Document:

Exhibit 4.2

 

 

 

 

AMENDED AND RESTATED DECLARATION

OF TRUST

 

by and among

 

WILMINGTON TRUST COMPANY,

as Delaware Trustee,

 

WILMINGTON TRUST COMPANY,

as Institutional Trustee,

 

COAST BANCORP,

as Sponsor,

 

and

 

JACK WAUCHOPE, LEAH PAULY and KARAN POHL,

as Administrators,

 

Dated as of September 20, 2007

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I INTERPRETATION AND DEFINITIONS

  	
  1

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II ORGANIZATION

  	
  8

  
	
  Section 2.1.

  	
  Name

  	
  8

  
	
  Section 2.2.

  	
  Office

  	
  8

  
	
  Section 2.3.

  	
  Purpose

  	
  8

  
	
  Section 2.4.

  	
  Authority

  	
  8

  
	
  Section 2.5.

  	
  Title to Property of the Trust

  	
  8

  
	
  Section 2.6.

  	
  Powers and Duties of the Trustees and the
  Administrators

  	
  8

  
	
  Section 2.7.

  	
  Prohibition of Actions by the Trust and the
  Institutional Trustee

  	
  12

  
	
  Section 2.8.

  	
  Powers and Duties of the Institutional Trustee

  	
  12

  
	
  Section 2.9.

  	
  Certain Duties and Responsibilities of the Trustees
  and Administrators

  	
  14

  
	
  Section 2.10.

  	
  Certain Rights of Institutional Trustee

  	
  15

  
	
  Section 2.11.

  	
  Delaware Trustee

  	
  17

  
	
  Section 2.12.

  	
  Execution of Documents

  	
  17

  
	
  Section 2.13.

  	
  Not Responsible for Recitals or Issuance of
  Securities

  	
  17

  
	
  Section 2.14.

  	
  Duration of Trust

  	
  17

  
	
  Section 2.15.

  	
  Mergers

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE III SPONSOR

  	
  19

  
	
  Section 3.1.

  	
  Sponsor’s Purchase of Common Securities

  	
  19

  
	
  Section 3.2.

  	
  Responsibilities of the Sponsor

  	
  19

  
	
  Section 3.3.

  	
  Expenses

  	
  19

  
	
  Section 3.4.

  	
  Right to Proceed

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV INSTITUTIONAL TRUSTEE AND
  ADMINISTRATORS

  	
  20

  
	
  Section 4.1.

  	
  Number of Trustees

  	
  20

  
	
  Section 4.2.

  	
  Delaware Trustee; Eligibility

  	
  20

  
	
  Section 4.3.

  	
  Institutional Trustee; Eligibility

  	
  20

  
	
  Section 4.4.

  	
  Administrators

  	
  21

  
	
  Section 4.5.

  	
  Appointment, Removal and Resignation of Trustees and
  Administrators

  	
  21

  
	
  Section 4.6.

  	
  Vacancies Among Trustees

  	
  23

  
	
  Section 4.7.

  	
  Effect of Vacancies

  	
  23

  
	
  Section 4.8.

  	
  Meetings of the Trustees and the Administrators

  	
  23

  
	
  Section 4.9.

  	
  Delegation of Power

  	
  23

  
	
  Section 4.10.

  	
  Conversion, Consolidation or Succession to Business

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE V DISTRIBUTIONS

  	
  24

  
	
  Section 5.1.

  	
  Distributions

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI ISSUANCE OF SECURITIES

  	
  24

  
	
  Section 6.1.

  	
  General Provisions Regarding Securities

  	
  24

  
	
  Section 6.2.

  	
  Paying Agent, Transfer Agent and Registrar

  	
  25

  
	
  Section 6.3.

  	
  Form and Dating

  	
  25

  
	
  Section 6.4.

  	
  Mutilated, Destroyed, Lost or Stolen Certificates

  	
  25

  
	
  Section 6.5.

  	
  Temporary Securities

  	
  26

  

 

i

 

	
  Section 6.6.

  	
  Cancellation

  	
  26

  
	
  Section 6.7.

  	
  Rights of Holders; Waivers of Past Defaults

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII DISSOLUTION AND TERMINATION OF
  TRUST

  	
  28

  
	
  Section 7.1.

  	
  Dissolution and Termination of Trust

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TRANSFER OF INTERESTS

  	
  28

  
	
  Section 8.1.

  	
  General

  	
  28

  
	
  Section 8.2.

  	
  Transfer Procedures and Restrictions

  	
  29

  
	
  Section 8.3.

  	
  Deemed Security Holders

  	
  31

  
	
   

  	
   

  	
   

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

  	
  31

  
	
  Section 9.1.

  	
  Liability

  	
  31

  
	
  Section 9.2.

  	
  Exculpation

  	
  32

  
	
  Section 9.3.

  	
  Fiduciary Duty

  	
  32

  
	
  Section 9.4.

  	
  Indemnification

  	
  33

  
	
  Section 9.5.

  	
  Outside Businesses

  	
  35

  
	
  Section 9.6.

  	
  Compensation; Fee

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE X ACCOUNTING

  	
  35

  
	
  Section 10.1.

  	
  Fiscal Year

  	
  35

  
	
  Section 10.2.

  	
  Certain Accounting Matters

  	
  35

  
	
  Section 10.3.

  	
  Banking

  	
  36

  
	
  Section 10.4.

  	
  Withholding

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI AMENDMENTS AND MEETINGS

  	
  36

  
	
  Section 11.1.

  	
  Amendments

  	
  36

  
	
  Section 11.2.

  	
  Meetings of the Holders of Securities; Action by
  Written Consent

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL
  TRUSTEE AND THE DELAWARE TRUSTEE

  	
  39

  
	
  Section 12.1.

  	
  Representations and Warranties of Institutional
  Trustee

  	
  39

  
	
  Section 12.2.

  	
  Representations of the Delaware Trustee

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
  40

  
	
  Section 13.1.

  	
  Notices

  	
  40

  
	
  Section 13.2.

  	
  Governing Law

  	
  41

  
	
  Section 13.3.

  	
  Intention of the Parties

  	
  41

  
	
  Section 13.4.

  	
  Headings

  	
  42

  
	
  Section 13.5.

  	
  Successors and Assigns

  	
  42

  
	
  Section 13.6.

  	
  Partial Enforceability

  	
  42

  
	
  Section 13.7.

  	
  Counterparts

  	
  42

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I

  	
  Terms of Securities

  	
   

  
	
  Exhibit A-1

  	
  Form of Capital Security Certificate

  	
   

  
	
  Exhibit A-2

  	
  Form of Common Security Certificate

  	
   

  
	
  Exhibit B

  	
  Specimen of Initial Debenture

  	
   

  
	
  Exhibit C

  	
  Placement Agreement

  	
   

  

 

ii

 

AMENDED AND RESTATED

 

DECLARATION OF TRUST

 

OF

 

COAST BANCORP STATUTORY TRUST II

 

September 20, 2007

 

AMENDED AND RESTATED DECLARATION OF TRUST (“Declaration”) dated
and effective as of September 20, 2007, by the Trustees (as defined
herein), the Administrators (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided beneficial
interests in the Trust (as defined herein) to be issued pursuant to this
Declaration;

 

WHEREAS, the Trustees, the Administrators and the Sponsor established
Coast Bancorp Statutory Trust II (the “Trust”), a statutory trust
under the Statutory Trust Act (as defined herein) pursuant to a Declaration of
Trust dated as of August 23, 2007 (the “Original Declaration”), and
a Certificate of Trust filed with the Secretary of State of the State of
Delaware on August 23, 2007, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in certain debentures of the
Debenture Issuer (as defined herein);

 

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

 

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

 

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

 

ARTICLE I

INTERPRETATION AND DEFINITIONS

 

Section 1.1.                                Definitions.  Unless the context otherwise requires:

 

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

 

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

 

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

 

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

 

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

 

1

 

“Acceleration Event of Default” has the meaning set forth in the
Indenture.

 

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

 

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

 

“Administrators” means each of Jack Wauchope, Leah Pauly and
Karan Pohl, solely in such Person’s capacity as Administrator of the Trust
created and continued hereunder and not in such Person’s individual capacity,
or such Administrator’s successor in interest in such capacity, or any
successor appointed as herein provided.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Certificate” means any certificate evidencing Securities.

 

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

 

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

 

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

 

2

 

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

 

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

 

“Comparable Treasury Issue” has the meaning set forth in
paragraph 4(a) of Annex I.

 

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

 

“Corporate Trust Office” means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-1600, Attn: Corporate Trust
Administration.

 

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

 

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

 

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

 

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

 

“Debenture Trustee” means Wilmington Trust Company, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.

 

“Debentures” means the Fixed/Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2037 to be issued by the Debenture Issuer
under the Indenture.

 

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

 

“Delaware Trustee” has the meaning set forth in Section 4.2.

 

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

 

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

 

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

 

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

 

“Distribution Period” means (i) with respect to the
Distribution paid on the first Distribution Payment Date, the period beginning
on (and including) the date of original issuance and ending on (but excluding)
the Distribution Payment Date in December 2007 and (ii) thereafter,
with respect to a Distribution paid on each successive Distribution Payment
Date, the period beginning on (and including) the preceding Distribution
Payment Date and ending on (but excluding) such current Distribution Payment
Date.

