
provision shall be fully severable and this Merger Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable provision were not a
part hereof; (b) the remaining provisions of this Merger Agreement shall
remain in full force and effect and shall not be affected by such illegal,
invalid or unenforceable provision or by its severance from this Merger
Agreement; and (c) there shall be added automatically as a part of this
Merger Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and still be legal, valid and
enforceable.

 

18.           Specific
Performance. Each of the parties hereto acknowledges that the other parties
would be irreparably damaged and would not have an adequate remedy at law for
money

 

3

 

damages
in the event that any of the covenants contained in this Merger Agreement were
not performed in accordance with its terms or otherwise were materially
breached. Each of the parties hereto therefore agrees that, without the
necessity of proving actual damages or posting bond or other security, the
other party shall be entitled to temporary and/or permanent injunction or
injunctions to prevent breaches of such performance and to specific enforcement
of such covenants in addition to any other remedy to which they may be
entitled, at law or in equity.

 

19.           Rules of Construction. Descriptive headings as
to the contents of particular sections are for convenience only and shall not
control or affect the meaning, construction or interpretation of any provision
of this Merger Agreement. Each use herein of the masculine, neuter or feminine
gender shall be deemed to include the other genders. Each use herein of the
plural shall include the singular and vice versa, in each case as the context
requires or as it is otherwise appropriate.

 

20.           Articles, Sections, Exhibits and Schedules. All
articles and sections referred to herein are articles and sections,
respectively, of this Merger Agreement and all exhibits referred to herein are
exhibits attached to this Merger Agreement. Any and all schedules, exhibits,
annexes, statements, reports, certificates or other documents or instruments
referred to herein or attached hereto are and shall be incorporated herein by
reference hereto as though fully set forth herein verbatim.

 

21.           Binding Effect. All of the terms, covenants,
representations, warranties and conditions of this Merger Agreement shall be
binding upon, and inure to the benefit of and be enforceable by, the parties
hereto and their respective successors, representatives and permitted assigns.
Nothing expressed or referred to herein is intended or shall be construed to
give any person other than the parties hereto any legal or equitable right,
remedy or claim under or in respect of this Merger Agreement, or any provision
herein contained, it being the intention of the parties hereto that this Merger
Agreement, the assumption of obligations and statements of responsibilities
hereunder, and all other conditions and provisions hereof are for the sole
benefit of the parties to this Merger Agreement and for the benefit of no other
person. Nothing in this Merger Agreement shall act to relieve or discharge the
obligation or liability of any third party to any party to this Merger
Agreement, nor shall any provision give any third party any right of
subrogation or action over or against any party to this Merger Agreement.

 

4

 

IN WITNESS WHEREOF, OSB and OSBOT have caused
this Merger Agreement to be executed by their duly authorized officers as of
the date first written above.

 

 

	
   

  	
  ORANGE SAVINGS BANK, SSB

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Darby Byrd, President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ORANGE SAVINGS BANK OF TEXAS, SSB

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Darby Byrd, Chief Executive Officer

  

 

5

 

SCHEDULE 4.12

 

LITIGATION

 

None

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