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Exhibit 4.1    
    

FINANCEMENT-QUÉBEC  

U.S.$[                ] [      ]%
 [                ] SERIES [      ] DUE
[                ] 

FORM OF FISCAL AGENCY AGREEMENT  

 FISCAL AGENCY AGREEMENT  

 THIS AGREEMENT dated as of [                        ].

	AMONG:	 	FINANCEMENT-QUÉBEC, as issuer,
	

 	
 	

(the "Issuer")
	
AND:	
 	

QUÉBEC, as guarantor,
	

 	
 	

(the "Guarantor")
	
AND:	
 	

JPMORGAN CHASE BANK, as fiscal agent, registrar, principal paying agent and transfer agent,
	

 	
 	

(in such capacity, the "Fiscal Agent")

        WHEREAS pursuant to an underwriting agreement (the "Underwriting Agreement"), dated  
[                        ], among the Issuer, the Guarantor and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Credit Suisse
First Boston LLC, CIBC World Markets Corp., Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Putnam Lovell NBF Securities Inc., RBC Dominion Securities
Corporation and Scotia Capital (USA) Inc., the Issuer has agreed to create, issue and sell U.S.$
[                        ] of  [    ]%
[                        ] Series  [    ]
 Due [                        ] (the
"Securities") guaranteed unconditionally by the Guarantor as to payment of principal [, premium] and interest [and any Additional Amounts (as defined
below)] (the "Guarantee"); 

        WHEREAS the sale of the Securities pursuant to the Underwriting Agreement has taken place as described in a Prospectus Supplement dated  
[                        ] which contains a description of the Securities and the clearing and settlement
procedures related thereto; 

        WHEREAS the Securities are issuable in the form of one or more fully registered global certificates (the "Global Securities") registered
in the name of Cede & Co., as nominee of The Depository Trust Company, New York ("DTC") and held by JPMorgan Chase Bank, New York, as custodian for DTC (the "Custodian"),
with beneficial interests in the Securities represented, with limited exceptions, through book-entry accounts of financial institutions acting on behalf of beneficial owners thereof as
direct and indirect participants in DTC; 

        WHEREAS owners of beneficial interests in Securities are not, except in limited circumstances described in Section 5, entitled to
receive Securities represented by individual certificates or to have Securities registered in their names; and 

        WHEREAS all Securities are recorded in a register held by the Fiscal Agent (the "Register"), and are registered in the name of
Cede & Co., as nominee of DTC, for the benefit of owners of beneficial interests in the Securities through the Euroclear System 

 

("Euroclear"),
Clearstream Banking, société anonyme ("Clearstream, Luxembourg") and DTC (together, the "Clearing Systems"); 

        NOW THEREFORE it is hereby agreed as follows: 

        1.    Definitions    

        Terms
and expressions defined in the form of Global Security attached as Schedule A shall have the same meaning when used in this Agreement unless otherwise defined herein or
unless the context otherwise requires. "Holders of Securities" or "holders" or "registered holders" refers to persons entered in the Register as registered holders of Securities. 

        2.    Appointment    

        The
Issuer hereby appoints JPMorgan Chase Bank as its fiscal agent, registrar, transfer agent and principal paying agent in respect of the Securities upon and subject to the terms and
conditions herein and therein contained and JPMorgan Chase Bank hereby accepts such appointments. 

        3.    Issue of the Securities    

        (1)   The
Securities shall be issued in the form of one or more fully registered Global Securities registered in the name of Cede & Co., as nominee of DTC and
shall be executed by the Issuer. The Global Securities will be substantially in the form attached as Schedule A, with such changes as may be agreed among the Issuer, the Guarantor and the
Fiscal Agent. The Guarantee of the Guarantor shall be endorsed on the Global Securities. The aggregate principal amount of Securities to be issued and outstanding at any time in the form of the Global
Securities or individual certificates issued in accordance with Section 5 (the "Certificated Securities"), shall not exceed
U.S.$ [                        ], except to the extent that Securities are
further issued in accordance with Section 19.
Forthwith after such execution, the Global Securities shall be delivered to the Fiscal Agent and shall be authenticated by the Fiscal Agent (or by such other person as the Fiscal Agent may appoint for
such purpose with the consent of the Issuer), and delivered to or to the order of the Issuer pursuant to a written direction of the Issuer. 

        (2)   Owners
of beneficial interests in Securities will not, except in the limited circumstances described in Section 5, be entitled to receive Securities represented
by Certificated Securities or to have Securities registered in their names and will not be considered holders thereof under this Agreement. The Certificated Securities, if any, will be substantially
in the form attached as Schedule A with the appropriate changes thereto, consistent with the provisions of this Agreement, as may be agreed between the Issuer and the Fiscal Agent. 

        (3)   The
Global Securities shall be issued and delivered only to or to the order of DTC or its successor appointed by the Issuer in accordance with Section 5(2). The
Global Securities shall be in the principal amount from time to time endorsed thereon. 

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The
Fiscal Agent shall cause DTC to establish on its book-entry Clearing System an account in the name of the Fiscal Agent, as registrar and transfer agent for the Securities (the "Fiscal
Agent Segregated Account"), for the purpose of facilitating the initial distribution of Securities in accordance with procedures previously agreed to by the Issuer, the Fiscal Agent and DTC. The
Fiscal Agent Segregated Account is maintained exclusively for book keeping purposes and for purposes of facilitating timely transfers of Securities, and the Fiscal Agent shall not be deemed the owner
or holder of the Securities recorded therein for any purpose under this Agreement or under the terms of the Securities. The Issuer acknowledges and agrees that the Fiscal Agent Segregated Account will
be subject to the agreements, rules and procedures from time to time governing DTC participant accounts (collectively the "DTC Agreements"). 

        (4)   So
long as Cede & Co., as nominee of DTC, is the registered owner of the Global Securities and subject to applicable law, DTC or its nominee, as the case
may be, will be considered the sole owner or holder of the Securities represented by the Global Securities for all purposes under this Agreement and the Securities. Except as set forth below, owners
of beneficial interests in the Global Securities will not be entitled to have the Securities represented by the Global Securities registered in their names, will not receive or be entitled to receive
Certificated Securities and will not be considered owners or holders thereof under this Agreement or the Securities. None of the Issuer, the Guarantor or the Fiscal Agent will have any responsibility
or liability for any aspect of the records of the Clearing Systems relating to or payments made by the Clearing Systems on account of beneficial ownership interests in the Global Securities or for
maintaining, supervising or reviewing any records of the Clearing Systems relating to such beneficial ownership interests. 

        (5)   All
Securities shall be signed (either manually or by facsimile signature) by any authorized representative or representatives of the Issuer, and shall be authenticated
by the manual signature of the Fiscal Agent (or by such other person as the Fiscal Agent may appoint for such purpose with the consent of the Issuer). The Guarantee of the Guarantor shall be endorsed
on the Securities, and shall be signed (either manually or by facsimile signature) by any authorized official of the Guarantor. 

        4.    The Register and Transfers    

        (1)   The
Fiscal Agent, as registrar and transfer agent of the Issuer, shall maintain at its principal corporate trust office in The City of New York, a Register for
(i) registering and maintaining a record of the holdings of Securities; (ii) ensuring that payments of principal[, premium, if any,] and interest in respect of
the Notes received by the Fiscal Agent from the Issuer are duly credited to Cede & Co.; (iii) registering and maintaining a record of holders of Certificated Securities in the
event any are issued in the limited circumstances described in Section 5; (iv) registering transfers of Certificated Securities in the event any are issued in the limited circumstances
described in Section 5; and (v) registering and maintaining a record of any further issues of Securities pursuant to Section 19 and any subsequent transfers thereof. 

3

 

        In
the event Certificated Securities are issued in exchange for the Global Securities under the limited circumstances described in Section 5, the Fiscal Agent shall
(i) register and maintain a record of holders of Certificated Securities and (ii) register transfers of Securities among holders of Certificated Securities and between holders of
Certificated Securities and participants in DTC, in accordance with such procedures as the Fiscal Agent shall deem reasonable upon consultation with the Issuer. 

        (2)   The
Fiscal Agent shall not be required to inquire into, or take any action in respect of, transfers of beneficial ownership interests in the Global Securities
(i) within Euroclear or Clearstream, Luxembourg or between Euroclear and Clearstream, Luxembourg participants or (ii) between DTC participants. 

        (3)   No
service charge shall be payable by the presenter for any registration, registration of transfer or exchange of the Securities provided that the Fiscal Agent may
require payment by the transferee of a sum sufficient to cover any stamp or other tax or governmental charge in connection therewith. 

        (4)   The
Register shall at all reasonable times be open for inspection by the Issuer and any agent of the Issuer. In the event of any discrepancy between the principal amount
of the Global Securities and the aggregate holdings of Securities by Cede & Co. as shown on the Register, the holdings of Securities as shown on the Register shall prevail. 

        (5)   Neither
the Issuer nor the Fiscal Agent shall be required (i) to register the transfer or exchange of any Securities on any interest payment date or during a
period commencing at the close of business of the New York City office of the Fiscal Agent on the 14th calendar day immediately preceding any such date and ending on such date; (ii) to
register the transfer or exchange of any Securities during the period commencing at the close of business of the New York City office of the Fiscal Agent on the record date of any notice by the
Issuer of any Securities to be redeemed or purchased through the date the notice of redemption or purchase is given; or (iii) to register the transfer or exchange of any Securities called for
redemption unless upon due presentation thereof such Securities called for redemption shall not be redeemed. 

        (6)   Subject
to applicable law, the Issuer, the Fiscal Agent or any other agents of the Issuer or the Fiscal Agent shall not be charged with notice of or be bound to see to
the execution of any trust, whether express, implied or constructive, in respect of any Securities and may register the transfer of any Securities on the direction of the holder thereof, whether named
as trustee or otherwise, as though that person were the beneficial owner thereof. 

        5.    Replacement, Exchange and Transfer of Global Securities and Certificated Securities    

        (1)   The
Fiscal Agent, or an agent duly authorized by the Fiscal Agent, is hereby authorized from time to time in accordance with the provisions of the Securities and of this
section to authenticate and deliver: 

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	(a)
	the
Global Securities or the Certificated Securities, as the case may be, in exchange for or in lieu of the Global Securities or the Certificated Securities, as the case may be,
outstanding on the Register with the same maturity and of like form which have become mutilated, defaced, destroyed, stolen or lost, provided that the applicant therefor shall have (i) paid
such costs as may have been incurred in connection therewith; (ii) surrendered to the Fiscal Agent any mutilated or defaced Global Securities or Certificated Securities, as the case may be, to
be replaced; and (iii) in the case of a lost, stolen or destroyed Global Securities or Certificated Securities, as the case may be, furnished the Fiscal Agent with such evidence (including
evidence as to the serial number of the Global Securities or the Certificated Securities in question) and indemnity in respect thereof as the Issuer and the Fiscal Agent may require;

	(b)
	Certificated
Securities in an authorized form and denomination in exchange for a like aggregate principal amount of Certificated Securities; and

	(c)
	upon
any registration of a transfer, a new Global Security or, as the case may be, a new Certificated Security shall be issued to the new holder in replacement of the existing Global
Security or Certificated Security thus transferred. Such new Global Security or, as the case may be, new Certificated Security, shall be duly authenticated by the Fiscal Agent. 

Each
new Global Security or Certificated Security authenticated and delivered upon any registration of transfer or exchange for or in lieu of the whole or any part of any Global Security or
Certificated Security shall carry all the rights to interest, if any, accrued and unpaid and to accrue which were carried by the whole or such part of such latter Global Security or Certificated
Security, and notwithstanding anything to the contrary herein contained, such new Global Security or Certificated Security shall be dated the date of the authentication of such Global Security or
Certificated Security. 

        (2)   If
DTC (i) notifies the Issuer that it is unwilling or unable to continue as depositary in connection with the Global Securities or (ii) ceases to be a
clearing agency registered under the United States Securities Exchange Act of 1934 at a time when it is required to be and a successor depositary is not appointed by the Issuer within
90 days after receiving such notice or becoming aware that DTC is no longer so registered, then the Issuer will promptly make available to the Fiscal Agent a reasonable supply of Certificated
Securities and will issue or cause to be issued Certificated Securities, with the Guarantee endorsed thereon, upon registration of transfer of, or in exchange for, Securities represented by the Global
Securities. The Issuer shall bear the costs and expenses of printing or preparing any Certificated Securities. 

        (3)   The
Issuer may notify, at any time and at its sole discretion, the Fiscal Agent that all Securities represented by the Global Securities will be exchanged for
Certificated Securities and, in such event, the Issuer will issue or cause to be issued 

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Certificated
Securities, with the Guarantee endorsed thereon, upon registration of transfer of, or in exchange for, Securities represented by the Global Securities. 

        (4)   Upon
request by one or more owners of beneficial interests in the Global Security, after an event of default entitling the holders to accelerate the maturity of the
Securities represented by such Global Security has occurred and is continuing, for the exchange, in whole or in part, of such Global Security for Certificated Securities, the Issuer shall issue or
cause to be issued Certificated Securities, with the Guarantee endorsed thereon, upon registration of transfer of, or in exchange for, Securities represented by such Global Security. 