 

3

 

“Distribution Rate” means, for the Distribution Period beginning
on (and including) the date of original issuance and ending on (but excluding)
the Distribution Payment Date in December 2012, the rate per annum of
6.388%, and for each Distribution Period beginning on or after the Distribution
Payment Date in December 2012, the Coupon Rate for such Distribution
Period.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Fiduciary Indemnified Person” shall mean each of the
Institutional Trustee (including in its individual capacity), the Delaware
Trustee (including in its individual capacity), any Affiliate of the
Institutional Trustee or Delaware Trustee and any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee or Delaware Trustee.

 

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

 

“Fixed Rate Period Remaining Life” has the meaning set forth in
paragraph 4(a) of Annex I.

 

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

 

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

 

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

 

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

 

4

 

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

 

“Institutional Trustee” means the Trustee meeting the
eligibility requirements set forth in Section 4.3.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

“Primary Treasury Dealer” has the meaning set forth in
paragraph 4(a) of Annex I.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Reference Treasury Dealer” has the meaning set forth in
paragraph 4(a) of Annex I.

 

“Reference Treasury Dealer Quotations” has the meaning set forth
in paragraph 4(a) of Annex I.

 

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

 

“Relevant Trustee” has the meaning set forth in Section 4.5(a).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

“Statutory Trust Act” means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. §§ 3801, et seq. as may
be amended from time to time.

 

“Successor Entity” has the meaning set forth in Section 2.15(b).

 

“Successor Delaware Trustee” has the meaning set forth in Section 4.5(e).

 

“Successor Institutional Trustee” has the meaning set forth in Section 4.5(b).

 

“Successor Securities” has the meaning set forth in Section 2.15(b).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Trustee” or “Trustees” means each Person who has signed
this Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.

 

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

 

7

 

ARTICLE II

ORGANIZATION

 

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

 

Section 2.2.                                Office.  The address of the principal office of
the Trust is c/o Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-1600. On at least 10 Business
Days written notice to the Holders of the Securities, the Administrators may
designate another principal office, which shall be in a state of the United
States or in the District of Columbia.

 

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

 

Section 2.4.                                Authority.  Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
in accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and are not intended to be
trustees or fiduciaries with respect to the Trust or the Holders. The
Institutional Trustee shall have the right, but shall not be obligated except
as provided in Section 2.6, to perform those duties assigned to the
Administrators.

 

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

 

Section 2.6.                                Powers
and Duties of the Trustees and the Administrators.

 

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

 

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

 

8

 

(A)                              the
issuance and sale of the Securities;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(I)                                    the
taking of any action incidental to the foregoing as the Institutional Trustee
may from time to time determine is necessary or advisable to give effect to the
terms of this Declaration for the benefit of the Holders (without consideration
of the effect of any such action on any particular Holder);

 

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

 

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

 

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

 

(A)                              the
establishment of the Property Account;

 

(B)                                the
receipt of the Debentures;

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

(J)                                   to
take all action that may be necessary for the preservation and the continuation
of the Trust’s valid existence, rights, franchises and privileges as a
statutory trust under the laws of the State of Delaware.

 

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

 

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

 

(c)                                  In
connection with the issuance and sale of the Capital Securities, the Sponsor
shall have the right and responsibility to assist the Trust with respect to, or
effect on behalf of the Trust, the

 

10

 

following (and any actions taken by the Sponsor in furtherance of the
following prior to the date of this Declaration are hereby ratified and
confirmed in all respects):

 

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

 

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

 

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

 

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

 

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

 

(e)                                  All
expenses incurred by the Administrators or the Trustees pursuant to this Section 2.6
shall be reimbursed by the Sponsor, and the Trustees and the Administrators
shall have no obligations with respect to such expenses (for purposes of
clarification, this Section 2.6(e) does not contemplate the payment
by the Sponsor of acceptance or annual administration fees owing to the
Trustees under this Declaration or the fees and expenses of the Trustees’
counsel in connection with the closing of the transactions contemplated by this
Declaration).

 

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

 

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

 

(h)                                 If
the Institutional Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Declaration and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Institutional Trustee or to such Holder, then and in every such case the
Sponsor, the Institutional Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter

 

11

 

all rights and remedies of the Institutional Trustee and the Holders
shall continue as though no such proceeding had been instituted.

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)                                 possess
any power or otherwise act in such a way as to vary the Trust assets or the
terms of the Securities in 

any way whatsoever other than as expressly provided
herein;

 

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

 

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

 

(viii)                        other than as provided in this
Declaration (including Annex I), (A) direct the time, method and
place of exercising any trust or power conferred upon the Debenture Trustee
with respect to the Debentures, (B) waive any past default that is
waivable under the Indenture, (C) exercise any right to rescind or annul
any declaration that the principal of all the Debentures shall be due and
payable, or (D) consent to any amendment, modification or termination of
the Indenture or the Debentures where such consent shall be required unless the
Trust shall have received a written opinion of counsel to the effect that such
modification will not cause the Trust to cease to be classified as a “grantor
trust” for United States federal income tax purposes.

 

Section 2.8.                                Powers
and Duties of the Institutional Trustee.

 

(a)                                  The
legal title to the Debentures shall be owned by and held of record in the name
of the Institutional Trustee in trust for the benefit of the Trust and the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 4.5.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.

 

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

 

(c)                                  The
Institutional Trustee shall:

 

(i)                                     establish
and maintain a segregated non-interest bearing trust account (the “Property
Account”) in the name of and under the exclusive control of the
Institutional Trustee,

 

12

 

and maintained in the
Institutional Trustee’s trust department, on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of the
Debentures held by the Institutional Trustee, deposit such funds into the
Property Account and make payments, or cause the Paying Agent to make payments,
to the Holders of the Capital Securities and Holders of the Common Securities
from the Property Account in accordance with Section 5.1. Funds in the
Property Account shall be held uninvested until disbursed in accordance with
this Declaration;

 

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

 

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

 

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

 

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

 

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

 

(ii)                                  a
Successor Institutional Trustee has been appointed and has accepted that
appointment in accordance with Section 4.5.

 

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

 

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

 

13

 

Section 2.9.                                Certain
Duties and Responsibilities of the Trustees and Administrators.

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

(b)                                 if
(i) in performing its duties under this Declaration, the Institutional
Trustee is required to decide between alternative courses of action, (ii) in
construing any of the provisions of this Declaration, the Institutional Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein, or (iii) the Institutional Trustee is unsure of the application of
any provision of this Declaration, then, except as to any matter as to which
the Holders of Capital Securities are entitled to vote under the terms of this
Declaration, the Institutional Trustee may deliver a notice to the Sponsor
requesting the Sponsor’s written instructions as to the course of action to be
taken and the Institutional Trustee shall take such action, or refrain from
taking such action, as the Institutional Trustee shall be instructed in
writing, in which event the Institutional Trustee shall have no liability
except for its own negligence or willful misconduct;

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

Section 2.11.                         Delaware
Trustee.  Notwithstanding any
other provision of this Declaration other than Section 4.1, the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of any of the Trustees or
the Administrators described in this Declaration (except as may be required
under the Statutory Trust Act). Except as set forth in Section 4.1, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of § 3807 of the Statutory Trust Act.

 

Section 2.12.                         Execution
of Documents.  Unless otherwise
determined in writing by the Institutional Trustee, and except as otherwise
required by the Statutory Trust Act, the Institutional Trustee, or any one or
more of the Administrators, as the case may be, is authorized to execute on
behalf of the Trust any documents that the Trustees or the Administrators, as
the case may be, have the power and authority to execute pursuant to Section 2.6.

 

Section 2.13.                         Not
Responsible for Recitals or Issuance of Securities.  The recitals contained in this
Declaration and the Securities shall be taken as the statements of the Sponsor,
and the Trustees do not assume any responsibility for their correctness. The
Trustees make no representations as to the value or condition of the property
of the Trust or any part thereof. The Trustees make no representations as to
the validity or sufficiency of this Declaration, the Debentures or the
Securities.

 

Section 2.14.                         Duration
of Trust.  The Trust, unless
earlier dissolved pursuant to the provisions of Article VII hereof, shall
be in existence for 35 years from the Closing Date.

 

Section 2.15.                         Mergers.

 

(a)                                  The
Trust may not consolidate, amalgamate, merge with or into, or be replaced by,
or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other body, except as described in Section 2.15(b) and
(c) and except in connection with the liquidation of the Trust and the
distribution of the Debentures to Holders of Securities pursuant to Section 7.1(a)(iv) of
the Declaration or Section 4 of Annex I.

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ix)                                prior
to such merger, consolidation, amalgamation or replacement, the Institutional
Trustee shall have received an Officers’ Certificate of the Administrators and
an opinion of counsel, each to the effect that all conditions precedent under
this Section 2.15(b) to such transaction have been satisfied.

 

(c)                                  Notwithstanding
Section 2.15(b), the Trust shall not, except with the consent of Holders
of 100% in aggregate liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace it
if such consolidation, amalgamation, merger or replacement would cause the
Trust or

 

18

 

Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.