        (5)   Upon
any such issuance pursuant to this Section 5 of Certificated Securities in exchange for Securities represented by the Global Securities, the Fiscal Agent
shall receive the Global Securities from the Custodian, shall cancel the Global Securities and shall accordingly reduce the holdings of Cede & Co. on the Register and shall receive
Certificated Securities from the Issuer, which the Issuer agrees it shall promptly provide. The Fiscal Agent shall have at least 30 days from the date of its receipt of Certificated Securities
and registration information to authenticate and deliver such Certificated Securities in an aggregate principal amount equal to and in exchange for the DTC participants' beneficial interests in the
Securities represented by the Global Securities as of the record date for such exchange, as directed by DTC. Such Certificated Securities shall be registered in such names and in such denominations as
DTC, pursuant to instructions from direct or indirect participants, shall direct and shall be delivered as directed by the persons in whose names such Certificated Securities are to be registered. All
Securities represented by Certificated Securities issued upon any such issuance in exchange for the Securities represented by the Global Securities shall be valid obligations of the Issuer, shall be
entitled to the same benefits under this Agreement and the Guarantee as the Global Securities and shall be so exchanged without charge to the Fiscal Agent, DTC or the transferee. 

        (6)   Unless
(i) the Global Securities are presented by an authorized representative of DTC to the Issuer, the Fiscal Agent or their respective agents for registration
of transfer, exchange or payment, (ii) any replacement Global Securities are registered in the name of a nominee of DTC and (iii) any payment is made to such nominee, any transfer,
pledge or other use of the Global Securities for value or otherwise shall be wrongful since the registered holders of Global Securities have an interest in the Securities evidenced by the Global
Securities. 

        (7)   The
Issuer expressly acknowledges that if Certificated Securities are not promptly issued to an owner of a beneficial interest in a Global Security in accordance with
the terms of this Section 5, then such beneficial owner shall be entitled to pursue any remedy pursuant to this Agreement or under the Security, with respect to the portion of the Global
Security that represents such beneficial owner's interest therein as if such Certificated Securities had been issued. 

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        6.    Paying Agent    

        The
Fiscal Agent shall act as the principal paying agent for the Issuer in connection with the Securities. The Issuer [hereby appoints J.P. Morgan Bank Luxembourg S.A.
as the Luxembourg paying agent and] may appoint any additional paying agents or terminate the appointment of any paying agents [except that so long as the Securities are listed
on the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so require, the Issuer will maintain a paying agent in Luxembourg.] 

        7.    Payments by the Issuer to the Fiscal Agent    

        (1)   The
Issuer agrees to provide to the Fiscal Agent by 10:00 a.m., New York City time, on each date on which a payment of principal [(and premium,
if any)] or interest [(and any Additional Amounts)] in respect of the Securities is due (each a "Payment Date") pursuant to the terms and conditions of the
Securities, such amount as is required to be paid on such date in immediately available funds in U.S. dollars to an account in The City of New York designated by the Fiscal Agent. 

        (2)   All
monies paid to the Fiscal Agent pursuant to and for the payment of the amounts referred to in this Section 7 shall be received and held by the Fiscal Agent as
agent for the Issuer and shall be applied to the payment of the appropriate U.S. dollar amounts at the time and in the manner provided in this Agreement and the Securities. 

        (3)   All
monies paid to the Fiscal Agent pursuant to this Agreement shall be held by the Fiscal Agent in a separate account, under arrangements agreed upon separately by the
Issuer and the Fiscal Agent from the moment such monies are received until the time of actual payment, for the benefit of the holders of the Securities. The Issuer hereby authorizes the Fiscal Agent
from funds so provided to it to make or cause to be made payment of the principal [(or premium, if any)] or interest [(and any Additional Amounts)] on
the Securities. The Fiscal Agent shall, to the extent permitted by law, return to the Issuer any funds transferred to it for payments with respect to the Securities that are not so paid by the Fiscal
Agent at the expiration of three years after the due date for payment thereof. 

        8.    Payment of Securities    

        (1)   The
Issuer and the Guarantor shall have the right to require a holder of a Security, as a condition of payment of the principal of [and premium, if
any,] or interest [and any Additional Amounts] on a Security, to deliver to the Fiscal Agent a certificate in such form as the Issuer or the Guarantor may from time
to time prescribe in order to enable the Issuer or the Guarantor to determine its duties and liabilities with respect to (i) any taxes, assessments or governmental charges which the Issuer, the
Guarantor, the Fiscal Agent or the paying agent may be required to deduct or withhold from payments in respect of such Security under any present or future law of Canada or Québec or
any regulation thereunder and (ii) any reporting or other requirements under such law or regulation. The Issuer and the Guarantor shall each be entitled to determine 

7

 

its
duties and liabilities with respect to such deduction, withholding, reporting or other requirements on the basis of information contained in such certificate or, if no certificate shall be
presented, on the basis of any presumption created by any such law or regulation and shall be entitled to act in accordance with such determination. 

        (2)   Subject
to applicable law and the terms hereof, the Issuer, the Guarantor, the Fiscal Agent and any other agent of the Issuer, the Guarantor or the Fiscal Agent shall
deem and treat the person whose name appears in the Register as the registered holder of a Security as the absolute owner thereof for all purposes whatsoever notwithstanding any notice to the contrary
and any payment in U.S. dollars of or on account of the principal of [and premium, if any,] and interest [and any Additional Amounts] on such
Security shall be made only to or to the order in writing of such holder, and such payment shall be valid and shall discharge the liability of the Issuer or the Fiscal Agent and any other agent of the
Issuer or the Fiscal Agent on such Security to the extent of the sum or sums so paid. 

        (3)   The
registered holder of any Security shall be entitled to the payments of principal of [and premium, if any,] and interest [and any
Additional Amounts] on such Security, free from all rights of set-off or counterclaim between the Issuer and the original or any intermediate holder thereof and all persons may
act accordingly and a transferee of a Security shall, after the appropriate form of transfer is lodged with the Fiscal Agent or other agent of the Issuer or the Fiscal Agent for the purpose and upon
compliance with all other conditions relating thereto required by this Agreement or by any conditions contained in such Security or by law, be entitled to be entered on the Register as the owner of
such Security free from all rights of set-off or counterclaim between the Issuer and his transferor or any previous holder thereof, save in respect to rights of which the Issuer is
required to take notice by statute or by order of a court of competent jurisdiction. Delivery to the Issuer by a holder of a Security or the receipt by such holder of the principal, [any
premium,] interest [and any Additional Amounts] in respect of such Security shall be a valid discharge to the Issuer, the Guarantor and the Fiscal Agent which shall
not be bound to inquire into the title of such holder, save as ordered by a court of competent jurisdiction or as required by statute. 

        (4)   Where
a Security is registered in more than one name, the principal [and premium, if any,] and interest [and any Additional
Amounts] from time to time payable in respect thereof shall be paid to or to the order of all the joint holders thereof, failing written instructions to the contrary from all such joint
holders, and such payment shall be a valid discharge to the Issuer, the Guarantor, the Fiscal Agent and any other agent of the Issuer, the Guarantor or the Fiscal Agent. 

        (5)   In
the case of the death of one or more joint holders, the principal of [and premium, if any,] and interest [and any Additional
Amounts] on any Securities registered in their names may, notwithstanding subsection (2) of this Section 8, be paid to the survivor or survivors of such holders whose receipt
therefor shall constitute a valid discharge to the Issuer, the Guarantor, the Fiscal Agent and any other agent of the Issuer, the Guarantor or the Fiscal Agent. 

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        9.    Cancellation of Securities    

        All
Certificated Securities that are presented for transfer pursuant to Section 4(1), all Securities that are presented for replacement, exchange or registration of transfer
pursuant to Section 5 or repaid on maturity or redeemed or purchased shall upon such registration of transfer, replacement or exchange or upon payment being made, be cancelled by the
Fiscal Agent. The Fiscal Agent shall, as soon as reasonably possible after the date of any such registration of transfer, replacement, exchange, redemption, purchase or payment, furnish the Issuer
with a certificate or certificates stating (i) the serial numbers and total number of Securities so transferred, replaced, exchanged, redeemed, purchased or repaid and (ii) the amount,
if any, paid in respect of such Securities. Unless otherwise instructed by the Issuer, the Fiscal Agent shall destroy the cancelled Securities in its possession in accordance with its customary
procedure and provide the Issuer and the Guarantor with a destruction certificate duly signed by a representative of the Fiscal Agent. 

        10.    Maturity, Redemption and Purchase    

        (1)   Unless
previously redeemed for tax reasons as provided in the terms and conditions of the Securities, or purchased, the principal amount of the Securities shall be due
and payable on [                        ]. 

        [Add
any redemption provisions] 

        (2)   In
accordance with the terms and conditions of the Securities, upon receipt of a notice of intention to redeem not less than 30 days nor more than 45 days
prior to the date fixed for redemption, the Fiscal Agent shall cause to be given on behalf of the Issuer, in accordance with the provisions under "Notices" in the terms and conditions of the
Securities, a notice of redemption stating: (i) the date fixed for redemption; (ii) the redemption price; (iii) if applicable, the place or places of surrender of the Securities
to be redeemed; (iv) the CUSIP numbers, if any, of the Securities to be redeemed; and (v) that interest on the Securities to be redeemed shall cease to accrue on or after the date fixed
for redemption thereof. 

        (3)   The
Issuer may, if not in default under the Securities, at any time purchase Securities in the open market, or by tender or by private contract at any price. 

        11.    Financial Documents    

        For
so long as any of the Securities are outstanding, (i) the Issuer and the Guarantor agree to supply the Fiscal Agent, upon request, with printed copies of all documents
required to be available by any stock exchange on which the Securities are for the time being listed; (ii) the Issuer agrees to supply the Fiscal Agent, upon request, with printed copies of the
latest annual statements of income and retained earnings and balance sheet of the Issuer; and (iii) the Guarantor agrees to supply the Fiscal Agent, upon request, with printed copies of its
latest consolidated financial statements and annual budget as soon as practicable after publication thereof, for inspection by holders 

9

 

of
Securities at the principal corporate trust office of the Fiscal Agent in The City of New York. Notwithstanding anything herein contained, the obligations of the Issuer and the Guarantor
under this Section 11 will terminate on such date as all amounts required to be paid to the Fiscal Agent by the Issuer or the Guarantor under this Agreement and all amounts required to be paid
to the holders of Securities by the Issuer or the Guarantor under the Securities have been paid in full. The Fiscal Agent, subject to being provided with copies of the documents and reports referred
to above, undertakes to make them available to holders of Securities at its principal corporate trust office in The City of New York during the term of the Securities. All financial documents
of the Issuer and the Guarantor will also be made available on EDGAR through the Securities and Exchange Commission's website (http://www.sec.gov). 

        12.    Fees    

        The
Issuer shall pay to the Fiscal Agent such fees for its services hereunder as are agreed separately in writing by the Issuer and the Fiscal Agent. 

        13.    Further Reports    

        The
Fiscal Agent shall provide the Issuer and the Guarantor upon written request such information regarding the financial servicing of the Securities expressed in such form as the Issuer
and the Guarantor may reasonably require. The Fiscal Agent shall transmit to the Issuer and the Guarantor promptly any notices or other communications addressed to the Issuer or the Guarantor in
connection with the Securities, including any notice of any legal action or proceeding which may be brought against the Issuer or the Guarantor and of which the Fiscal Agent has knowledge. 

        14.    Meetings of Holders of Securities    

        (1)   The
Fiscal Agent shall, on receipt of a written request of the Issuer or a written request signed in one or more counterparts by the holders of not less than 10% of the
principal amount of the Securities then outstanding and upon being indemnified to its reasonable satisfaction by the Issuer or the holders of Securities signing such request against the costs which
may be incurred in connection with the calling and holding of such meeting, convene a meeting of the holders of Securities for any lawful purpose affecting their interests. If the Fiscal Agent fails
to give notice convening such meeting within 30 days after receipt of such request and indemnity, the Issuer or such holders of Securities, as the case may be, may convene such meeting. Every
such meeting shall be held in The City of New York or such other place as may be approved or determined by the Fiscal Agent. 

        (2)   At
least 21 days' notice of any meeting shall be given to the holders of Certificated Securities in the manner provided pursuant to the provisions under "Notices"
in the terms and conditions of the Securities and a copy thereof shall be sent by post to the Fiscal Agent unless the meeting has been called by it, and to the Issuer, unless the meeting has been
called by the Issuer, and to the Guarantor. Such notice shall state the day, time, place and purpose of the meeting and the general nature of 

10

 

the
business to be transacted thereat, and shall include a statement to the effect that, prior to 48 hours prior to the time fixed for the meeting, (i) in the limited circumstances in
which Certificated Securities have been issued, those holders of Certificated Securities who deposit such Securities with the Fiscal Agent or any other person authorized for such purpose by the Fiscal
Agent or the Issuer or (ii) in the case of Securities being represented by the Global Securities, those persons recorded in the Register, shall be entitled to obtain voting certificates for
appointing proxies, but it shall not be necessary for any such notice to set out the terms of any resolution to be proposed at such meeting or any other provisions. 

        (3)   A
holder of Securities may appoint any person by instrument in writing as the holder's proxy in respect of a meeting of the holders of Securities or any adjournment of
such meeting, and such proxy shall have all rights of the holder of Securities in respect of such meeting. All notices of meetings shall contain a requirement that the Clearing Systems must notify
Clearing Systems participants and, if known, beneficial owners of Securities of the meeting in accordance with procedures established from time to time by the Clearing Systems. The registered holders
of Securities shall seek voting instructions on the matters to be raised at such meeting from the Clearing Systems participants or, if known, from the beneficial owners of Securities in accordance
with the applicable procedure of the Clearing Systems. For greater certainty, it is acknowledged that none of the Issuer, the Fiscal Agent, any clearing agency or any intermediary or participant shall
be required to comply with the time limits set out in the applicable procedure of the Clearing Systems but shall use all reasonable efforts to otherwise comply with such procedure and attempt to
provide non-registered holders of Securities with meeting materials and voting rights as if such non-registered holders of Securities were registered holders thereof. 