 

ARTICLE III

SPONSOR

 

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

 

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

 

(a)                                  to
determine the States in which to take appropriate action to qualify the Trust
or to qualify or register for sale all or part of the Capital Securities and to
do any and all such acts, other than actions which must be taken by the Trust,
and advise the Trust of actions it must take, and prepare for execution and
filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States, to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which it was
created; and

 

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

 

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

 

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

 

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

 

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

 

The Sponsor’s obligations under this Section 3.3 shall be for the
benefit of, and shall be enforceable by, any Person to whom such debts,
obligations, costs, expenses and taxes are owed (a

 

19

 

“Creditor”) whether or not such Creditor has
received notice hereof. Any such Creditor may enforce the Sponsor’s obligations
under this Section 3.3 directly against the Sponsor and the Sponsor
irrevocably waives any right or remedy to require that any such Creditor take
any action against the Trust or any other Person before proceeding against the
Sponsor. The Sponsor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this Section 3.3.

 

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

 

ARTICLE IV

INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

 

Section 4.1.                                Number
of Trustees.  The number of
Trustees shall initially be two, and;

 

(a)                                  at
any time before the issuance of any Securities, the Sponsor may, by written
instrument, increase or decrease the number of Trustees; and

 

(b)                                 after
the issuance of any Securities, the number of Trustees may be increased or
decreased by vote of the Holder of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of the Holder of the Common
Securities; provided, however, that there shall be a Delaware
Trustee if required by Section 4.2; and there shall always be one Trustee
who shall be the Institutional Trustee, and such Trustee may also serve as
Delaware Trustee if it meets the applicable requirements, in which case Section 2.11
shall have no application to such entity in its capacity as Institutional Trustee.

 

Section 4.2.                                Delaware
Trustee; Eligibility.

 

(a)                                  If
required by the Statutory Trust Act, one Trustee (the “Delaware Trustee”) shall
be:

 

(i)                                     a
natural person at least 21 years of age who is a resident of the State of
Delaware; or

 

(ii)                                  if
not a natural person, an entity which is organized under the laws of the United
States or any state thereof or the District of Columbia, has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, including § 3807 of the Statutory Trust
Act.

 

(b)                                 The
initial Delaware Trustee shall be Wilmington Trust Company.

 

Section 4.3.                                Institutional
Trustee; Eligibility.

 

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

 

(i)                                     not
be an Affiliate of the Sponsor;

 

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

 

(iii)                               be a banking corporation
or trust company organized and doing business under the laws of the United
States of America or any state thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars ($50,000,000.00), and subject
to supervision or examination by Federal, state, or District of Columbia
authority. If such corporation publishes

 

20

 

reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this Section 4.3(a)(iii),
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.

 

(b)                                 If
at any time the Institutional Trustee shall cease to be eligible to so act
under Section 4.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 4.5.

 

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

 

(d)                                 The
initial Institutional Trustee shall be Wilmington Trust Company.

 

Section 4.4.                                Administrators.  Each Administrator shall be a U.S.
Person, 21 years of age or older and authorized to bind the Sponsor. The
initial Administrators shall be Jack Wauchope, Leah Pauly and Karan Pohl. There
shall at all times be at least one Administrator. Except where a requirement
for action by a specific number of Administrators is expressly set forth in
this Declaration and except with respect to any action the taking of which is
the subject of a meeting of the Administrators, any action required or
permitted to be taken by the Administrators may be taken by, and any power of
the Administrators may be exercised by, or with the consent of, any one such
Administrator.

 

Section 4.5.                                Appointment,
Removal and Resignation of Trustees and Administrators.

 

(a)                                  No
resignation or removal of any Trustee (the “Relevant Trustee”) and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of this Section 4.5.

 

(b)                                 Subject
to Section 4.5(a), a Relevant Trustee may resign at any time by giving
written notice thereof to the Holders of the Securities and by appointing a
successor Relevant Trustee. Upon the resignation of the Institutional Trustee,
the Institutional Trustee shall appoint a successor by requesting from at least
three Persons meeting the eligibility requirements their expenses and charges
to serve as the successor Institutional Trustee on a form provided by the
Administrators, and selecting the Person who agrees to the lowest expense and
charges (the “Successor Institutional Trustee”). If the instrument of
acceptance by the successor Relevant Trustee required by this Section 4.5
shall not have been delivered to the Relevant Trustee within 60 days after the
giving of such notice of resignation or delivery of the instrument of removal,
the Relevant Trustee may petition, at the expense of the Trust, any federal,
state or District of Columbia court of competent jurisdiction for the
appointment of a successor Relevant Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Relevant
Trustee. The Institutional Trustee shall have no liability for the selection of
such successor pursuant to this Section 4.5.

 

(c)                                  Unless
an Event of Default shall have occurred and be continuing, any Trustee may be
removed at any time by an act of the Holders of a Majority in liquidation
amount of the Common Securities. If any Trustee shall be so removed, the
Holders of the Common Securities, by act of the Holders of a Majority in
liquidation amount of the Common Securities delivered to the Relevant Trustee,
shall promptly appoint a successor Relevant Trustee, and such successor Trustee
shall comply with the applicable requirements of this Section 4.5. If an
Event of Default shall have occurred and be continuing, the Institutional
Trustee or the Delaware Trustee, or both of them, may be removed by the act of
the Holders of a Majority in liquidation amount of the Capital Securities,
delivered to the Relevant Trustee

 

21

 

(in its individual capacity and on behalf of the
Trust). If any Trustee shall be so removed, the Holders of Capital Securities,
by act of the Holders of a Majority in liquidation amount of the Capital
Securities then outstanding delivered to the Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees, and such successor Trustee
shall comply with the applicable requirements of this Section 4.5. If no
successor Relevant Trustee shall have been so appointed by the Holders of a
Majority in liquidation amount of the Capital Securities and accepted
appointment in the manner required by this Section 4.5 within 30 days
after delivery of an instrument of removal, the Relevant Trustee or any Holder
who has been a Holder of the Securities for at least six months may, on behalf
of himself and all others similarly situated, petition any federal, state or District
of Columbia court of competent jurisdiction for the appointment of a successor
Relevant Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a successor Relevant Trustee or Trustees.

 

(d)                                 The
Institutional Trustee shall give notice of each resignation and each removal of
a Trustee and each appointment of a successor Trustee to all Holders and to the
Sponsor. Each notice shall include the name of the successor Relevant Trustee
and the address of its Corporate Trust Office if it is the Institutional
Trustee.

 

(e)                                  Notwithstanding
the foregoing or any other provision of this Declaration, in the event a
Delaware Trustee who is a natural person dies or is adjudged by a court to have
become incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by the Institutional Trustee following
the procedures in this Section 4.5 (with the successor being a Person who
satisfies the eligibility requirement for a Delaware Trustee set forth in this
Declaration) (the “Successor Delaware Trustee”).

 

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

 

(g)                                 No
Institutional Trustee or Delaware Trustee shall be liable for the acts or
omissions to act of any Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.

 

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

 

(i)                                     Any
successor Delaware Trustee shall file an amendment to the Certificate of Trust
with the Secretary of State of the State of Delaware identifying the name and
principal place of business of such Delaware Trustee in the State of Delaware.

 

22

 

Section 4.6.                                Vacancies
Among Trustees.  If a Trustee
ceases to hold office for any reason and the number of Trustees is not reduced
pursuant to Section 4.1, a vacancy shall occur. A resolution certifying
the existence of such vacancy by the Trustees or, if there are more than two, a
majority of the Trustees, shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with Section 4.5.

 

Section 4.7.                                Effect
of Vacancies.  The death,
resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to dissolve, terminate or annul the Trust or terminate this Declaration.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled by the appointment of a Trustee in accordance with Section 4.5, the
Institutional Trustee shall have all the powers granted to the Trustees and
shall discharge all the duties imposed upon the Trustees by this Declaration.

 

Section 4.8.                                Meetings
of the Trustees and the Administrators. 
Meetings of the Administrators shall be held from time to time upon
the call of an Administrator. Regular meetings of the Administrators may be
held in person in the United States or by telephone, at a place (if applicable)
and time fixed by resolution of the Administrators. Notice of any in-person
meetings of the Trustees with the Administrators or meetings of the
Administrators shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
48 hours before such meeting. Notice of any telephonic meetings of the
Trustees with the Administrators or meetings of the Administrators or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
24 hours before a meeting. Notices shall contain a brief statement of the
time, place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of a Trustee or an Administrator, as the case may be,
at a meeting shall constitute a waiver of notice of such meeting except where
the Trustee or an Administrator, as the case may be, attends a meeting for the
express purpose of objecting to the transaction of any activity on the grounds
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Trustees or the
Administrators, as the case may be, may be taken at a meeting by vote of a
majority of the Trustees or the Administrators present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Trustees or the Administrators. Meetings of the Trustees and the Administrators
together shall be held from time to time upon the call of any Trustee or an
Administrator.

 

Section 4.9.                                Delegation
of Power.

 

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

 

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

 

Section 4.10.                         Conversion,
Consolidation or Succession to Business. 
Any Person into which the Institutional Trustee or the Delaware
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Institutional Trustee or the Delaware Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Institutional Trustee or the Delaware Trustee shall be the successor of the
Institutional Trustee or the Delaware Trustee hereunder, provided such Person
shall

 

23

 

be otherwise qualified and eligible under this Article and, provided,
further, that such Person shall file an amendment to the Certificate of Trust
with the Secretary of State of the State of Delaware as contemplated in Section 4.5(i).

 

ARTICLE V

DISTRIBUTIONS

 

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

 

ARTICLE VI

ISSUANCE OF SECURITIES

 

Section 6.1.                                General
Provisions Regarding Securities.

 

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

 

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

 

(c)                                  The
consideration received by the Trust for the issuance of the Securities shall
constitute a contribution to the capital of the Trust and shall not constitute
a loan to the Trust.

 

24

 

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

 

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

 

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

 

Section 6.3.                                Form and
Dating.  The Capital Securities
and the Institutional Trustee’s certificate of authentication thereon shall be
substantially in the form of Exhibit A-1, and the Common Securities shall
be substantially in the form of Exhibit A-2, each of which is hereby
incorporated in and expressly made a part of this Declaration. Certificates may
be typed, printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Administrators, as conclusively
evidenced by their execution thereof. The Securities may have letters, numbers,
notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the
Trust is subject if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Sponsor). The Trust at the direction
of the Sponsor shall furnish any such legend not contained in Exhibit A-1
to the Institutional Trustee in writing. Each Capital Security shall be dated
on or before the date of its authentication. The terms and provisions of the
Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the
extent applicable, the Institutional Trustee, the Delaware Trustee, the
Administrators and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby. Capital Securities will be issued only in blocks having a stated
liquidation amount of not less than $100,000.00 and any multiple of $1,000.00
in excess thereof.

 

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

 

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

 

If:

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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ARTICLE VII

DISSOLUTION AND TERMINATION OF TRUST

 

Section 7.1.                                Dissolution
and Termination of Trust.

 

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

 

(i)                                     unless
earlier dissolved, on December 15, 2042, the expiration of the term of the
Trust;

 

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

 

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

 

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

 

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

 

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

 

(vii)                           before the issuance of any
Securities, with the consent of all of the Trustees and the Sponsor.

 

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

 

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

 

ARTICLE VIII

TRANSFER OF INTERESTS

 

Section 8.1.                                General.

 

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

 

28

 

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

 

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

 

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

 

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

 

Section 8.2.                                Transfer
Procedures and Restrictions.

 

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

 

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

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES
LAWS OR ANY OTHER APPLICABLE SECURITIES LAW.

 

29

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE IX

LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS

 

Section 9.1.                                Liability.

 

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

 

31

 

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

 

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

 

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

 

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

 

Section 9.2.                                Exculpation.

 

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

 

(b)                                 An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the Trust and upon such information, opinions, reports or statements
presented to the Trust by any Person as to matters the Indemnified Person reasonably
believes are within such other Person’s professional or expert competence and,
if selected by such Indemnified Person, has been selected by such Indemnified
Person with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders of
Securities might properly be paid.

 

Section 9.3.                                Fiduciary
Duty.

 

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

 

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

 

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

 

32

 

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

 

Section 9.4.                                Indemnification.

 

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

 

(b)                                 The
Sponsor shall indemnify, to the full extent permitted by law, any Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the Trust
to procure a judgment in its favor arising out of or in connection with the
acceptance or administration of this Declaration by reason of the fact that he
is or was an Indemnified Person against expenses (including reasonable
attorneys’ fees and expenses) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust; provided, however, that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such Indemnified Person shall have been adjudged to be liable to the
Trust unless and only to the extent that the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.

 

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

 

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

 

(e)                                  To
the fullest extent permitted by law, expenses (including reasonable attorneys’
fees and expenses) incurred by an Indemnified Person in defending a civil,
criminal, administrative or

 

33

 

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

 

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

 

(g)                                 The
indemnification and advancement of expenses provided by, or granted pursuant
to, the other paragraphs of this Section 9.4 shall not be deemed exclusive
of any other rights to which those seeking indemnification and advancement of
expenses may be entitled under any agreement, vote of stockholders or
disinterested directors of the Sponsor or Capital Security Holders of the Trust
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. All rights to indemnification under
this Section 9.4 shall be deemed to be provided by a contract between the
Sponsor and each Indemnified Person who serves in such capacity at any time
while this Section 9.4 is in effect. Any repeal or modification of this Section 9.4
shall not affect any rights or obligations then existing.

 

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

 

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

 

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

 

34

 

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

 

Section 9.6.                                Compensation;
Fee.  The Sponsor agrees:

 

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

 

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

 

For purposes of clarification, this Section 9.6 does not
contemplate the payment by the Sponsor of acceptance or annual administration
fees owing to the Trustees under this Declaration or the fees and expenses of
the Trustees’ counsel in connection with the closing of the transactions
contemplated by this Declaration.

 

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

 

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

 

ARTICLE X

ACCOUNTING

 

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

 

Section 10.2.                         Certain
Accounting Matters.

 

(a)                                  At
all times during the existence of the Trust, the Administrators shall keep, or
cause to be kept at the principal office of the Trust in the United States, as
defined for purposes of Treasury Regulations section 301.7701-7, full
books of account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust. The books of account shall be
maintained, at the

 

35

 

Sponsor’s expense, in accordance with generally
accepted accounting principles, consistently applied. The books of account and
the records of the Trust shall be examined by and reported upon (either
separately or as part of the Sponsor’s regularly prepared consolidated
financial report) as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrators.

 

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

 

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

 

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

 

Section 10.4.                         Withholding.  The Institutional Trustee or any Paying
Agent and the Administrators shall comply with all withholding requirements
under United States federal, state and local law. The Institutional Trustee or
any Paying Agent shall request, and each Holder shall provide to the
Institutional Trustee or any Paying Agent, such forms or certificates as are necessary
to establish an exemption from withholding with respect to the Holder, and any
representations and forms as shall reasonably be requested by the Institutional
Trustee or any Paying Agent to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrators shall file required
forms with applicable jurisdictions and, unless an exemption from withholding
is properly established by a Holder, shall remit amounts withheld with respect
to the Holder to applicable jurisdictions. To the extent that the Institutional
Trustee or any Paying Agent is required to withhold and pay over any amounts to
any authority with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder. In the event of any claimed overwithholding, Holders
shall be limited to an action against the applicable jurisdiction. If the
amount required to be withheld was not withheld from actual Distributions made,
the Institutional Trustee or any Paying Agent may reduce subsequent
Distributions by the amount of such withholding.

 

ARTICLE XI

AMENDMENTS AND MEETINGS

 

Section 11.1.                         Amendments.

 

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

 

36

 

the Institutional Trustee, or (ii) if the
amendment affects the rights, powers, duties, obligations or immunities of the
Delaware Trustee, by the Delaware Trustee.

 

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

 

(i)                                     the
Institutional Trustee shall have first received

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)                                     cure
any ambiguity;

 

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

 

37

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)                                  each
Holder of a Security may authorize any Person to act for it by proxy on all
matters in which a Holder of Securities is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. No
proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the Holder of the Securities executing it. Except as
otherwise

 

38

 

provided herein, all
matters relating to the giving, voting or validity of proxies shall be governed
by the General Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a Delaware
corporation; each meeting of the Holders of the Securities shall be conducted
by the Administrators or by such other Person that the Administrators may
designate; and

 

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

 

ARTICLE XII

REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE

 

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

 

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

 

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

 

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

 

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

 

Section 12.2.                         Representations
of the Delaware Trustee.  The
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee’s acceptance of its appointment as
Delaware Trustee that:

 

(a)                                  if
it is not a natural person, the Delaware Trustee is duly organized, validly
existing and in good standing under the laws of the State of Delaware;

 

39

 

(b)                                 if
it is not a natural person, the execution, delivery and performance by the
Delaware Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. This Declaration has been
duly executed and delivered by the Delaware Trustee, and under Delaware law
(excluding any securities laws) constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors’ rights generally and to
general principles of equity and the discretion of the court (regardless of
whether considered in a proceeding in equity or at law);

 

(c)                                  if
it is not a natural person, the execution, delivery and performance of this
Declaration by the Delaware Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Delaware Trustee;

 

(d)                                 it
has trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;

 

(e)                                  no
consent, approval or authorization of, or registration with or notice to, any
state or federal banking authority governing the trust powers of the Delaware
Trustee is required for the execution, delivery or performance by the Delaware
Trustee of this Declaration; and

 

(f)                                    the
Delaware Trustee is a natural person who is a resident of the State of Delaware
or, if not a natural person, it is an entity which has its principal place of
business in the State of Delaware and, in either case, a Person that satisfies
for the Trust the requirements of Section 3807 of the Statutory Trust Act.