        (4)   Some
person, who need not be a holder of Securities, nominated in writing by the Fiscal Agent shall be chairman of the meeting and if no person is so nominated or if the
person so nominated is not present within 15 minutes from the time fixed for the holding of the meeting, the holders of Securities present in person or by proxy shall choose some person present to be
chairman, and, failing such choice, the Issuer may appoint a chairman. 

        (5)   At
a meeting of holders of Securities, a quorum shall consist of two or more holders of Securities present in person or by proxy who represent at least a majority in
aggregate principal amount of the Securities at the time outstanding. If a quorum of the holders of Securities shall not be present within one-half hour after the time fixed for holding
any meeting, the meeting, if convened by or at the request of holders of Securities, shall be dissolved, but if otherwise convened the meeting shall stand adjourned without notice to the same day in
the next week (unless such day is not a business day in the place where the meeting is to take place in which case it shall stand adjourned until the next such business day following thereafter) at
the same time and place unless the chairman shall appoint some other place, day or time of which not less than seven days' notice shall be given in the manner provided above. At any adjourned meeting
called by the Issuer or the Fiscal Agent two or more holders of Securities present in person or by proxy shall constitute a quorum and may transact the 

11

 

business
for which the meeting was originally convened notwithstanding that they may not represent at least a majority in aggregate principal amount of the Securities then outstanding. 

        (6)   The
chairman of any meeting at which a quorum of the holders of Securities is present may, with the consent of the holder(s) of a majority in aggregate principal amount
of the Securities represented thereat, adjourn any such meeting and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe. 

        (7)   Every
motion or question submitted to a meeting shall be decided by Extraordinary Resolution (as hereinafter defined) and in the first place by the votes given on a show
of hands. At any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or
lost or not carried by a particular majority shall be conclusive of the fact. On any question submitted to a meeting when ordered by the chairman or demanded by a show of hands by one or more holders
of Securities acting in person or by proxy and holding at least 2% in aggregate principal amount of the Securities then outstanding, a poll shall be taken in such manner as the chairman shall direct. 

        (8)   On
a poll each holder of Securities present in person or represented by a proxy duly appointed by an instrument in writing shall be entitled to one vote in respect of
each U.S.$1,000 principal amount of Securities then held by such holder. A proxy need not be a holder of Securities. In the case of Securities held jointly, any one of the joint holders present in
person or by proxy may vote in the absence of the other or others; but in case more than one of them be present in person or by proxy, only one of them may vote in respect of each U.S.$1,000 principal
amount of Securities of which they are joint holders. 

        (9)   The
Issuer, the Guarantor and the Fiscal Agent by their respective officers, directors and representatives, and the legal advisors of the Issuer, the Guarantor and the
Fiscal Agent may attend any meeting of the holders of Securities, but shall have no vote as such. 

        (10) Subject
to Section 16, in addition to all other powers conferred upon them by any other provision of this Agreement or by law, holders of Securities at a meeting
shall have the following powers, any one or combination of which may be exercised from time to time by Extraordinary Resolution: 

	(a)
	power
to confirm any modification or amendment of this Agreement or the terms and conditions of the Securities proposed by the Issuer;

	(b)
	power
to direct or authorize the Fiscal Agent to exercise any power, right, remedy or authority given to it by this Agreement or the Securities in any manner specified in such
Extraordinary Resolution or to refrain from exercising any such power, right, remedy or authority; 

12

 

	(c)
	power
to waive and direct the Fiscal Agent to waive any default on the part of the Issuer in complying with any provisions of this Agreement or the Securities or to waive and direct
the Fiscal Agent to waive future compliance with any provision or provisions of this Agreement or the Securities; and

	(d)
	power
to repeal, modify or amend any Extraordinary Resolution previously passed by the holders of Securities. 

        Provided
however, that no such modification nor amendment to this Agreement or to the terms and conditions of the Securities or any other action taken may, without the consent of the
holder of each such Security affected thereby: (a) change the stated maturity or interest payment date of any such Security; (b) reduce the principal amount of or rate of interest on any
such Security; (c) change the currency of payment of any such Security; (d) impair the right to institute suit for the enforcement of any payment on or with respect to such Security or
the Guarantee; (e) reduce the percentage of the holders of Securities necessary to modify or amend this Agreement or the terms and conditions of the Securities or reduce the percentage of votes
required for the taking of action or the quorum required at any meeting of holders of Securities; or (f) reduce the percentage of outstanding Securities necessary to waive any future compliance
or past default. 

        (11) All
actions that may be taken and all powers that may be exercised by the holders of Securities at a meeting held as hereinbefore provided may also be taken and
exercised by the holders of not less than 662/3% of the aggregate principal amount of the Securities at the time outstanding by an instrument in writing signed in one or more
counterparts and the expression "Extraordinary Resolution" when used in this Agreement shall include an instrument so signed. 

        (12) The
term "Extraordinary Resolution" means a resolution proposed to be passed at a meeting of holders of Securities duly convened for the purpose and held in accordance
with the provisions of this Agreement and passed by the affirmative vote of the holders of not less than 662/3% of the aggregate principal amount of the Securities represented at the
meeting in person or by proxy or as an instrument in writing signed by the holders of not less than 662/3% in principal amount of the outstanding Securities. 

        (13) Minutes
of all resolutions and proceedings at every meeting of holders of Securities held in accordance with the provisions of this Agreement shall be made and entered
in books to be from time to time provided for that purpose by the Fiscal Agent at the expense of the Issuer and any such minutes, if signed by the chairman of the meeting at which such resolutions
were passed or proceedings taken, or by the chairman of the next succeeding meeting of the holders of Securities, shall be prima facie evidence of the matters therein stated and, until the contrary is
proved, every such meeting, in respect of the proceedings of which minutes shall have been made, shall be deemed to have been duly held and convened, and all resolutions passed and proceedings taken
thereat to have been duly passed and taken. 

13

   
        (14) Every Extraordinary Resolution passed in accordance with the provisions of this Agreement at a meeting of holders of Securities shall be binding upon all the holders of
Securities, whether present at or absent from such meeting, and every instrument in writing signed by holders of Securities in accordance with Section 14(11) shall be binding upon all the
holders of Securities (whether or not a signatory). Subject to the provisions for its indemnity herein contained, the Fiscal Agent shall be bound to give effect accordingly to every such Extraordinary
Resolution. 

        (15) The
Fiscal Agent, or the Issuer with the approval of the Fiscal Agent, may from time to time make and from time to time vary such regulations as it shall from time to
time deem fit: 

	(a)
	for
the deposit of instruments appointing proxies at such place as the Fiscal Agent, the Issuer or the holders of Securities convening a meeting, as the case may be, may in the notice
convening such meeting direct;

	(b)
	for
the deposit of instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments
appointing proxies to be mailed, cabled or sent by any other means of recorded communication before the meeting to the Issuer or to the Fiscal Agent at the place where the same is to be held and for
the voting of proxies so deposited as though the instruments themselves were produced at the meeting. 

        Any
regulation so made shall be binding and effective and votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, the only persons
who shall be entitled to vote at a meeting of holders of Securities shall be the holders thereof or their duly appointed proxies. 

        (16) The
powers and any combination of the powers in this Agreement stated to be exercisable by the holders of Securities by Extraordinary Resolution may be exercised from
time to time and the exercise of any one or more of such powers or any combination of powers from time to time shall not be deemed to exhaust the right of the holders of Securities to exercise such
power or powers or combination of powers then or any power or powers or combination of powers thereafter from time to time. 

        15.    Indemnification    

        (1)   The
Issuer and the Guarantor agree solidarily to indemnify and hold harmless the Fiscal Agent against all claims, actions, demands, damages, costs and losses arising out
of or relating to the Fiscal Agent's duties as fiscal agent, registrar, transfer agent and principal paying agent for the Issuer with respect to the Securities, except such as may result from the
Fiscal Agent's gross negligence, willful misconduct or bad faith or that of its directors, officers, employees or representatives. 

        (2)   This
Section 15 shall survive the payment in full of all obligations of the Securities, whether by redemption, repayment or otherwise. 

14

 

        16.    Amendments    

        This
Agreement and the Securities may be amended by the Issuer, the Guarantor and the Fiscal Agent without notice to or the consent of the holders of Securities, for any one or more of
the following purposes: (i) curing any ambiguity; (ii) curing, correcting or supplementing any defective provisions contained herein or therein; (iii) effecting the issue of
further Securities of the Issuer pursuant to Section 19; or (iv) in any other manner in which the Issuer and the Guarantor, acting on the advice of independent counsel, may deem
necessary or desirable and which will not be inconsistent with this Agreement or the Securities and which in the reasonable opinion of the Issuer and the Guarantor, on the one hand, and the Fiscal
Agent upon receiving an opinion of counsel of the Issuer and the Guarantor satisfactory to the Fiscal Agent, on the other hand, will not adversely affect the interests of the holders of Securities. 

        17.    The Fiscal Agent    

        (1)   Subject
to Section 7(3), in acting under this Agreement and in connection with the Securities, the Fiscal Agent is acting solely as agent of the Issuer and does
not assume any obligation or relationship of agency or trust with any of the holders of Securities, except that all amounts received and held by the Fiscal Agent for payment in respect of the
Securities shall be held in trust for the holders of Securities in a separate account or accounts for payment to the holders of Securities. 

        (2)   The
Fiscal Agent shall incur no liability hereunder except for loss sustained by reason of its gross negligence, willful misconduct or bad faith, or that of its
directors, officers, employees or representatives. 

        (3)   The
Fiscal Agent shall be protected and shall incur no liability for action taken or not taken, or suffered to be taken or not taken, with respect to all legal matters
upon which it has received advice from counsel in good faith and in accordance with the opinions and advice of such counsel. 

        (4)   The
Fiscal Agent and its officers, directors and employees may become the owners of, or acquire an interest in, any Securities, with the same rights that it or they
would have if the Fiscal Agent were not acting as agent hereunder, and may engage or be interested in any financial or other transaction with the Issuer, and may act on behalf of, or as a depositary,
trustee or agent for, any committee or body of holders of Securities or holders of other obligations of the Issuer as freely as if the Fiscal Agent were not acting as agent hereunder. 

        (5)   The
Fiscal Agent may rely and shall be protected in acting upon any Order in Council, by-law, resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, letter, telegram, telecopier or other paper or document believed by it to be genuine and to have been signed, sent or presented by or on behalf of the proper
party or parties and in particular, may rely and shall be protected in acting on the basis of any such notice which is given in accordance with the provisions hereof. 

15

 

        (6)   In
no event shall the Fiscal Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits),
even if the Fiscal Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. 

        18.    Resignation or Replacement of Fiscal Agent    

        (1)   The
Issuer agrees that there shall at all times be a fiscal agent, registrar, transfer agent and principal paying agent hereunder until the earlier of (i) there
being no Securities outstanding, or (ii) the Issuer having established to the satisfaction of the Fiscal Agent that the Issuer may avail itself of defenses under all relevant laws for the
prescription of actions in respect of any outstanding Securities. 

        (2)   The
Fiscal Agent may resign at any time by sending at least thirty days' written notice by registered mail to the Issuer and the Guarantor. Upon receipt of such notice,
the Issuer shall appoint another financial institution or institutions as successor fiscal agent, registrar, transfer agent and principal paying agent under this Agreement. Subject to the provisions
hereof, the Issuer may terminate the appointment of the Fiscal Agent as fiscal agent, registrar, transfer agent and principal paying agent and appoint another financial institution or institutions as
successor fiscal agent, registrar, transfer agent and principal paying agent under this Agreement provided that it gives the Fiscal Agent not less than 30 days' written notice of termination.
Neither the resignation nor the termination of the appointment of the Fiscal Agent as fiscal agent, registrar, transfer agent and principal paying agent shall take effect until the appointment of the
successor fiscal agent, registrar, transfer agent and principal paying agent becomes effective. On the effective date of the resignation of the Fiscal Agent or of the termination of its appointment as
fiscal agent, registrar, transfer agent and principal paying agent, the Fiscal Agent shall deliver to the successor fiscal agent, registrar, transfer agent and principal paying agent all funds of the
Issuer then held by it and the Issuer shall pay to the Fiscal Agent all amounts owed by the Issuer to the Fiscal Agent pursuant to this Agreement up to the said effective date. 

        (3)   If
the Fiscal Agent shall be adjudged a bankrupt or insolvent, or shall file a voluntary petition in bankruptcy or makes an assignment for the benefit of its
creditors or consents to the appointment of a receiver or custodian of all or any substantial part of its property, or shall admit in writing of its inability to pay or meet its debts as they mature,
or if a receiver or custodian of it or of all or any substantial part of its property shall be appointed or if any public officer shall have taken charge or control of it or of its property or
affairs, for the purposes of rehabilitation, conservation or liquidation, a successor fiscal agent, registrar, transfer agent and principal paying agent shall be appointed by the Issuer. Upon such an
appointment of a successor fiscal agent, registrar, transfer agent and principal paying agent, the Fiscal Agent shall cease to be a fiscal agent, registrar, transfer agent and principal paying agent
hereunder whether or not notice of such termination shall have been given. If no successor fiscal agent, registrar, transfer agent and principal paying agent shall have been appointed by the Issuer,
any holder of a Security, on behalf of itself and all other holders of Securities, or 

16

 

the
Fiscal Agent, may petition any court of competent jurisdiction for the appointment of a successor fiscal agent, registrar, transfer agent and principal paying agent. 

        19.    Further Issues    

        The
Issuer may from time to time, without the consent of the holders of Securities, create and issue further securities ranking equally with the Securities in all respects (or in all
respects save for the first payment of interest thereon) and such further securities shall be consolidated and form a single series with the Securities. Any further securities forming a single
series with the outstanding Securities shall be issued with the benefit of and subject to an agreement supplemental to this Agreement. 

        20.    Notices    

        Any
notice pursuant to this Agreement shall be deemed to have been duly given upon the dispatch of such notice by registered mail or telecopier (to be confirmed in writing by registered
mail), addressed to the Issuer, the Guarantor or the Fiscal Agent as follows: 

	(a)
	to
the Issuer: 

Financement-Québec

Ministère des Finances

Direction de l'émission des emprunts

12, rue Saint-Louis

Québec, Québec

Canada G1R 5L3

Attention: Le président — directeur général

Tel.: (418) 643-8141

Fax: (418) 643-4700 

with
copy to the Guarantor 

	(b)
	to
the Guarantor: 

Ministère
des Finances

Direction de l'émission des emprunts

12, rue Saint-Louis

Québec, Québec

Canada G1R 5L3

Attention: Le directeur

Tel.: (418) 643-8141

Fax: (418) 643-4700 

17

 

	(c)
	to
the Fiscal Agent: 

JPMorgan
Chase Bank

4 New York Plaza, 15th Floor

New York, New York 10004

Attention: Institutional Trust Services

Tel.: (212) 623-5248

Fax: (212) 623-6216 

or
to any other address or number of which either of the parties shall have notified the other in writing in accordance with this provision. 

        21.    Applicable Law    

        This
Agreement shall be governed by and interpreted in accordance with the laws of Québec and the laws of Canada applicable therein. 

        Nothing
herein contained shall affect the right to serve process on the Issuer or the Guarantor in any manner permitted by law. The Issuer and the Guarantor hereby irrevocably consent to
the fullest extent permitted by law to the giving of any relief including, without limitation, the making, enforcement or execution against any property of any order or judgment made or given in
connection with any proceedings arising out of or in connection with this Agreement. 

        22.    Successors    

        This
Agreement shall extend to and enure to the benefit of and be binding upon the Issuer, the Guarantor and the Fiscal Agent and their respective successors and assigns. 

        23.    Counterparts    

        This
Agreement may be executed in separate counterparts, and each such counterpart, when so executed and delivered, shall be deemed to be an original. Such counterparts shall together
constitute one and the same agreement. 

18

 

        Executed
in The City of New York as of [                        ]. 

	

 	
 	
FINANCEMENT-QUÉBEC
	 	 	 	 	 
	 	 	By:	 	

	 	 	 	 	Name:

Title:
	

 	
 	
QUÉBEC
	 	 	 	 	 
	 	 	By:	 	

	 	 	 	 	Name:

Title:
	

 	
 	
JPMORGAN CHASE BANK, as Fiscal Agent
	 	 	 	 	 
	 	 	By:	 	

	 	 	 	 	Name:

Title:

19

SCHEDULE A

FORM OF GLOBAL SECURITY  

        Unless this security is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to
Financement-Québec or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. 

SECURITY NO.

CUSIP [                        ]

FINANCEMENT-QUÉBEC

[    ]% [                        ] SERIES [    ] DUE
[                        ]

GUARANTEED UNCONDITIONALLY BY QUÉBEC  

        This global security, registered in the name of Cede & Co., as nominee of DTC (the "Global Security"), is a permanent global security in respect of
the duly authorized issue of securities referred to above (the "Securities") of Financement-Québec, payment of which is unconditionally guaranteed pursuant to the guarantee given by
Québec (the "Guarantee"), as guarantor (the "Guarantor"), and is issued subject to a Fiscal Agency Agreement, dated as of  
[                        ], among Financement-Québec, the Guarantor, and JPMorgan Chase Bank,
New York, as fiscal
agent, registrar, transfer agent and principal paying agent (the "Fiscal Agent" which term includes any successor fiscal agent, registrar, transfer agent and principal paying agent under the Fiscal
Agency Agreement) as such agreement may be supplemented or amended, as the case may be (the "Fiscal Agency Agreement"). This Global Security also represents any further securities which
Financement-Québec may issue, from time to time, pursuant to Section 19 of the Fiscal Agency Agreement. In the event such further securities are issued, the word "Securities" as
defined above shall be deemed to also refer to such further securities. 

        This
Global Security and all the rights of the holder hereof are expressly subject to the Fiscal Agency Agreement, and this Global Security and the Fiscal Agency Agreement constitute a
contract to all of the terms and conditions of which the holder by acceptance hereof assents, is bound by and is deemed to have notice. All defined terms unless defined herein have the meaning
ascribed to them in the Fiscal Agency Agreement. Copies of the Fiscal Agency Agreement are available for inspection at the principal office of the Fiscal Agent. 

 

        This
is a fully registered Global Security without coupons attached. In certain limited circumstances, as described in Section 5 of the Fiscal Agency Agreement, it is exchangeable
in whole or in part, at the office of the Fiscal Agent, for Certificated Securities. 

        FOR VALUE RECEIVED, Financement-Québec hereby promises to pay to Cede & Co. or its registered assigns in the
manner hereinafter mentioned on [                        ] (or on such earlier date as the Principal Amount (as hereinafter
defined) may become payable in accordance with the terms
hereof) the principal sum set forth in Schedule I hereto from time to time (the "Principal Amount") in lawful money of the United States of America, on presentation and surrender
of this Global Security, and to pay interest in arrears on the said Principal Amount at the rate of [    ]% per annum, from
[                        ],
or from the most recent Interest Payment Date to which interest has been paid or duly provided for, in two equal semi-annual installments on
[                        ] and
[                        ] in each year (each an "Interest Payment Date"), commencing
[                        ], until the Principal Amount is paid in full or duly made
available for payment, [in each case together with such further sum, if any, as may be payable by way of Additional Amounts in accordance with the provisions set forth herein]
and should Financement-Québec at any time default in the payment of any of the Principal Amount of [or premium, if any,] or interest on this Global Security
[or any Additional Amounts], to pay interest on the amount in default (before as well as after judgment) at the same rate, in like money, on the same dates.
[References herein to principal [, premium, if any,] and interest in respect of this Global Security or the Securities shall be deemed also to refer to any
Additional Amounts which may be payable concurrently therewith, unless the context otherwise requires.] Interest will cease to accrue on this Global Security on
[                        ] (or on such earlier date as the Principal Amount may become payable in accordance with the terms
hereof) unless, upon due presentation of this Global
Security, payment of the Principal Amount [or any] [premium or] [Additional Amounts] is improperly withheld or refused. 

        This
Global Security shall not become valid and obligatory for any purpose unless and until this Global Security has been authenticated by the Fiscal Agent or its authorized
representative. 

TERMS AND CONDITIONS  

Status of the Securities and the Guarantee  

        The Securities will be direct, unsecured and unconditional obligations of Financement-Québec. The Securities will rank equally among themselves and
with all other unsecured debt securities issued by Financement-Québec and outstanding at the date hereof or in the future. 

        The
Guarantor will unconditionally guarantee the due and punctual payment of the principal of [and premium, if any,] and interest [and any Additional
Amounts] on the Securities upon default in payment by Financement-Québec, when and as the same shall respectively become due and payable, whether at maturity, by
acceleration or 

2

 

otherwise.
The Guarantee will be endorsed on the certificates representing the Securities. The Guarantee will be a direct, unconditional and unsecured obligation of the Guarantor and will rank
equally in right of payment with all other unsecured obligations for borrowed money of the Guarantor outstanding at the date hereof or in the future. 

Form, Denomination and Registration  

        This Global Security is registered in the name of of Cede & Co., as a nominee of DTC. This Global Security is exchangeable for Securities registered
in the name of a person other than DTC or its nominee only in the limited circumstances hereinafter described under "Certificated Securities". Unless and until it is exchanged in whole or in part for
Certificated Securities, this Global Security may not be transferred, except as a whole, by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any such
nominee to a successor of DTC or a nominee of such successor. 

        The
Securities will only be sold in denominations of U.S.$1,000 or integral multiples thereof. 

        The
Fiscal Agent will be responsible for (i) maintaining a record of the aggregate holdings of Securities; (ii) ensuring that payments of principal [,
premium] and interest in respect of the Securities received by the Fiscal Agent from Financement-Québec are duly credited to DTC; and (iii) transmitting to
Financement-Québec any notices from registered holders of Securities. The Fiscal Agent will not impose any fees in respect of the Securities, other than reasonable fees for the
replacement of lost, stolen, mutilated or destroyed Securities. However, owners of beneficial interests in Securities may incur fees payable in respect of the maintenance and operation of the
book-entry accounts in which such Securities are held with DTC. 

Certificated Securities  

        If DTC (i) notifies Financement-Québec that it is unwilling or unable to continue as depositary in connection with the Global Securities or
(ii) ceases to be a clearing agency registered under the United States Securities Exchange Act of 1934 at a time when it is required to be and a successor depositary is not appointed by
Financement-Québec within 90 days after receiving such notice or becoming aware that DTC is no longer so registered, then Financement-Québec will issue or cause to
be issued Securities represented by fully registered individual certificates (the "Certificated Securities"), with the Guarantee endorsed thereon, upon registration of, transfer of or exchange for the
Global Securities. 

        Financement-Québec
may also at any time and in its sole discretion notify the Fiscal Agent that all of the Securities represented by a Global Security will be exchanged
for Certificated Securities, with the Guarantee endorsed thereon, upon registration of, transfer of or exchange for the Global Securities, and, in such event, will issue or cause to be issued
Certificated Securities upon registration of, transfer of or exchange for the Global Securities. Upon request by one or more owners of beneficial interests in the 

3

 

Global
Security, after an event of default entitling the holders to accelerate the maturity of the Securities represented by such Global Security has occurred and is continuing for the exchange of
the Global Securities for Certificated Securities, Financement-Québec shall issue or cause to be issued the Certificated Securities, with the Guarantee endorsed thereon, upon
registration of, transfer of or exchange for Securities represented by the Global Securities. [In the event Securities represented by such Certificated Securities are issued and for so
long as the Securities are listed on the Luxembourg Stock Exchange, and the rules of the Luxembourg Stock Exchange so require, Financement-Québec will appoint and maintain a transfer
agent in Luxembourg. A publication will be made in accordance with "Notices" below describing how payments on such Certificated Securities will be made.] 

Interest  

        The Securities will bear interest from [                        ]
at a rate of [    ]% per annum, payable in two
equal semi-annual installments, in arrears on [                        ] and
[                        ]cfn>. Interest on the Securities will cease to accrue
on the date fixed for redemption or repayment unless, upon due presentation of the Securities, payment of principal [or premium, if any,] is improperly withheld or refused. 

        Whenever
it is necessary to compute any amount of interest in respect of the Securities, other than with respect to regular semi-annual payments, such interest shall be
calculated on the basis of a 360-day year of twelve 30-day months. The rate of interest specified in the Securities is a nominal rate and all interest payments and computations
are to be made without allowances or deductions for deemed reinvestment. 

        For
purposes of disclosure pursuant to the Interest Act (Canada), the rate of interest payable on any basis other than a full calendar year may be determined by multiplying the
applicable annual interest rate by a fraction the numerator of which is the actual number of days in the period for which interest is payable and the denominator of which is 365 days or
366 days, as the case may be. 

Payments  

        Principal of [and premium, if any] and interest [and any Additional Amounts (as defined below under "Payment of Additional
Amounts")] on the Securities are payable by Financement-Québec in lawful money of the United States of America ("U.S. dollars") to the person registered on the
relevant record date in the register held by the Fiscal Agent. The Fiscal Agent will act as Financement-Québec's principal paying agent for the Securities pursuant to the Fiscal Agency
Agreement. 

        If
any date for payment to the registered holder hereof is not a Business Day in the applicable place of payment, such registered holder shall not be entitled to payment until the next
following Business Day, and no further interest shall be paid in respect of the delay in such payment. In this paragraph "Business Day" means a day on which banking institutions in The City of
New York and in any other applicable place of payment are not authorized or obligated by law or executive order to be closed. 

4

 

Record Date  

        The record date for purposes of payments of principal [and premium, if any,] and interest [and any Additional
Amounts] on the Securities will be as of 5:00 p.m., New York City time, on the fourteenth calendar day preceding the maturity date or interest payment date, as applicable. 