 

ARTICLE XIII

MISCELLANEOUS

 

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

 

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

 

Coast Bancorp Statutory
Trust II

c/o Coast Bancorp

500 Marsh Street

San Louis Obispo,
California 93401

Attention:  Karen Pohl

Telecopy:  805-781-3180

 

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

 

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1600

 

40

 

Attention: 
Corporate Trust Administration

Telecopy:  302-636-4140

 

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

 

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1600

Attention: 
Corporate Trust Administration

Telecopy:  302-636-4140

 

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

 

Coast Bancorp

500 Marsh Street

San Louis Obispo,
California 93401

Attention:  Karen Pohl

Telecopy:  805-781-3180

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

Signatures appear on the following page

 

42

 

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

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Delaware Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Institutional Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COAST BANCORP, as Sponsor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADMINISTRATORS OF COAST BANCORP

  STATUTORY TRUST II

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Administrator

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Administrator

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Administrator

  	
   

  

 

43

 

ANNEX I

 

TERMS OF SECURITIES

 

Pursuant to Section 6.1 of the Amended and
Restated Declaration of Trust, dated as of September 20, 2007 (as amended
from time to time, the “Declaration”), the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities and the Common Securities are set out below (each capitalized term
used but not defined herein has the meaning set forth in the Declaration):

 

1.                                       Designation
and Number.

 

(a)                                  7,000
Fixed/Floating Rate Capital Securities of Coast Bancorp Statutory Trust II
(the “Trust”), with an aggregate stated liquidation amount with respect to the
assets of the Trust of seven million dollars ($7,000,000.00) and a stated
liquidation amount with respect to the assets of the Trust of $1,000.00 per
Capital Security, are hereby designated for the purposes of identification only
as the “Capital Securities”. The Capital Security Certificates
evidencing the Capital Securities shall be substantially in the form of Exhibit A-1
to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.

 

(b)                                 217
Fixed/Floating Rate Common Securities of the Trust (the “Common Securities”)
will be evidenced by Common Security Certificates substantially in the form of Exhibit A-2
to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.

 

2.                                       Distributions.

 

(a)                                  Distributions
will be payable on each Security for the Distribution Period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Distribution Payment Date in December 2012 at a rate per annum of 6.388%
and shall bear interest for each successive Distribution Period beginning on
(and including) the Distribution Payment Date in December 2012, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date at a rate per annum equal to the 3-Month
LIBOR, determined as described below, plus 1.50% (the “Coupon Rate”),
applied to the stated liquidation amount thereof, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon compounded quarterly at the
applicable Distribution Rate (to the extent permitted by law). Distributions,
as used herein, include cash distributions and any such compounded
distributions unless otherwise noted. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of the Distribution payable (i) for any
Distribution Period commencing on or after the date of original issuance but
before the Distribution Payment Date in December 2012 will be computed on
the basis of a 360-day year of twelve 30-day months, and (ii) for the
Distribution Period commencing on the Distribution Payment Date in December 2012
and each succeeding Distribution Period will be calculated by applying the
Distribution Rate to the stated liquidation amount outstanding at the
commencement of the Distribution Period and multiplying each such number by the
actual number of days in the Distribution Period concerned divided by 360. All
percentages resulting from any calculations on the Capital Securities will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655), and all
dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward)).

 

I-1

 

(b)                                 Distributions
on the Securities will be cumulative, will accrue from the date of original
issuance, and will be payable, subject to extension of distribution payment
periods as described herein, quarterly in arrears on March 15, June 15,
September 15 and December 15 of each year, or if such day is not a
Business Day, then the next succeeding Business Day (each a “Distribution
Payment Date”) (it being understood that interest accrues for any such
non-Business Day, beginning on or after December 15, 2012), commencing on
the Distribution Payment Date in December 2007 when, as and if available
for payment. The Debenture Issuer has the right under the Indenture to defer
payments of interest on the Debentures, so long as no Acceleration Event of
Default has occurred and is continuing, by extending the payment period on the
Debentures for up to 20 consecutive quarterly periods (each an “Extension
Period”) at any time and from time to time, subject to the conditions
described below, during which Extension Period no interest shall be due and
payable. During any Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest will accrue at an annual rate
equal to the Distribution Rate in effect for each such Extension Period,
compounded quarterly from the date such interest would have been payable were
it not for the Extension Period, to the extent permitted by law (such interest
referred to herein as “Additional Interest”). No Extension Period may
end on a date other than a Distribution Payment Date. At the end of any such
Extension Period, the Debenture Issuer shall pay all interest then accrued and
unpaid on the Debentures (together with Additional Interest thereon); provided,
however, that no Extension Period may extend beyond the Maturity Date
and provided  further, however, that during any such
Extension Period, the Debenture Issuer and its Affiliates shall not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire, or make
a liquidation payment with respect to, any of the Debenture Issuer’s or its
Affiliates’ capital stock (other than payments of dividends or distributions to
the Debenture Issuer or payments of dividends from direct or indirect
subsidiaries of the Debenture Issuer to their parent corporations, which also
shall be direct or indirect subsidiaries of the Debenture Issuer) or make any
guarantee payments with respect to the foregoing, or (ii) make any payment
of principal of or interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Debenture Issuer or any Affiliate that rank pari passu in all respects with or junior in interest
to the Debentures (other than, with respect to clauses (i) and (ii) above,
(a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Debenture Issuer in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Debenture Issuer (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period, (b) as
a result of any exchange or conversion of any class or series of the Debenture
Issuer’s capital stock (or any capital stock of a subsidiary of the Debenture
Issuer) for any class or series of the Debenture Issuer’s capital stock or of
any class or series of the Debenture Issuer’s indebtedness for any class or
series of the Debenture Issuer’s capital stock, (c) the purchase of
fractional interests in shares of the Debenture Issuer’s capital stock pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholders’ rights plan, or the issuance of rights, stock
or other property under any stockholders’ rights plan, or the redemption or
repurchase of rights pursuant thereto, (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu
with or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, (f) payments of principal or interest on
debt securities or payments of cash dividends or distributions on any capital
stock issued by an Affiliate that is not, in whole or in part, a subsidiary of
the Debenture Issuer (or any redemptions, repurchases or liquidation payments
on such stock or securities), or (g) payments under the Capital Securities
Guarantee). Prior to the termination of any Extension Period, the Debenture
Issuer may further extend such period, provided that such period together with
all such previous and further consecutive extensions thereof shall not exceed
20 consecutive quarterly periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all accrued and

 

I-2

 

unpaid interest and Additional Interest, the Debenture
Issuer may commence a new Extension Period, subject to the foregoing
requirements. No interest or Additional Interest shall be due and payable
during an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during such Extension
Period shall bear Additional Interest. During any Extension Period,
Distributions on the Securities shall be deferred for a period equal to the
Extension Period. If Distributions are deferred, the Distributions due shall be
paid on the date that the related Extension Period terminates to Holders of the
Securities as they appear on the books and records of the Trust on the record
date immediately preceding such date. Distributions on the Securities must be
paid on the dates payable (after giving effect to any Extension Period) to the
extent that the Trust has funds available for the payment of such distributions
in the Property Account of the Trust. The Trust’s funds available for
Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer. The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

 

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

 

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

 

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

 

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

 

I-3

 

the Debentures to be distributed to the Holders of the
Securities on a Pro Rata basis in accordance with the aggregate stated
liquidation amount thereof.

 

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

 

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

 

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

 

4.                                       Redemption
and Distribution.

 

(a)                                  The
Debentures will mature on December 15, 2037. The Debentures may be
redeemed by the Debenture Issuer, in whole or in part, at any Distribution
Payment Date on or after the Distribution Payment Date in December 2012,
at the Redemption Price. In addition, the Debentures may be redeemed by the
Debenture Issuer at the Special Redemption Price, in whole but not in part, at
any Distribution Payment Date, upon the occurrence and continuation of a
Special Event within 120 days following the occurrence of such Special
Event at the Special Redemption Price, upon not less than 30 nor more than
60 days’ notice to holders of such Debentures so long as such Special
Event is continuing. In each case, the right of the Debenture Issuer to redeem
the Debentures is subject to the Debenture Issuer having received prior
approval from the Federal Reserve (if the Debenture Issuer is a bank holding
company) or prior approval from the OTS (if the Debenture Issuer is a savings
and loan holding company), in each case if then required under applicable
capital guidelines or policies of the applicable federal agency. The Sponsor
shall appoint a Quotation Agent, which shall be a designee of the Institutional
Trustee, for the purpose of performing the services contemplated in or by
reference in, the

 

I-4

 

definition of Special Redemption Price. Any error in
the calculation of the Special Redemption Price by the Quotation Agent or the
Debenture Trustee may be corrected at any time by notice delivered to the
Sponsor and the holders of the Capital Securities. 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 the Special Redemption Price on the Debentures or the Capital
Securities by the Debenture Trustee, the Quotation Agent or the Institutional
Trustee, as the case may be, shall (in the absence of willful default, bad
faith or manifest error) be final, conclusive and binding on the holders of the
Debentures and the Capital Securities, the Trust and the Sponsor, and no
liability shall attach (except as provided above) to the Debenture Trustee, the
Quotation Agent or the Institutional Trustee in connection with the exercise or
non-exercise by any of them of their respective powers, duties and discretion.

 

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

 

(1)                                  the
rate (expressed as a percentage per annum) for U.S. dollar deposits having a
three-month maturity that appears on Reuters Page LIBOR01 as of 11:00 a.m.
(London time) on the related Determination Date (as defined below). “Reuters Page LIBOR01”
means the display designated as “LIBOR01” on Reuters or such other page as
may replace Reuters Page LIBOR01 on that service or such other service or
services as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying London interbank offered rates
for U.S. dollar deposits;

 

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

 

(3)                                  if
fewer than two such quotations are provided as requested in clause (2) above,
the Debenture Trustee will request four major New York City banks to provide
such banks’ offered quotations (expressed as percentages per annum) to leading
European banks for loans in U.S. dollars as of 11:00 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 Reuters Page LIBOR01 as of 11:00 a.m. (London
time) on the related Determination Date is superseded on the Reuters Page LIBOR01
by a corrected rate by 12:00 noon (London time) on such Determination
Date, then the corrected rate as so substituted on the applicable page will
be the applicable 3-Month LIBOR for such Determination Date.