[Payment of Additional Amounts  

        The principal of [and premium, if any,] and interest on the Securities will be paid to any holder, who as to Canada or any province,
political subdivision or taxing authority therein or thereof is a non-resident, without deduction for or on account of any present taxes or duties of whatsoever nature, imposed or levied
by or within Canada, or any province, political subdivision or taxing authority therein or thereof. If as a result of any change in, or amendment to, or in the official application of, the laws of
Canada or the regulations of any taxing authority therein or thereof or any change in, or in the official application of, or execution of, or amendment to, any treaty or treaties affecting taxation to
which Canada is a party, Financement-Québec or the Guarantor shall be required to withhold any taxes or duties from any payments due respectively under the Securities or the Guarantee,
Financement-Québec (in the case of the Securities) or the Guarantor in the case of the Guarantee) will pay such additional amounts (the "Additional Amounts") as may be necessary in
order that every net payment of the principal of [and premium, if any] and interest on the Securities to any such holder will be not less than the amount provided for in the
Securities. Financement-Québec or the Guarantor, as the case may be, shall not, however, be obligated to pay such Additional Amounts on account of any such taxes or duties to which any
holder is subject otherwise than by reason of his ownership of Securities or the receipt of income therefrom or which become payable as a result of any Security being presented for payment on a date
more than ten days after the date on which the same becomes due and payable, or the date on which payment thereof is duly provided for, whichever is later. [In addition, neither
Financement-Québec nor the Guarantor shall be obligated to pay any Additional Amounts where such withholding or deduction is imposed on a payment to an individual and is required to be
made pursuant to European Council Directive 2003/48/EC or any directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 on the taxation of
savings income, or any law implementing or complying with, or introduced in order to conform to, such Directive or presented for payment by or on behalf of a holder who would have been able to avoid
such withholding or deduction by presenting the relevant Security to another Paying Agent in a Member State of the European Union.] 

Maturity, Redemption and Purchases  

        Unless previously redeemed as provided below, or purchased, the principal amount of the Securities shall be due and payable on  
[                        ]. 

        [Add
any redemption provisions] 

5

 

        [If
as a result of any change in, or amendment to, or in the official application of, the laws of Canada or the regulations of any taxing authority therein or thereof (other
than Québec) or any change in, or in the official application of, or execution of, or amendment to, any treaty or treaties affecting taxation to which Canada is a party, which change or
amendment shall have become effective after [                        ], it is determined by Financement-Québec or the
Guarantor that Financement-Québec or
the Guarantor, as the case may be, would be required at, or at any time prior to, maturity of the Securities to pay Additional Amounts as hereinabove described, the Securities may be redeemed in whole
but not in part at the option of Financement-Québec on not less than 30 days' nor more than 45 days' published notice in accordance with the provisions set forth below
under "Notices", at the Principal Amount thereof together with accrued interest.] 

        Financement-Québec
may at any time purchase Securities in any manner and at any price. 

Events of Default  

        In the event that (a) Financement-Québec or the Guarantor shall default in the payment of the principal of [or premium, if
any,] or interest [or any Additional Amounts] on the Securities, as the same shall become due and payable, and such default shall continue for a period of
45 days or (b) default shall be made in the due performance or observance by Financement-Québec or the Guarantor of any covenant or agreement contained in the Securities,
other than the payment of principal, [premium,] interest [or Additional Amounts], or in the Fiscal Agency Agreement, and such default shall continue for
a period of 60 days or (c) Financement-Québec or the Guarantor shall default in the payment of any principal of [or premium, if any,] or interest
[or any Additional Amounts] on any indebtedness (direct or under a guarantee) for borrowed money, other than the Securities, as the same shall become due and payable, and such
default shall continue for a period of 45 days, provided that the foregoing shall not be taken into account so long as the aggregate principal amount of all such indebtedness (direct or under a
guarantee) for borrowed money with respect to which the foregoing has occurred does not exceed U.S.$50,000,000 (or its equivalent in other currencies), then at any time thereafter and during
continuance of such default the registered holder of any Security (or its proxy) may deliver or cause to be delivered to Financement-Québec and the Guarantor a written notice that such
registered holder elects to declare the principal amount of the Securities held by him (the serial number or numbers of the Securities which represent such Securities and the principal amount of the
Securities owned by him and the subject of such declaration being set forth in such notice) to be due and payable and, in the cases falling within either (a) or (c) above, on the 15th
day after delivery of such notice, or, in the cases falling within (b) above, on the 30th day after delivery of such notice, the principal of the Securities referred to in such notice plus
accrued interest thereon shall become due and payable, unless prior to that time all such defaults theretofore existing shall have been cured. 

6

 

Notices  

        All notices to the holders of Securities will be published in English [in London, England in The Financial
Times, in Luxembourg in the Luxembourger Wort (as long as the Securities are listed on the Luxembourg Stock
Exchange,] in New York, New York in The Wall Street Journal and in Toronto, Ontario, in The
Globe & Mail and in French in Montréal, Québec, in La Presse. If at any time publication in
any such newspaper is not practicable, notices will be valid if published in an English language newspaper, or, if in Québec, a French language newspaper, with general circulation in
the respective market regions as Financement-Québec, with the approval of the Fiscal Agent, shall determine. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once or on different dates, on the first date on which publication is made. 

Further Issues  

        Financement-Québec may from time to time without the consent of any holder of Securities create and issue further securities ranking equally in all
respects (or in all respects save for the first payment of interest thereon) and such further securities shall be consolidated and form a single series with the outstanding Securities. Any
further securities forming a single series with the outstanding Securities shall be issued with the benefit of, and subject to, an agreement supplemental to the Fiscal Agency Agreement. 

Prescription  

        Under current Québec law, Financement-Québec's obligation to make any payment on the Securities represented by this Global Security
shall be extinguished three years after the date such payment is due unless such right to payment is judicially exercised prior to the expiration of such three-year period. 

Modification  

        The Fiscal Agency Agreement and the Securities may be amended by Financement-Québec, the Guarantor and the Fiscal Agent without notice to, or the
consent of, the holder of any Security, for the purpose of (i) curing any ambiguity; (ii) curing, correcting or supplementing any defective provisions contained therein;
(iii) effecting the issue of further securities as described above under "Further Issues"; or (iv) in any other manner in which Financement-Québec and the Guarantor,
acting on the advice of independent counsel, may deem necessary or desirable and which will not be inconsistent with this Agreement or the Securities and which in the reasonable opinion of
Financement-Québec and the Guarantor, on the one hand, and the Fiscal Agent upon receiving an opinion of counsel satisfactory to the Fiscal Agent, on the other hand, will not adversely
affect the interests of the holders of Securities. 

        The
Fiscal Agency Agreement contains provisions for convening meetings of registered holders of Securities to modify or amend by Extraordinary Resolution (as defined in the Fiscal Agency
Agreement) the Fiscal Agency Agreement (except as provided in the immediately preceding paragraph) and the Securities (including the terms and 

7

 

conditions
thereof) or waive future compliance therewith or past default thereon by Financement-Québec. An Extraordinary Resolution duly passed at any such meeting shall be binding on
all holders of Securities, whether present or not; provided, however, that no such modification or amendment to the Fiscal Agency Agreement or to the
terms and conditions of the Securities may, without the consent of the holder of each such Security affected thereby: (a) change the stated maturity or the interest payment date of any such
Security; (b) reduce the principal amount of or rate of interest on any such Security; (c) change the currency of payment of any such Security; (d) impair the right to institute
suit for the enforcement of any payment on or with respect to such Security or the Guarantee; (e) reduce the percentage of the holders of Securities necessary to modify or amend the Fiscal
Agency Agreement or the terms and conditions of the Securities or reduce the percentage of votes required for the taking of action or the quorum required at any meeting of holders of Securities; or
(f) reduce the percentage of outstanding Securities necessary to waive any future compliance or past default. 

Governing Law  

        The Fiscal Agency Agreement and the Securities shall be construed in accordance with, and governed by, the laws of Québec and the laws of Canada
applicable therein. 

        Each
of Financement-Québec and the Guarantor irrevocably consents to the fullest extent permitted by law to the giving of any relief (including, without limitation, the
making, enforcement or execution against any property of any order or judgment) made or given in connection with any proceedings arising out of or in connection with the Fiscal Agency Agreement, the
Securities and the Guarantee. 

8

 

Executed
in The City of New York as of [                        ]. 

	

 	
 	
FINANCEMENT-QUÉBEC
	 	 	 	 	 
	 	 	By:	 	

	 	 	 	 	Name:

Title:

	

Authenticated by:
 JPMORGAN CHASE BANK, as Fiscal Agent	
 	

 
	 	 	 	 	 
	By:	 	
	 	 
	 	 	Name:

Title:	 	 

9

GUARANTEE BY QUÉBEC  

        By virtue of the powers conferred by the Parlement du Québec and of the authorization of the Gouvernement du Québec under Order in
Council No [                        ] dated
[                        ], adopted by the Gouvernement du Québec, as such Order in
Council may be further amended or replaced, Québec hereby irrevocably and unconditionally guarantees to the holder of the Global Security to which this guarantee is attached and pledges
its full faith and credit for the due and punctual payment of the principal of said Global Security and [premium, if any, and] the interest [and any Additional
Amounts] thereon upon default in payment by Financement-Québec, as and when the same shall respectively become due and payable (without taking into account any applicable
grace period or notice period set out in the terms and conditions of the Securities), whether at stated maturity, upon previous call for redemption or by acceleration or otherwise; and
Québec hereby expressly waives the benefits of discussion and division and any notice, protest, demand or previous claim. 

        This
Guarantee shall be construed in accordance with, and governed by, the laws of Québec and the laws of Canada applicable therein. 

        Québec
irrevocably consents to the fullest extent permitted by law to the giving of any relief (including, without limitation, the making or enforcement of any order or
judgment) made or given in connection with any proceedings arising out of or in connection with this Guarantee. 

        Executed
in The City of New York as of [                        ]. 

	

 	
 	
QUÉBEC
	 	 	 	 	 
	 	 	By:	 	

	 	 	 	 	Name:

Title:

SCHEDULE TO THE GLOBAL SECURITY

NO. [    ]
FINANCEMENT-QUÉBEC

[    ]% [                        ] SERIES [    ] DUE
[                        ]  

	Initial

Principal Amount
 
	 	Additional

Principal Amount
 
	 	Aggregate

Principal Amount
 
	 	Authorization
 

	U.S.$	 	U.S.$	 	U.S.$	 	 
	 	 	U.S.$	 	U.S.$	 	 
	 	 	U.S.$	 	U.S.$	 	 

QuickLinks

Exhibit 4.1Exhibit
4.5

 

 

 

FIRST COMMUNITY BANCORP,

as Issuer

 

 

INDENTURE

 

Dated as of August 15, 2003

 

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

 

FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST
DEBENTURES

 

 

DUE 2033

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I. DEFINITIONS

  
	
   

  
	
  Section 1.1.

  	
  Definitions

  
	
   

  	
   

  
	
  ARTICLE II. DEBENTURES

  
	
   

  
	
  Section 2.1.

  	
  Authentication and Dating

  
	
  Section 2.2.

  	
  Form of Trustee’s Certificate of
  Authentication

  
	
  Section 2.3.

  	
  Form and Denomination of Debentures

  
	
  Section 2.4.

  	
  Execution of Debentures

  
	
  Section 2.5.

  	
  Exchange and Registration of Transfer
  of Debentures

  
	
  Section 2.6.

  	
  Mutilated, Destroyed, Lost or Stolen
  Debentures

  
	
  Section 2.7.

  	
  Temporary Debentures

  
	
  Section 2.8.

  	
  Payment of Interest and Additional
  Interest

  
	
  Section 2.9.

  	
  Cancellation of Debentures Paid, etc

  
	
  Section 2.10.

  	
  Computation of Interest

  
	
  Section 2.11.

  	
  Extension of Interest Payment Period

  
	
  Section 2.12.

  	
  CUSIP Numbers

  
	
   

  	
   

  
	
  ARTICLE III. PARTICULAR COVENANTS OF
  THE COMPANY

  
	
   

  
	
  Section 3.1.

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

  
	
  Section 3.2.

  	
  Offices for Notices and Payments, etc

  
	
  Section 3.3.

  	
  Appointments to Fill Vacancies in Trustee’s
  Office

  
	
  Section 3.4.

  	
  Provision as to Paying Agent

  
	
  Section 3.5.

  	
  Certificate to Trustee

  
	
  Section 3.6.

  	
  Additional Sums

  
	
  Section 3.7.

  	
  Compliance with Consolidation Provisions

  
	
  Section 3.8.

  	
  Limitation on Dividends

  
	
  Section 3.9.

  	
  Covenants as to the Trust

  
	
  Section 3.10.

  	
  Additional Junior Indebtedness

  
	
   

  	
   

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

  
	
   

  
	
  Section 4.1.

  	
  Securityholders’ Lists

  
	
  Section 4.2.

  	
  Preservation and Disclosure of Lists

  
	
   

  	
   

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

  
	
   

  
	
  Section 5.1.

  	
  Events of Default

  
	
  Section 5.2.

  	
  Payment of Debentures on Default; Suit
  Therefor

  
	
  Section 5.3.

  	
  Application of Moneys Collected by Trustee

  
	
  Section 5.4.

  	
  Proceedings by Securityholders

  
	
  Section 5.5.

  	
  Proceedings by Trustee

  
	
  Section 5.6.

  	
  Remedies Cumulative and Continuing; Delay
  or Omission Not a Waiver

  
	
  Section 5.7.

  	
  Direction of Proceedings and Waiver of
  Defaults by Majority of Securityholders

  

 

i

 

	
  Section 5.8.

  	
  Notice of Defaults

  
	
  Section 5.9.

  	
  Undertaking to Pay Costs

  
	
   

  	
   

  
	
  ARTICLE VI. CONCERNING THE TRUSTEE

  
	
   

  
	
  Section 6.1.

  	
  Duties and Responsibilities of Trustee

  
	
  Section 6.2.

  	
  Reliance on Documents, Opinions, etc

  
	
  Section 6.3.

  	
  No Responsibility for Recitals, etc

  
	
  Section 6.4.

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

  
	
  Section 6.5.

  	
  Moneys to be Held in Trust

  
	
  Section 6.6.

  	
  Compensation and Expenses of Trustee

  
	
  Section 6.7.

  	
  Officers’ Certificate as Evidence

  
	
  Section 6.8.

  	
  Eligibility of Trustee

  
	
  Section 6.9.

  	
  Resignation or Removal of Trustee

  
	
  Section 6.10.

  	
  Acceptance by Successor Trustee

  
	
  Section 6.11.

  	
  Succession by Merger, etc

  
	
  Section 6.12.

  	
  Authenticating Agents

  
	
   

  	
   

  
	
  ARTICLE VII. CONCERNING THE
  SECURITYHOLDERS

  
	
   

  
	
  Section 7.1.

  	
  Action by Securityholders

  
	
  Section 7.2.

  	
  Proof of Execution by Securityholders

  
	
  Section 7.3.

  	
  Who Are Deemed Absolute Owners

  
	
  Section 7.4.

  	
  Debentures Owned by Company Deemed Not
  Outstanding

  
	
  Section 7.5.

  	
  Revocation of Consents; Future Holders
  Bound

  
	
   

  	
   

  
	
  ARTICLE VIII. SECURITYHOLDERS’
  MEETINGS

  
	
   

  
	
  Section 8.1.

  	
  Purposes of Meetings

  
	
  Section 8.2.

  	
  Call of Meetings by Trustee

  
	
  Section 8.3.

  	
  Call of Meetings by Company or
  Securityholders

  
	
  Section 8.4.

  	
  Qualifications for Voting

  
	
  Section 8.5.

  	
  Regulations

  
	
  Section 8.6.

  	
  Voting

  
	
  Section 8.7.

  	
  Quorum; Actions

  
	
   

  	
   

  
	
  ARTICLE IX. SUPPLEMENTAL INDENTURES

  
	
   

  
	
  Section 9.1.

  	
  Supplemental Indentures without Consent of
  Securityholders

  
	
  Section 9.2.

  	
  Supplemental Indentures with Consent of
  Securityholders

  
	
  Section 9.3.

  	
  Effect of Supplemental Indentures

  
	
  Section 9.4.

  	
  Notation on Debentures

  
	
  Section 9.5.

  	
  Evidence of Compliance of Supplemental
  Indenture to be Furnished to Trustee

  
	
   

  	
   

  
	
  ARTICLE X. REDEMPTION OF SECURITIES

  
	
   

  
	
  Section 10.1.

  	
  Optional Redemption

  
	
  Section 10.2.

  	
  Special Event Redemption

  
	
  Section 10.3.

  	
  Notice of Redemption; Selection of
  Debentures

  
	
  Section 10.4.

  	
  Payment of Debentures Called for
  Redemption

  

 

ii

 

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

  
	
   

  
	
  Section 11.1.

  	
  Company May Consolidate, etc., on Certain
  Terms

  
	
  Section 11.2.

  	
  Successor Entity to be Substituted

  
	
  Section 11.3.

  	
  Opinion of Counsel to be Given to Trustee

  
	
   

  	
   

  
	
  ARTICLE XII. SATISFACTION AND
  DISCHARGE OF INDENTURE

  
	
   

  
	
  Section 12.1.

  	
  Discharge of Indenture

  
	
  Section 12.2.

  	
  Deposited Moneys to be Held in Trust by
  Trustee

  
	
  Section 12.3.

  	
  Paying Agent to Repay Moneys Held

  
	
  Section 12.4.

  	
  Return of Unclaimed Moneys

  
	
   

  	
   

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

  
	
   

  
	
  Section 13.1.

  	
  Indenture and Debentures Solely Corporate
  Obligations

  
	
   

  	
   

  
	
  ARTICLE XIV. MISCELLANEOUS PROVISIONS

  
	
   

  
	
  Section 14.1.

  	
  Successors

  
	
  Section 14.2.

  	
  Official Acts by Successor Entity

  
	
  Section 14.3.

  	
  Surrender of Company Powers

  
	
  Section 14.4.

  	
  Addresses for Notices, etc

  
	
  Section 14.5.

  	
  Governing Law

  
	
  Section 14.6.

  	
  Evidence of Compliance with Conditions
  Precedent

  
	
  Section 14.7.

  	
  Table of Contents, Headings, etc

  
	
  Section 14.8.

  	
  Execution in Counterparts

  
	
  Section 14.9.

  	
  Separability

  
	
  Section 14.10.

  	
  Assignment

  
	
  Section 14.11.

  	
  Acknowledgment of Rights

  
	
   

  	
   

  
	
  ARTICLE XV. SUBORDINATION OF DEBENTURES

  
	
   

  
	
  Section 15.1.

  	
  Agreement to Subordinate

  
	
  Section 15.2.

  	
  Default on Senior Indebtedness

  
	
  Section 15.3.

  	
  Liquidation, Dissolution, Bankruptcy

  
	
  Section 15.4.

  	
  Subrogation

  
	
  Section 15.5.

  	
  Trustee to Effectuate Subordination

  
	
  Section 15.6.

  	
  Notice by the Company

  
	
  Section 15.7.

  	
  Rights of the Trustee; Holders of Senior
  Indebtedness

  
	
  Section 15.8.

  	
  Subordination May Not Be Impaired

  
	
   

  
	
  Exhibit
  A

  	
  Form
  of Floating Rate Junior Subordinated Deferrable Interest Debenture

  
			

 

iii

 

THIS
INDENTURE, dated as of August 15, 2003, between First Community Bancorp, a
California corporation (the “Company”), and U.S. Bank National
Association, a national banking association organized under the laws of the
United States of America, as debenture trustee (the “Trustee”).

 

WITNESSETH:

 

WHEREAS,
for its lawful corporate purposes, the Company has duly authorized the issuance
of its Floating Rate Junior Subordinated Deferrable Interest Debentures due
2033 (the “Debentures”) under this Indenture to provide, among other
things, for the execution and authentication, delivery and administration
thereof, and the Company has duly authorized the execution of this Indenture;
and

 

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

 

NOW,
THEREFORE, This Indenture Witnesseth:

 

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

 

ARTICLE I.

DEFINITIONS

 

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

 

“Additional
Interest” has the meaning set forth in Section 2.11.

 

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

 

1

 

“Additional
Sums” has the meaning set forth in Section 3.6.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Capital
Securities Guarantee” means the guarantee agreement that the Company enters
into with U.S. Bank National Association, as guarantee trustee, or other Persons
that operates directly or indirectly for the benefit of holders of Capital
Securities of the Trust.

 

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

 

2

 

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

 

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

 

“Company”
means First Community Bancorp, a California corporation, and, subject to the
provisions of Article XI, shall include its successors and assigns.

 

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

 

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

 

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

 

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

 

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

 

“Defaulted
Interest” has the meaning set forth in Section 2.8.

 

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

 

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

 

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

 

“Extension
Period” has the meaning set forth in Section 2.11.

 

“Federal
Reserve” means the Board of Governors of the Federal Reserve System, or its
designated district bank, as applicable, and any successor federal agency that
is primarily responsible for regulating the activities of bank holding
companies.

 

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

 

“Institutional
Trustee” has the meaning set forth in the Declaration.

 

“Interest
Payment Date” means March 17, June 17, September 17 and
December 17 of each year during the term of this Indenture, or if such day
is not a Business Day, then the next succeeding Business Day, commencing with
December 17, 2003.

 

“Interest
Rate” means for the period beginning on (and including) the date of
original issuance and ending on (but excluding) December 17, 2003 the rate
per annum of 4.23% and for each Distribution Period thereafter, the Coupon
Rate.

 

3

 

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

 

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

 

“Maturity
Date” means September 17, 2033.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Predecessor
Security” of any particular Debenture means every previous Debenture
evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for purposes of this

 

4

 

definition,
any Debenture authenticated and delivered under Section 2.6 in lieu of a
lost, destroyed or stolen Debenture shall be deemed to evidence the same debt
as the lost, destroyed or stolen Debenture.

 

“Principal
Office of the Trustee,” or other similar term, means the office of the
Trustee, at which at any particular time its corporate trust business shall be
principally administered, which at the time of the execution of this Indenture
shall be 225 Asylum Street, Goodwin Square, Hartford, Connecticut  06103.

 

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

 

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

 

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

 

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

 

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

 

“Senior
Indebtedness” means, with respect to the Company, (i) the principal,
premium, if any, and interest in respect of (A) indebtedness of the
Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company;
(ii) all capital lease obligations of the Company; (iii) all
obligations of the Company issued or assumed as the deferred purchase price of
property, all conditional sale obligations of the Company and all obligations
of the Company under any title retention agreement; (iv) all obligations
of the Company for the reimbursement of any letter of credit, any banker’s
acceptance, any security purchase facility, any repurchase agreement or similar
arrangement, any interest rate swap, any other hedging arrangement, any
obligation under options or any similar credit or other transaction;
(v) all obligations of the type referred to in clauses (i) through
(iv) above of other Persons for the payment of which the Company is responsible
or liable as obligor, guarantor or otherwise; and (vi) all obligations of
the type referred to in clauses (i) through (v) above of other Persons
secured by any lien on any property or asset of the Company (whether or not
such obligation is assumed by the Company), whether incurred on or prior to the
date of this Indenture or thereafter incurred. 
Notwithstanding the foregoing, “Senior Indebtedness” shall not include
(1) any Additional Junior Indebtedness, (2) Debentures issued pursuant
to this Indenture and guarantees in respect of such Debentures, (3) trade
accounts payable of the Company arising in the ordinary course of business
(such trade accounts payable being pari passu in right of payment to the
Debentures), or (4) obligations with respect to which (a) in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are pari passu, junior or
otherwise not superior in right of payment to the Debentures and (b) the
Company, prior to the issuance thereof, has notified (and, if then required
under the applicable guidelines of the regulating entity, has received approval
from) the Federal Reserve (if the Company is a bank holding company) or the OTS
(if the Company is a savings and loan holding company).  Senior Indebtedness shall continue to be
Senior

 

5

 

Indebtedness
and be entitled to the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.

 

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

 

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

 

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

 

	
  Special
  Redemption Date

  	
   

  	
  Special Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 17, 2003

  	
   

  	
  104.625

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 17, 2004

  	
   

  	
  104.300

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 17, 2004

  	
   

  	
  104.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 17, 2004

  	
   

  	
  103.650

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 17, 2004

  	
   

  	
  103.350

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 17, 2005

  	
   

  	
  103.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 17, 2005

  	
   

  	
  102.700

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 17, 2005

  	
   

  	
  102.350

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 17, 2005

  	
   

  	
  102.050

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 17, 2006

  	
   

  	
  101.700

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 17, 2006

  	
   

  	
  101.400

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 17, 2006

  	
   

  	
  101.050

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December 17, 2006

  	
   

  	
  100.750

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  March 17, 2007

  	
   

  	
  100.450

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 17, 2007

  	
   

  	
  100.200

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 17, 2007
  and thereafter

  	
   

  	
  100.000

  	
  %

  

 

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

 

6

 

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

 

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

 

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

 

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

 

“Trust”
shall mean First Community/CA Statutory Trust V, a Connecticut statutory
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debentures under this Indenture,
of which the Company is the sponsor.

 

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

 

“Trustee”
means U.S. Bank National Association, and, subject to the provisions of
Article VI hereof, shall also include its successors and assigns as
Trustee hereunder.

 

ARTICLE II.

DEBENTURES

 

Section 2.1.                                Authentication and
Dating.  Upon the execution and
delivery of this Indenture, or from time to time thereafter, Debentures in an
aggregate principal amount not in excess of $10,310,000.00 may be executed and
delivered by the Company to the Trustee for authentication, and the Trustee
shall thereupon authenticate and make available for delivery said Debentures to
or upon the written order of the Company, signed by its Chairman of the Board
of Directors, Chief Executive Officer, Vice Chairman, the President, one of its
Managing Directors or one of its Vice Presidents without any

 

7

 

further action by the Company hereunder.  In authenticating such Debentures, and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall
be fully protected in relying upon:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

U.S.
Bank National Association, as Trustee

 

	
  By

  	
   

  	
   

  
	
  Authorized Signer

  

 

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

 

8

 

distinguished in such manner or in accordance with such plans as the
officers executing the same may determine with the approval of the Trustee as
evidenced by the execution and authentication thereof.

 

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

 

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

 

Every
Debenture shall be dated the date of its authentication.

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR
OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S
INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN
MAY ACQUIRE OR HOLD THE SECURITIES OR ANY

 

10

 

INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS
PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING.  ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT
PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH
SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS
NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

 

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

 

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

 

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

 

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

 

Every
substituted Debenture issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any such Debenture is destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Debenture shall be found
at any time, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all

 

11

 

other
Debentures duly issued hereunder.  All
Debentures shall be held and owned upon the express condition that, to the
extent permitted by applicable law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.