 

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

 

“Capital Treatment Event” means the receipt by the Debenture
Issuer and the Trust of an opinion of counsel experienced in such matters to
the effect that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws, rules or
regulations of the

 

I-5

 

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

 

“Comparable Treasury Issue” means with respect to any Special
Redemption Date the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Fixed Rate Period Remaining Life
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the Fixed Rate Period Remaining Life. If
no United States Treasury security has a maturity which is within a period from
3 months before to 3 months after the Distribution Payment Date in December 2012,
the two most closely corresponding United States Treasury securities as
selected by the Quotation Agent shall be used as the Comparable Treasury Issue,
and the Treasury Rate shall be interpolated and extrapolated on a straight-line
basis, rounding to the nearest month using such securities.

 

“Comparable Treasury Price” means (a) the average of 5
Reference Treasury Dealer Quotations for such Special Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or (b) if
the Quotation Agent obtains fewer than 5 such Reference Treasury Dealer
Quotations, the average of all such Quotations.

 

“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.

 

“Fixed Rate Period Remaining Life” means, with respect to any
Debenture, the period from the Special Redemption Date for such Debenture to
the Distribution Payment Date in December 2012.

 

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

 

“Maturity Date” means December 15, 2037.

 

I-6

 

“Primary Treasury Dealer” shall mean either a primary United
States Government securities dealer or an entity of nationally recognized
standing in matters pertaining to the quotation of treasury securities that is
reasonably acceptable to the Sponsor and the Institutional Trustee.

 

“Quotation Agent” means a designee of the Institutional Trustee
who shall be a Primary Treasury Dealer.

 

“Redemption Date” shall mean the date fixed for the redemption
of Capital Securities, which shall be any Distribution Payment Date on or after
the Distribution Payment Date in December 2012.

 

“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.

 

“Reference Treasury Dealer” means (i) the
Quotation Agent and (ii) any other Primary Treasury Dealer selected by the
Debenture Trustee after consultation with the Debenture Issuer.

 

“Reference Treasury Dealer Quotations” means,
with respect to each Reference Treasury Dealer and any Special Redemption Date,
the average, as determined by the Quotation Agent, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Debenture Trustee by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
Business Day preceding such Redemption Date.

 

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

 

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

 

“Special Redemption Price” means (a) if the Special
Redemption Date occurs before the Distribution Payment Date in December 2012,
the greater of (i) 107.5% of the principal amount of the Debentures, plus
accrued and unpaid Interest on the Debentures to the Special Redemption Date,
or (ii) as determined by the Quotation Agent, (A) the sum of the
present values of the scheduled payments of principal and Interest on the Debentures
during the Fixed Rate Period Remaining Life of the Debentures (assuming the
Debentures matured on December 15, 2012) discounted to the Special
Redemption Date on a quarterly basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate, plus (B) accrued and unpaid
Interest on the Debentures to such Special Redemption Date, or (b) if the
Special Redemption Date occurs on or after the Distribution Payment Date in December 2012,
100% of the principal amount of the Debentures being redeemed, plus accrued and
unpaid Interest on such Debentures to the Special Redemption Date.

 

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

 

I-7

 

accrued on the Debentures; (ii) interest payable
by the Debenture Issuer on the Debentures is not, or within 90 days of the date
of such opinion, will not be, deductible by the Debenture Issuer, in whole or
in part, for United States federal income tax purposes; or (iii) the Trust
is, or will be within 90 days of the date of such opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.

 

“Treasury Rate” means (i) the yield, under the heading
which represents the average for the week immediately prior to the date of
calculation, appearing in the most recently published statistical release
designated H.15 (519) or any successor publication which is published weekly by
the Federal Reserve and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the caption “Treasury
Constant Maturities,” for the maturity corresponding to the Fixed Rate Period
Remaining Life (if no maturity is within three months before or after the Fixed
Rate Period Remaining Life, yields for the two published maturities most
closely corresponding to the Fixed Rate Period Remaining Life shall be
determined and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding to the nearest month) or (ii) if
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Special Redemption Date. The Treasury Rate shall be
calculated by the Quotation Agent on the third Business Day preceding the
Special Redemption Date.

 

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

 

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

 

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

 

(e)                                  Redemption
or Distribution Procedures.

 

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

 

I-8

 

shall affect the validity
of the redemption or exchange proceedings with respect to any other Holder.

 

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

 

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

 

(iv)                              Subject
to the foregoing and applicable law (including, without limitation, United
States federal securities laws), and provided that the acquiror is not the
Holder of the Common Securities or the obligor under the Indenture, the Sponsor
or any of its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.

 

5.                                       Voting
Rights - Capital Securities.

 

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

 

(b)                                 Subject
to the requirements of obtaining a tax opinion by the Institutional Trustee in
certain circumstances set forth in the last sentence of this paragraph, the
Holders of a Majority in liquidation amount of the Capital Securities, voting
separately as a class, have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the

 

I-9

 

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

 

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

 

A waiver of an Indenture Event of Default will constitute a waiver of
the corresponding Event of Default hereunder. Any required approval or
direction of Holders of the Capital Securities may be given at a separate
meeting of Holders of the Capital Securities convened for such purpose, at a
meeting of all of the Holders of the Securities in the Trust or pursuant to written
consent. The Institutional Trustee will cause a notice of any meeting at which
Holders of the Capital Securities are entitled to vote, or of any

 

I-10

 

matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of the Capital
Securities. Each such notice will include a statement setting forth the
following information (i) the date of such meeting or the date by which
such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the Holders of
the Capital Securities will be required for the Trust to redeem and cancel
Capital Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.

 

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

 

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

 

6.                                       Voting
Rights - Common Securities.

 

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

 

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

 

(c)                                  Subject
to Section 6.7 of the Declaration and only after each Event of Default (if
any) with respect to the Capital Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past
default and its consequences that is waivable under the Indenture, or (iii) exercising
any right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable; provided, however, that,
where a consent or action under the Indenture would require a Super Majority,
the Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Notwithstanding
this paragraph 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote or consent of the Holders of the
Capital Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall not take any action described in (i), (ii) or
(iii) above, unless the Institutional Trustee has obtained an opinion of
tax counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account
of such action. If the Institutional Trustee fails to enforce its rights, to
the fullest extent permitted by law, under the Declaration, any Holder of the
Common Securities may institute a legal proceeding directly against any Person
to enforce the

 

I-11

 

Institutional Trustee’s rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.

 

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

 

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

 

7.                                       Amendments
to Declaration and Indenture.

 

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

 

(b)                                 In
the event the consent of the Institutional Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification, or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under
the Indenture would require a Super Majority, the Institutional Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.

 

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

 

(d)                                 Notwithstanding
any provision of the Declaration, the right of any Holder of the Capital
Securities to receive payment of distributions and other payments upon
redemption or otherwise, on or after their respective due dates, or to
institute a suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder. For the

 

I-12

 

protection and enforcement of the foregoing provision,
each and every Holder of the Capital Securities shall be entitled to such
relief as can be given either at law or equity.

 

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

 

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

 

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

 

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

 

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

 

I-13

 

EXHIBIT A-1

 

FORM OF CAPITAL SECURITY CERTIFICATE

 

[FORM OF FACE OF SECURITY]

 

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

 

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

 

A-1-1

 

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

 

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

 

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

 

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

 

	
  Certificate Number P-1

  	
  7,000 Capital Securities

  

[CUSIP NO. [            ]  **To be inserted at the request of the
Holder]

 

September 20, 2007

 

Certificate Evidencing Fixed/Floating Rate Capital
Securities

 

of

 

Coast Bancorp Statutory Trust II

 

(liquidation amount $1,000.00 per Capital Security)

 

Coast Bancorp Statutory Trust II, a statutory trust created under
the laws of the State of Delaware (the “Trust”), hereby certifies that Mertz &
Moyer (the “Holder”), as the nominee of Wilmington Trust Company, indenture
trustee under the Indenture dated as of September 20, 2007 among Preferred
Term Securities XXVII, Ltd., Preferred Term Securities XXVII, Inc.
and Wilmington Trust Company, is the registered owner of capital securities of
the Trust representing undivided beneficial interests in the assets of the
Trust, (liquidation amount $1,000.00 per capital security) (the “Capital
Securities”). Subject to the Declaration (as defined below), the Capital
Securities are transferable on the books and records of the Trust in person or
by a duly authorized attorney, upon surrender of this Certificate duly endorsed
and in proper form for transfer. The Capital Securities represented hereby are
issued pursuant to, and the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities shall in
all respects be subject to, the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of September 20, 2007, among
Jack Wauchope, Leah Pauly and Karan Pohl, as Administrators, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Institutional Trustee,
Coast Bancorp, as Sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Trust, including the designation of
the terms of the Capital Securities as set forth in Annex I to such
amended and restated declaration as the same may be amended from time to time
(the “Declaration”). Capitalized terms used herein but not defined shall have
the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee, and the

 

A-1-2

 

Indenture to the Holder without charge upon written
request to the Sponsor at its principal place of business.