 

Section 2.7.                                Temporary Debentures.  Pending
the preparation of definitive Debentures, the Company may execute and the
Trustee shall authenticate and make available for delivery temporary Debentures
that are typed, printed or lithographed. 
Temporary Debentures shall be issuable in any authorized denomination,
and substantially in the form of the definitive Debentures in lieu of which
they are issued but with such omissions, insertions and variations as may be
appropriate for temporary Debentures, all as may be determined by the
Company.  Every such temporary Debenture
shall be executed by the Company and be authenticated by the Trustee upon the
same conditions and in substantially the same manner, and with the same effect,
as the definitive Debentures.  Without
unreasonable delay the Company will execute and deliver to the Trustee or the
Authenticating Agent definitive Debentures and thereupon any or all temporary
Debentures may be surrendered in exchange therefor, at the principal corporate
trust office of the Trustee or at any office or agency maintained by the
Company for such purpose as provided in Section 3.2, and the Trustee or
the Authenticating Agent shall authenticate and make available for delivery in
exchange for such temporary Debentures a like aggregate principal amount of
such definitive Debentures.  Such
exchange shall be made by the Company at its own expense and without any charge
therefor except that in case of any such exchange involving a registration of
transfer the Company may require payment of a sum sufficient to cover any tax,
fee or other governmental charge that may be imposed in relation thereto.  Until so exchanged, the temporary Debentures
shall in all respects be entitled to the same benefits under this Indenture as
definitive Debentures authenticated and delivered hereunder.

 

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

 

Each
Debenture shall bear interest for the period beginning on (and including) the
date of original issuance and ending on (but excluding) December 17, 2003
at a rate per annum of 4.23%, and shall bear interest for each successive
period beginning on (and including) December 17, 2003, and each succeeding
Interest Payment Date, and ending on (but excluding) the next succeeding
Interest Payment Date (each, a “Distribution Period”) at a rate per
annum equal to the 3-Month LIBOR, determined as described in Section 2.10,
plus 3.10% (the “Coupon Rate”); provided, however, that
prior to September 17, 2008, the Coupon Rate shall not exceed 11.75%,
applied to the principal amount thereof, until the principal thereof becomes
due and payable, and on any overdue principal and to the extent that payment of
such interest is enforceable under applicable law (without duplication) on any
overdue installment of interest (including Additional Interest) at the Interest
Rate in effect for each applicable period compounded quarterly.  Interest shall be payable (subject to any
relevant Extension Period) quarterly in arrears on each Interest Payment Date
with the first installment of interest to be paid on December 17, 2003.

 

Any
interest on any Debenture, including Additional Interest, that is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called “Defaulted Interest”) shall forthwith cease to be payable
to the registered holder on the relevant regular record date by virtue of
having been such holder; and such Defaulted Interest shall be paid by the
Company to the Persons in

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2.10.                         Computation of Interest.  The
amount of interest payable on December 17, 2003 will be calculated by
applying the Interest Rate to the principal amount outstanding as of the date
hereof on the basis of the actual number of days elapsed from the date hereof
to (but not including) December 17, 2003 divided by 360.  The amount of interest payable for each
succeeding Distribution Period will be calculated by applying the Interest Rate
to the principal amount outstanding at the commencement of the Distribution
Period on the basis of the actual number of days in the Distribution

 

13

 

Period concerned divided by 360. 
All percentages resulting from any calculations on the Debentures will
be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655), and all
dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward)).

 

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

 

(1)                                  the
rate (expressed as a percentage per annum) for U.S. dollar deposits having a
three-month maturity that appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on the related Determination Date (as defined below).  “Telerate Page 3750” means the display
designated as “Page 3750” on the Dow Jones Telerate Service or such other page
as may replace Page 3750 on that service or such other service or services as
may be nominated by the British Bankers’ Association as the information vendor
for the purpose of displaying London interbank offered rates for U.S. dollar
deposits;

 

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

 

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

 

(4)                                  if
fewer than two such quotations are provided as requested in clause (3) above,
3-Month LIBOR will be a 3-Month LIBOR determined with respect to the
Distribution Period immediately preceding such current Distribution Period.

 

If the rate for U.S. dollar deposits having a
three-month maturity that initially appears on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date is superseded on the
Telerate Page 3750 by a corrected rate by 12:00 noon (London time) on such
Determination Date, then the corrected rate as so substituted on the applicable
page will be the applicable 3-Month LIBOR for such Determination Date.

 

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

 

(c)                                  “Determination
Date” means the date that is two London Banking Days (i.e., a business day
in which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the particular Distribution Period for which a
Coupon Rate is being determined.

 

(d)                                 The
Trustee shall notify the Company, the Institutional Trustee and any securities
exchange or interdealer quotation system on which the Capital Securities are
listed, of the Coupon Rate and the Determination Date for each Distribution
Period, in each case as soon as practicable after the determination thereof but
in no event later than the thirtieth (30th) day of the relevant Distribution
Period.  Failure to notify the Company,
the Institutional Trustee or any securities exchange or interdealer

 

14

 

quotation system, or any defect in said notice, shall not affect the
obligation of the Company to make payment on the Debentures at the applicable
Coupon Rate.  Any error in the
calculation of the Coupon Rate by the Trustee may be corrected at any time by
notice delivered as above provided. 
Upon the request of a holder of a Debenture, the Trustee shall provide
the Coupon Rate then in effect and, if determined, the Coupon Rate for the next
Distribution Period.

 

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

 

Section 2.11.                         Extension
of Interest Payment Period.  So
long as no Event of Default has occurred and is continuing, the Company shall
have the right, from time to time, and without causing an Event of Default, to
defer payments of interest on the Debentures by extending the interest payment
period on the Debentures at any time and from time to time during the term of
the Debentures, for up to 20 consecutive quarterly periods (each such extended
interest payment period, an “Extension Period”), during which Extension
Period no interest (including Additional Interest) shall be due and payable
(except any Additional Sums that may be due and payable).  No Extension Period may end on a date other
than an Interest Payment Date.  During
an Extension Period, interest will continue to accrue on the Debentures, and
interest on such accrued interest will accrue at an annual rate equal to the
Interest Rate in effect for such Extension Period, compounded quarterly from
the date such interest would have been payable were it not for the Extension
Period, to the extent permitted by law (such interest referred to herein as “Additional
Interest”).At the end of any such Extension Period the Company shall pay
all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date; provided  further,
however, that during any such Extension Period, the Company shall not
and shall not permit any Affiliate to (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s or such Affiliate’s capital stock (other
than payments of dividends or distributions to the Company) or make any
guarantee payments with respect to the foregoing or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company or any Affiliate that rank pari passu
in all respects with or junior in interest to the Debentures (other than, with
respect to clauses (i) or (ii) above, (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or
in connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(b) as a result of any exchange or conversion of any class or series of the
Company’s capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company’s capital stock or of any class or
series of the Company’s indebtedness for any class or series of the Company’s
capital stock, (c) the purchase of fractional interests in shares of the
Company’s capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholders’ rights plan, or
the issuance of rights, stock or other property under any stockholders’ rights
plan, or the redemption or repurchase of rights pursuant thereto, (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks

 

15

 

pari
passu with or junior to such stock and any cash payments in
lieu of fractional shares issued in connection therewith, or (f) payments under
the Capital Securities Guarantee). 
Prior to the termination of any Extension Period, the Company may
further extend such period, provided that such period together with all such
previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date.  Upon the termination of any Extension Period
and upon the payment of all accrued and unpaid interest and Additional
Interest, the Company may commence a new Extension Period, subject to the
foregoing requirements.  No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional
Interest to the extent permitted by applicable law.  The Company must give the Trustee notice of its election to begin
or extend an Extension Period at least 5 Business Days prior to the regular
record date (as such term is used in Section 2.8) immediately preceding
the Interest Payment Date with respect to which interest on the Debentures
would have been payable except for the election to begin or extend such
Extension Period.  The Trustee shall
give notice of the Company’s election to begin a new Extension Period to the
Securityholders.

 

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

 

ARTICLE III.

PARTICULAR COVENANTS OF THE COMPANY

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

Section 3.4.                                Provision
as to Paying Agent.

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3.6.                                Additional
Sums.  If and for so long as the
Trust is the holder of all Debentures and the Trust is required to pay any
additional taxes (including withholding taxes), duties, assessments or other
governmental charges as a result of a Tax Event, the Company will pay such
additional amounts (“Additional Sums”) on the Debentures as shall be
required so that the net amounts received and retained by the Trust after
paying taxes (including withholding taxes), duties, assessments or other
governmental charges will be equal to the amounts the Trust would have received
if no such taxes, duties, assessments or other governmental charges had been
imposed.  Whenever in this Indenture or
the Debentures there is a reference in any context to the payment of principal of
or interest on the Debentures, such mention shall be deemed to include mention
of payments of the Additional Sums provided for in this paragraph to the extent
that, in such context, Additional Sums are, were or would be payable in respect
thereof pursuant to the provisions of this paragraph and express mention of the
payment of Additional Sums (if applicable) in any provisions hereof shall not
be construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral
of the payment of interest during an Extension Period pursuant to
Section 2.11 shall not defer the payment of any Additional Sums that may
be due and payable.

 

18

 

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

 

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

 

Section 3.9.                                Covenants
as to the Trust.  For so long as
the Trust Securities remain outstanding, the Company shall maintain 100%
ownership of the Common Securities; provided, however, that any
permitted successor of the Company under this Indenture may succeed to the
Company’s ownership of such Common Securities. 
The Company, as owner of the Common Securities, shall, except in
connection with a distribution of Debentures to the holders of Trust Securities
in liquidation of the Trust, the redemption of all of the Trust Securities or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration, cause the Trust  (a) to
remain a statutory trust, (b) to otherwise continue to be classified as a
grantor trust for United States federal income tax purposes, and (c) to cause
each holder of Trust Securities to be treated as owning an undivided beneficial
interest in the Debentures.

 

Section 3.10.                         Additional
Junior Indebtedness.  The
Company shall not, and it shall not cause or permit any Subsidiary of the
Company to, incur, issue or be obligated on any Additional Junior Indebtedness,
either directly or indirectly, by way of guarantee, suretyship or otherwise,
other than Additional Junior Indebtedness (i) that, by its terms, is expressly
stated to be either junior and subordinate

 

19

 

or pari
passu in all respects to the Debentures, and (ii) of which the
Company has notified (and, if then required under the applicable guidelines of
the regulating entity, has received approval from) the Federal Reserve, if the
Company is a bank holding company, or the OTS, if the Company is a savings and
loan holding company.

 

ARTICLE IV.

SECURITYHOLDERS’ LISTS AND REPORTS

BY THE COMPANY AND THE TRUSTEE

 

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

 

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

 

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

 

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

 

Section 4.2.                                Preservation
and Disclosure of Lists.

 

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

 

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

 

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

 

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

 

If the Trustee shall elect not to afford such
applicants access to such information, the Trustee shall, upon the written
request of such applicants, mail to each Securityholder whose name and address
appear in the information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section 4.2 a copy of
the form of proxy or other communication which is specified

 

20

 

in such request with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission, if permitted or required by applicable law,
together with a copy of the material to be mailed, a written statement to the
effect that, in the opinion of the Trustee, such mailing would be contrary to
the best interests of the holders of all Debentures, as the case may be, or
would be in violation of applicable law. 
Such written statement shall specify the basis of such opinion.  If said Commission, as permitted or required
by applicable law, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order sustaining
one or more of such objections, said Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met and
shall enter an order so declaring, the Trustee shall mail copies of such
material to all such Securityholders with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.

 

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

 

ARTICLE V.

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

UPON AN EVENT OF DEFAULT

 

Section 5.1.                                Events
of Default.  “Event of Default,”
wherever used herein, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

 

(a)                                  the
Company defaults in the payment of any interest upon any Debenture when it
becomes due and payable, and fails to cure such default for a period of 30
days; provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms of this Indenture
shall not constitute a default in the payment of interest for this purpose; or

 

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

 

(c)                                  the
Company defaults in the performance of, or breaches, any of its covenants or
agreements in this Indenture or in the terms of the Debentures established as
contemplated in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this
Section specifically dealt with), and continuance of such default or
breach for a period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the holders of at least 25% in aggregate principal amount of the outstanding
Debentures, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a “Notice of Default” hereunder;
or

 

(d)                                 a
court of competent jurisdiction shall enter a decree or order for relief in
respect of the Company in an involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,

 

21

 

sequestrator (or similar official) of the Company or for any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or

 

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

 

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

 

If an Event of Default occurs and is continuing with
respect to the Debentures, then, and in each and every such case, unless the
principal of the Debentures shall have already become due and payable, either
the Trustee or the holders of not less than 25% in aggregate principal amount
of the Debentures then outstanding hereunder, by notice in writing to the
Company (and to the Trustee if given by Securityholders), may declare the
entire principal of the Debentures and the interest accrued thereon, if any, to
be due and payable immediately, and upon any such declaration the same shall
become immediately due and payable.

 

The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the Debentures shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, (i) the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Debentures
and the principal of and premium, if any, on the Debentures which shall have
become due otherwise than by acceleration (with interest upon such principal
and premium, if any, and Additional Interest) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, and all other amounts
due to the Trustee pursuant to Section 6.6, if any, and (ii) all Events of
Default under this Indenture, other than the non-payment of the principal of or
premium, if any, on Debentures which shall have become due by acceleration,
shall have been cured, waived or otherwise remedied as provided herein -- then
and in every such case the holders of a majority in aggregate principal amount
of the Debentures then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.