 

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

 

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

 

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

 

Signatures appear on following page

 

A-1-3

 

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

 

	
   

  	
  COAST BANCORP STATUTORY TRUST II

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:
  Administrator

  

 

 

CERTIFICATE OF AUTHENTICATION

 

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

 

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  as the Institutional Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

A-1-4

 

[FORM OF REVERSE OF CAPITAL SECURITY]

 

Distributions payable on each Capital Security will be payable at an
annual rate equal to 6.388% beginning on (and including) the date of original
issuance and ending on (but excluding) the Distribution Payment Date in December 2012
and at an annual rate for each successive period beginning on (and including)
the Distribution Payment Date in December 2012, and each succeeding
Distribution Payment Date, and ending on (but excluding) the next succeeding
Distribution Payment Date (each a “Distribution Period”), equal to 3-Month
LIBOR, determined as described below, plus 1.50% (the “Coupon Rate”), applied
to the stated liquidation amount of $1,000.00 per Capital Security, such rate
being the rate of interest payable on the Debentures to be held by the
Institutional Trustee. Distributions in arrears will bear interest thereon
compounded quarterly at the Distribution Rate (to the extent permitted by
applicable law). The term “Distributions” as used herein includes cash
distributions and any such compounded distributions unless otherwise noted. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. As used herein, “Determination
Date” means the date that is two London Banking Days (i.e., a business day in
which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the commencement of the relevant Distribution
Period. The amount of the Distribution payable (i) for any Distribution
Period commencing on or after the date of original issuance but before the
Distribution Payment Date in December 2012 will be computed on the basis
of a 360-day year of twelve 30-day months, and (ii) for the Distribution
Period commencing on the Distribution Payment Date in December 2012 and
each succeeding Distribution Period will be calculated by applying the
Distribution Rate to the stated liquidation amount outstanding at the
commencement of the Distribution Period and multiplying each such number by the
actual number of days in the Distribution Period concerned divided by 360.

 

“3-Month LIBOR” as used herein, means the London interbank offered
interest rate for three-month U.S. dollar deposits determined by the Debenture
Trustee in the following order of priority: 
(i) the rate (expressed as a percentage per annum) for U.S. dollar
deposits having a three-month maturity that appears on Reuters Page LIBOR01
as of 11:00 a.m. (London time) on the related Determination Date (“Reuters
Page LIBOR01” means the display designated as “LIBOR01” on Reuters or such
other page as may replace Reuters Page LIBOR01 on that service or
such other service or services as may be nominated by the British Bankers’ Association
as the information vendor for the purpose of displaying London interbank
offered rates for U.S. dollar deposits); (ii) if such rate cannot be
identified on the related Determination Date, the Debenture Trustee will
request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London
time) on such Determination Date. If at least two quotations are provided, 3-Month
LIBOR will be the arithmetic mean of such quotations; (iii) if fewer than
two such quotations are provided as requested in clause (ii) above, the
Debenture Trustee will request four major New York City banks to provide such
banks’ offered quotations (expressed as percentages per annum) to leading
European banks for loans in U.S. dollars as of 11:00 a.m. (London time) on
such Determination Date. If at least two such quotations are provided, 3-Month
LIBOR will be the arithmetic mean of such quotations; and (iv) if fewer
than two such quotations are provided as requested in clause (iii) above, 3-Month
LIBOR will be a 3-Month LIBOR determined with respect to the Distribution
Period immediately preceding such current Distribution Period. If the rate for
U.S. dollar deposits having a three-month maturity that initially appears on
Reuters Page LIBOR01 as of 11:00 a.m. (London time) on the related
Determination Date is superseded on the Reuters Page LIBOR01 by a
corrected rate by 12:00 noon (London time) on such Determination Date, then the
corrected rate as so substituted on the applicable page will be the
applicable 3-Month LIBOR for such Determination Date.

 

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

 

A-1-5

 

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

 

Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on March 15, June 15, September 15
and December 15 of each year or if any such day is not a Business Day,
then the next succeeding Business Day (each such day, a “Distribution Payment
Date”) (it being understood that interest accrues for any such non-Business
Day, beginning on or after December 15, 2012), commencing on the
Distribution Payment Date in December 2007. The Debenture Issuer has the
right under the Indenture to defer payments of interest on the Debentures, so
long as no Acceleration Event of Default has occurred and is continuing, by
extending the interest payment period on the Debentures for up to 20
consecutive quarterly periods (each an “Extension Period”) at any time and from
time to time on the Debentures, subject to the conditions described below,
during which Extension Period no interest shall be due and payable. During any
Extension Period, interest will continue to accrue on the Debentures, and
interest on such accrued interest will accrue at an annual rate equal to the
Distribution Rate in effect for each such Extension Period, compounded
quarterly from the date such interest would have been payable were it not for
the Extension Period, to the extent permitted by law (such interest referred to
herein as “Additional Interest”). No Extension Period may end on a date other
than a Distribution Payment Date. At the end of any such Extension Period, the
Debenture Issuer shall pay all interest then accrued and unpaid on the
Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date. Prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such period, provided that such period together with all such previous and
further consecutive extensions thereof shall not exceed 20 consecutive
quarterly periods, or extend beyond the Maturity Date. Upon the termination of
any Extension Period and upon the payment of all accrued and unpaid interest
and Additional Interest, the Debenture Issuer may commence a new Extension
Period, subject to the foregoing requirements. No interest or Additional
Interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due
and payable during such Extension Period shall bear Additional Interest. During
any Extension Period, Distributions on the Capital Securities shall be deferred
for a period equal to the Extension Period. If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the Trust.
The Trust’s funds available for Distribution to the Holders of the Securities
will be limited to payments received from the Debenture Issuer. The payment of
Distributions out of moneys held by the Trust is guaranteed by the Guarantor
pursuant to the Guarantee.

 

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

 

A-1-6

 

ASSIGNMENT

 

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

 

 

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

 

 

 

 

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

 

 

 

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

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
				

 

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

 

Signature Guarantee:(1)

 

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

 

A-1-7

 

EXHIBIT A-2

 

FORM OF COMMON SECURITY CERTIFICATE

 

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

 

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

 

	
  Certificate Number C-1

  	
  217 Common Securities

  

 

September 20, 2007

 

Certificate Evidencing Fixed/Floating Rate Common
Securities

 

of

 

Coast Bancorp Statutory Trust II

 

Coast Bancorp Statutory Trust II, a statutory trust created under
the laws of the State of Delaware (the “Trust”), hereby certifies that Coast
Bancorp (the “Holder”) is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
(the “Common Securities”). The Common Securities represented hereby are issued
pursuant to, and the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities shall in all respects
be subject to, the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of September 20, 2007, among Jack Wauchope, Leah
Pauly and Karan Pohl, as Administrators, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Institutional Trustee, Coast Bancorp, as
Sponsor, and the holders from time to time of undivided beneficial interest in
the assets of the Trust including the designation of the terms of the Common
Securities as set forth in Annex I to such amended and restated declaration, as
the same may be amended from time to time (the “Declaration”). Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration,
the Guarantee and the Indenture to the Holder without charge upon written
request to the Sponsor at its principal place of business.

 

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

 

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

 

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

 

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

 

A-2-1

 

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

 

	
   

  	
  COAST BANCORP STATUTORY TRUST II

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Administrator

  

 

A-2-2

 

[FORM OF REVERSE OF COMMON SECURITY]

 

Distributions payable on each Common Security will be payable at an
annual rate equal to 6.388% beginning on (and including) the date of original
issuance and ending on (but excluding) the Distribution Payment Date in December 2012
and at an annual rate for each successive period beginning on (and including)
the Distribution Payment Date in December 2012, and each succeeding
Distribution Payment Date, and ending on (but excluding) the next succeeding Distribution
Payment Date (each a “Distribution Period”), equal to 3-Month LIBOR, determined
as described below, plus 1.50% (the “Coupon Rate”), applied to the stated
liquidation amount of $1,000.00 per Common Security, such rate being the rate
of interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon compounded quarterly at the
Distribution Rate (to the extent permitted by applicable law). The term “Distributions”
as used herein includes cash distributions and any such compounded
distributions unless otherwise noted. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. As used herein, “Determination Date” means the date that is
two London Banking Days (i.e., a business day in which dealings in deposits in
U.S. dollars are transacted in the London interbank market) preceding the
commencement of the relevant Distribution Period. The amount of the
Distribution payable (i) for any Distribution Period commencing on or
after the date of original issuance but before the Distribution Payment Date in
December 2012 will be computed on the basis of a 360-day year of twelve 30-day
months, and (ii) for the Distribution Period commencing on the
Distribution Payment Date in December 2012 and each succeeding
Distribution Period will be calculated by applying the Distribution Rate to the
stated liquidation amount outstanding at the commencement of the Distribution
Period and multiplying each such number by the actual number of days in the
Distribution Period concerned divided by 360.

 

“3-Month LIBOR” as used herein, means the London interbank offered
interest rate for three-month U.S. dollar deposits determined by the Debenture
Trustee in the following order of priority: 
(i) the rate (expressed as a percentage per annum) for U.S. dollar
deposits having a three-month maturity that appears on Reuters Page LIBOR01
as of 11:00 a.m. (London time) on the related Determination Date (“Reuters
Page LIBOR01” means the display designated as “LIBOR01” on Reuters or such
other page as may replace Reuters Page LIBOR01 on that service or
such other service or services as may be nominated by the British Bankers’
Association as the information vendor for the purpose of displaying London
interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Debenture Trustee
will request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London
time) on such Determination Date. If at least two quotations are provided, 3-Month
LIBOR will be the arithmetic mean of such quotations; (iii) if fewer than
two such quotations are provided as requested in clause (ii) above, the
Debenture Trustee will request four major New York City banks to provide such
banks’ offered quotations (expressed as percentages per annum) to leading
European banks for loans in U.S. dollars as of 11:00 a.m. (London time) on
such Determination Date. If at least two such quotations are provided, 3-Month
LIBOR will be the arithmetic mean of such quotations; and (iv) if fewer
than two such quotations are provided as requested in clause (iii) above, 3-Month
LIBOR will be a 3-Month LIBOR determined with respect to the Distribution
Period immediately preceding such current Distribution Period. If the rate for
U.S. dollar deposits having a three-month maturity that initially appears on
Reuters Page LIBOR01 as of 11:00 a.m. (London time) on the related
Determination Date is superseded on the Reuters Page LIBOR01 by a
corrected rate by 12:00 noon (London time) on such Determination Date, then the
corrected rate as so substituted on the applicable page will be the
applicable 3-Month LIBOR for such Determination Date.

 

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

 

A-2-3

 

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

 

Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on March 15, June 15, September 15
and December 15 of each year or if any such day is not a Business Day,
then the next succeeding Business Day (each such day, a “Distribution Payment
Date”) (it being understood that interest accrues for any such non-Business
Day, beginning on or after December 15, 2012), commencing on the
Distribution Payment Date in December 2007. The Debenture Issuer has the
right under the Indenture to defer payments of interest on the Debentures, so
long as no Acceleration Event of Default has occurred and is continuing, by
extending the interest payment period on the Debentures for up to
20 consecutive quarterly periods (each an “Extension Period”) at any time
and from time to time on the Debentures, subject to the conditions described
below, during which Extension Period no interest shall be due and payable.
During any Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest will accrue at an annual rate
equal to the Distribution Rate in effect for each such Extension Period,
compounded quarterly from the date such interest would have been payable were
it not for the Extension Period, to the extent permitted by law (such interest
referred to herein as “Additional Interest”). No Extension Period may end on a
date other than a Distribution Payment Date. At the end of any such Extension
Period, the Debenture Issuer shall pay all interest then accrued and unpaid on
the Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date. Prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such period, provided that such period together with all such previous and
further consecutive extensions thereof shall not exceed 20 consecutive
quarterly periods, or extend beyond the Maturity Date. Upon the termination of
any Extension Period and upon the payment of all accrued and unpaid interest
and Additional Interest, the Debenture Issuer may commence a new Extension
Period, subject to the foregoing requirements. No interest or Additional
Interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due
and payable during such Extension Period shall bear Additional Interest. During
any Extension Period, Distributions on the Common Securities shall be deferred
for a period equal to the Extension Period. If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust’s funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer.

 

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

 

A-2-4

 

ASSIGNMENT

 

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

 

 

 

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

 

 

 

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

 

 

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

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

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

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
				

 

Signature Guarantee(2)

 

 

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

 

A-2-5

 

EXHIBIT B

 

SPECIMEN OF INITIAL DEBENTURE

 

(See Document No. 16)

 

B-1

 

EXHIBIT C

 

PLACEMENT AGREEMENT

 

(See Document No. 1)

 

C-1Exhibit
10.1

NINTH AMENDMENT TO RECEIVABLES PURCHASE
AGREEMENT

THIS NINTH AMENDMENT TO
RECEIVABLES PURCHASE AGREEMENT, dated as of September 18,
2007 (this “Amendment”), is by and among
Edwards Lifesciences Financing LLC, a Delaware limited liability company (“Seller”), Edwards Lifesciences LLC,
a Delaware limited liability company (“Servicer”),
Variable Funding Capital Company LLC, a Delaware limited liability company (“VFCC”) as assignee of Blue Ridge
Asset Funding Corporation, the liquidity banks from time to time party to the
Liquidity Agreement (the “Liquidity Banks;”
together with VFCC, the “Purchasers”)
and Wachovia Bank, National Association, as agent for the Purchasers (the “Agent”), and pertains to the
Receivables Purchase Agreement dated as of December 21, 2000 amongst the
parties hereto (as heretofore and hereby amended, the “Purchase
Agreement”).  Unless otherwise defined in this Amendment
capitalized terms used herein shall have the meanings assigned to such terms in
the Purchase Agreement.

PRELIMINARY
STATEMENTS

WHEREAS, the
Seller wishes to make certain amendments to the Purchase Agreement; and

WHEREAS, the
Agent and the Purchasers are willing to agree to such amendments.

NOW, THEREFORE,
in consideration of the foregoing premises and the mutual agreements herein
contained and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:

1.            Amendments.  The Purchase Agreement is hereby amended as
follows:

(a)           The definition of “Liquidity Termination Date” set
forth in Exhibit I to the Purchase Agreement is hereby amended and restated in
its entirety to read as follows:

“Liquidity
Termination Date” means the earlier to occur of (a) September
16, 2008, and (b) the date on which a Downgrading Event with respect to a
Liquidity Bank shall have occurred and been continuing for not less than 45
days, and either (i) the Downgraded Liquidity Bank shall not have been replaced
by an Eligible Assignee pursuant to the Liquidity Agreement or (ii) the
Liquidity Commitment of such Downgraded Liquidity Bank shall not have been
funded or collateralized in such a manner that will avoid a reduction in or
withdrawal of the credit rating applied to the Commercial Paper to which such
Liquidity Agreement applies by any of the rating agencies then rating such
Commercial Paper.

(b)           The definition of “Required Reserve Factor Floor” set
forth in Exhibit I to the Purchase Agreement is hereby amended and restated in
its entirety to read as follows:

 1
 

“Required
Reserve Factor Floor” means, for any Calculation Period,
the sum (expressed as a percentage) of (a) 10.0% plus (b) the product of the
Adjusted Dilution Ratio and Dilution Horizon Ratio, in each case, as of the
immediately preceding Cut-Off Date.

2.            Representations and Warranties.  In order to induce VFCC and the Agent, on
behalf of the other Purchasers, to enter into this Amendment, each of the
Seller Parties hereby represents and warrants to VFCC and the Agent, on behalf
of the other Purchasers, as follows:

(a) The execution and delivery by such party of this
Amendment, and the performance of its obligations under the Purchase Agreement
as amended hereby, are within such party’s organizational powers and authority
and have been duly authorized by all necessary organizational action on its
part;

(b) This Amendment has been duly executed and
delivered by such party, and the Purchase Agreement, as amended hereby,
constitutes such party’s legal, valid and binding obligation, enforceable
against such party in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and

(c) As of the date hereof, no event has occurred and
is continuing that will constitute an Amortization Event or an Unmatured
Amortization Event.

3.            Conditions Precedent.  This Amendment shall become effective as of
the date first above written upon:

(a)           execution and delivery to the Agent
of a counterpart hereof by each of the parties hereto, and

(b)           execution and delivery to the Agent
of a counterpart of a seventh amended and restated Fee Letter by each of the
parties thereto, and payment to the Agent of any fees due and owing on the date
hereof.

4.            Miscellaneous.

(a)           CHOICE OF LAW.  THIS AMENDMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF NEW YORK.

(b)           Counterparts.  This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same agreement.

 2
 

(c)           Ratification of Purchase Agreement.  Except as expressly amended hereby, the
Purchase Agreement remains unaltered and in full force and effect and is hereby
ratified and confirmed.

IN
WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their duly authorized officers as of
the date hereof.

	
  

  	
  EDWARDS LIFESCIENCES
  FINANCING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/

  	
  Thomas M. Abate

  
	
   

  	
  Name:

  	
  Thomas M. Abate

  
	
   

  	
  Title:

  	
  Corporate Vice
  President, Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EDWARDS
  LIFESCIENCES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/

  	
  Thomas M. Abate

  
	
   

  	
  Name:

  	
  Thomas M. Abate

  
	
   

  	
  Title:

  	
  Corporate Vice
  President, Chief Financial Officer and Treasurer

  

 

 3
 

 

	
  

  	
  VARIABLE FUNDING CAPITAL
  COMPANY

  LLC

  
	
   

  	
   

  
	
   

  	
  BY:
  WACHOVIA CAPITAL MARKETS, LLC, ITS

  ATTORNEY IN FACT

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/

  	
  Douglas R.
  Wilson, Sr.

  
	
   

  	
  Name:

  	
  Douglas R.
  Wilson, Sr.

  
	
   

  	
  Title:

  	
  Director

  

 

	
  

  	
  WACHOVIA BANK,
  NATIONAL

  ASSOCIATION, AS A LIQUIDITY BANK AND AS

  AGENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/

  	
  Elizabeth R.
  Wagner

  
	
   

  	
  Name:

  	
  Elizabeth R.
  Wagner

  
	
   

  	
  Title:

  	
  Managing
  Director

  

 

 

 4

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