 

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

 

Section 5.2.                                Payment
of Debentures on Default; Suit Therefor. 
The Company covenants that upon the occurrence of an Event of
Default pursuant to Section 5.1(a) or Section 5.1(b) then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the

 

22

 

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

 

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

 

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

 

(ii)                                  in
case of any judicial proceedings, to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all other amounts due to the Trustee under
Section 6.6), and of the Securityholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Debentures, or
to the creditors or property of the Company or such other obligor, unless
prohibited by applicable law and regulations, to vote on behalf of the holders
of the Debentures in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or Person performing similar functions in comparable proceedings,

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding any other provisions in this
Indenture, however, the right of any holder of any Debenture to receive payment
of the principal of, premium, if any, and interest, on such Debenture when due,
or to institute suit for the enforcement of any such payment, shall not be
impaired or affected without the consent of such holder and by accepting a
Debenture hereunder it is expressly understood, intended and covenanted by the
taker and holder of every Debenture with every other such taker and holder and
the Trustee, that no one or more holders of Debentures shall have any right in
any manner whatsoever by virtue or by availing itself of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any
other Debentures, or to obtain or seek to obtain priority over or preference to
any other

 

24

 

such holder, or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures.  For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.

 

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

 

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

 

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

 

The holders of a majority in aggregate principal
amount of the Debentures at the time outstanding may on behalf of the holders
of all of the Debentures waive (or modify any previously granted waiver of) any
past default or Event of Default, and its consequences, except a default (a) in
the payment of principal of, premium, if any, or interest on any of the
Debentures, (b) in respect of covenants or provisions hereof which cannot be
modified or amended without the consent of the holder of each Debenture
affected, or (c) in respect of the covenants contained in Section 3.9; provided,
however, that if the Debentures are held by the Trust or a trustee of
such trust, such waiver or modification to such waiver shall not be effective
until the holders of a majority in Liquidation Amount of Trust Securities of
the Trust shall have consented to such waiver or modification to such waiver, provided,
further, that if the consent of the holder of each outstanding Debenture
is required, such waiver shall not be effective until each holder of the Trust
Securities of the Trust shall have consented to such waiver.  Upon any such waiver, the default covered
thereby shall be deemed to be cured for all purposes of this Indenture and the
Company, the Trustee and the holders of the Debentures shall be restored to
their former positions and rights hereunder,

 

25

 

respectively; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.  Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section, said default or
Event of Default shall for all purposes of the Debentures and this Indenture be
deemed to have been cured and to be not continuing.

 

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

 

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

 

ARTICLE VI.

CONCERNING THE TRUSTEE

 

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

 

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

 

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

 

(1)                                  the
duties and obligations of the Trustee with respect to Debentures shall be
determined solely by the express provisions of this Indenture, and the Trustee
shall not be liable except for the performance of such duties and obligations
with respect to the

 

26

 

Debentures as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee, and

 

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

 

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

 

(c)                                  the
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith, in accordance with the direction of the
Securityholders pursuant to Section 5.7, relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture.

 

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

 

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

 

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

 

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

 

(c)                                  the
Trustee may consult with counsel of its selection and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;

 

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

 

(e)                                  the
Trustee shall not be liable for any action taken or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to the Debentures (that has not been cured or waived)
to

 

27

 

exercise with respect to Debentures such of the rights and powers
vested in it by this Indenture, and to use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;

 

(f)                                    the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, coupon or other
paper or document, unless requested in writing to do so by the holders of not
less than a majority in aggregate principal amount of the outstanding
Debentures affected thereby; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expense or liability as a condition to so
proceeding;

 

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

 

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

 

Section 6.3.                                No
Responsibility for Recitals, etc.  The
recitals contained herein and in the Debentures (except in the certificate of
authentication of the Trustee or the Authenticating Agent) shall be taken as
the statements of the Company, and the Trustee and the Authenticating Agent
assume no responsibility for the correctness of the same.  The Trustee and the Authenticating Agent
make no representations as to the validity or sufficiency of this Indenture or
of the Debentures.  The Trustee and the
Authenticating Agent shall not be accountable for the use or application by the
Company of any Debentures or the proceeds of any Debentures authenticated and
delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture.

 

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

 

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

 

Section 6.6.                                Compensation
and Expenses of Trustee.  The
Company covenants and agrees to pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture (including
the

 

28

 

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

 

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

 

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

 

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

 

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

 

Section 6.8.                                Eligibility
of Trustee.  The Trustee
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or any state or territory
thereof or of the District of Columbia or a corporation or other Person
authorized under such laws to exercise corporate trust powers, having (or whose
obligations under this Indenture are guaranteed by an affiliate having) a
combined capital and surplus of at least 50 million U.S. dollars
($50,000,000.00) and subject to supervision or examination by federal, state,
territorial, or District of Columbia authority.  If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section 6.8 the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent records of
condition so published.

 

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

 

29

 

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

 

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

 

Section 6.9.                                Resignation
or Removal of Trustee

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)                                  Upon
prior written notice to the Company and the Trustee, the holders of a majority
in aggregate principal amount of the Debentures at the time outstanding may at
any time remove the Trustee and nominate a successor Trustee, which shall be
deemed appointed as successor Trustee unless within 10

 

30

 

Business Days after such nomination the Company objects thereto, in
which case, or in the case of a failure by such holders to nominate a successor
Trustee, the Trustee so removed or any Securityholder, upon the terms and
conditions and otherwise as in subsection (a) of this Section 6.9
provided, may petition any court of competent jurisdiction for an appointment
of a successor.

 

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

 

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

 

If a successor Trustee is appointed, the Company, the
retiring Trustee and the successor Trustee shall execute and deliver an
indenture supplemental hereto which shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debentures as to which
the predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the Trust hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee.

 

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

 

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

 

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

 

Section 6.11.                         Succession
by Merger, etc.  Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee

 

31

 

hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided such corporation
shall be otherwise eligible and qualified under this Article.

 

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

 

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

 

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

 

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

 

32

 

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

 

ARTICLE VII.

CONCERNING THE SECURITYHOLDERS

 

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

 

If the Company shall solicit from the Securityholders
any request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same, the Company may, at its option, as evidenced
by an Officers’ Certificate, fix in advance a record date for such Debentures
for the determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, but the Company shall have no obligation to do so.  If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same may be given before or after the record date,
but only the Securityholders of record at the close of business on the record
date shall be deemed to be Securityholders for the purposes of determining
whether Securityholders of the requisite proportion of outstanding Debentures
have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action or revocation of the same,
and for that purpose the outstanding Debentures shall be computed as of the
record date; provided, however, that no such authorization,
agreement or consent by such Securityholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than 6 months after the record date.

 

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

 

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

 

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

 

33

 

any holder for the time being or upon his order shall be valid, and, to
the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Debenture.

 

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

 

Section 7.5.                                Revocation
of Consents; Future Holders Bound.  At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the holders of the percentage
in aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder (in cases where no record date has been
set pursuant to Section 7.1) or any holder as of an applicable record date
(in cases where a record date has been set pursuant to Section 7.1) of a
Debenture (or any Debenture issued in whole or in part in exchange or
substitution therefor) the serial number of which is shown by the evidence to
be included in the Debentures the holders of which have consented to such
action may, by filing written notice with the Trustee at the Principal Office
of the Trustee and upon proof of holding as provided in Section 7.2,
revoke such action so far as concerns such Debenture (or so far as concerns the
principal amount represented by any exchanged or substituted Debenture).  Except as aforesaid any such action taken by
the holder of any Debenture shall be conclusive and binding upon such holder
and upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange or substitution therefor or on registration of transfer
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture or any Debenture issued in exchange or substitution
therefor.

 

ARTICLE VIII.

SECURITYHOLDERS’ MEETINGS

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

Section 8.4.                                Qualifications
for Voting.  To be entitled to
vote at any meeting of Securityholders a Person shall (a) be a holder of one or
more Debentures with respect to which the meeting is being held or (b) a Person
appointed by an instrument in writing as proxy by a holder of one or more such
Debentures.  The only Persons who shall
be entitled to be present or to speak at any meeting of Securityholders shall
be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.

 

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

 

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

 

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

 

35

 

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

 

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

 

Section 8.7.                                Quorum;
Actions.  The Persons entitled
to vote a majority in principal amount of the Debentures then outstanding shall
constitute a quorum for a meeting of Securityholders; provided, however,
that if any action is to be taken at such meeting with respect to a consent,
waiver, request, demand, notice, authorization, direction or other action which
may be given by the holders of not less than a specified percentage in
principal amount of the Debentures then outstanding, the Persons holding or
representing such specified percentage in principal amount of the Debentures
then outstanding will constitute a quorum. 
In the absence of a quorum within 30 minutes of the time appointed for
any such meeting, the meeting shall, if convened at the request of
Securityholders, be dissolved.  In any
other case the meeting may be adjourned for a period of not less than 10 days
as determined by the permanent chairman of the meeting prior to the adjournment
of such meeting.  In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the permanent
chairman of the meeting prior to the adjournment of such adjourned
meeting.  Notice of the reconvening of
any adjourned meeting shall be given as provided in Section 8.2, except
that such notice need be given only once not less than 5 days prior to the date
on which the meeting is scheduled to be reconvened.  Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Debentures then outstanding which shall constitute a quorum.

 

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

 

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

 

36

 

ARTICLE IX.

SUPPLEMENTAL INDENTURES

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

The Trustee is hereby authorized to join with the
Company in the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations which may be

 

37

 

therein contained and to accept the conveyance, transfer and assignment
of any property thereunder, but the Trustee shall not be obligated to, but may
in its discretion, enter into any such supplemental indenture which affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

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

 

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

 

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

 

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

 

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

 

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

 

38

 

modifications and amendments and all the terms and conditions of any
such supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

 

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

 

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

 

ARTICLE X.

REDEMPTION OF SECURITIES

 

Section 10.1.                         Optional
Redemption.  The Company shall
have the right (subject to the receipt by the Company of prior approval (i) if
the Company is a bank holding company, from the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal Reserve
or (ii) if the Company is a savings and loan holding company, from the OTS, if
then required under applicable capital guidelines or policies of the OTS) to
redeem the Debentures, in whole or in part, but in all cases in a principal
amount with integral multiples of $1,000.00, on any Interest Payment Date on or
after September 17, 2008 (the “Redemption Date”), at the Redemption
Price.

 

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

 

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

 

Each such notice of redemption shall specify the CUSIP
number, if any, of the Debentures to be redeemed, the Redemption Date or the
Special Redemption Date, as applicable, the Redemption Price or the Special
Redemption Price, as applicable, at which Debentures are to be redeemed, the
place or places

 

39

 

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

 

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

 

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

 

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

 

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

 

ARTICLE XI.

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

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

 

40

 

shall be expressly assumed by supplemental indenture satisfactory in
form to the Trustee executed and delivered to the Trustee by the entity formed
by such consolidation, or into which the Company shall have been merged, or by
the entity which shall have acquired such property or capital stock.

 

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

 

Section 11.3.                         Opinion
of Counsel to be Given to Trustee.  The
Trustee, subject to the provisions of Sections 6.1 and 6.2, shall receive, in
addition to the Opinion of Counsel required by Section 9.5, an Opinion of
Counsel as conclusive evidence that any consolidation, merger, sale,
conveyance, transfer or other disposition, and any assumption, permitted or
required by the terms of this Article XI complies with the provisions of
this Article XI.

 

ARTICLE XII.

SATISFACTION AND DISCHARGE OF INDENTURE

 

Section 12.1.                         Discharge
of Indenture.  When

 

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

 

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

 

41

 

accordance with the provisions of Section 12.4,
or (2) paid to any state or to the District of Columbia pursuant to its
unclaimed property or similar laws,

 

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

 

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

 

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

 

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

 

ARTICLE XIII.

IMMUNITY OF INCORPORATORS, STOCKHOLDERS,

OFFICERS AND DIRECTORS

 

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

 

42

 

ARTICLE XIV.

MISCELLANEOUS PROVISIONS

 

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

 

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

 

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

 

Section 14.4.                         Addresses
for Notices, etc.  Any notice,
consent, direction, request, authorization, waiver or demand which by any
provision of this Indenture is required or permitted to be given, made,
furnished or served by the Trustee or by the Securityholders on or to the
Company may be given or served in writing by being deposited postage prepaid by
registered or certified mail in a post office letter box addressed (until
another address is filed by the Company, with the Trustee for the purpose) to
the Company, 275 North Brea Boulevard, Brea, California  92821, Attention:  Lynn M. Hopkins.  Any
notice, consent, direction, request, authorization, waiver or demand by any
Securityholder or the Company to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing
at the office of the Trustee, addressed to the Trustee, 225 Asylum Street,
Goodwin Square, Hartford, Connecticut 
06103 Attention: Vice President, Corporate Trust Services Division, with
a copy to the Trustee, 1 Federal Street – 3rd Floor, Boston, Massachusetts  02110, Attention:  Paul D. Allen, Corporate Trust Services Division.  Any notice, consent, direction, request,
authorization, waiver or demand on or to any Securityholder shall be deemed to
have been sufficiently given or made, for all purposes, if given or made in
writing at the address set forth in the Debenture Register.

 

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

 

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

 

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

 

43

 

statement as to whether or not in the opinion of such person, such
condition or covenant has been complied with.

 

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

 

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

 

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

 

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

 

Section 14.11.                  Acknowledgment
of Rights.  The Company agrees
that, with respect to any Debentures held by the Trust or the Institutional
Trustee of the Trust, if the Institutional Trustee of the Trust fails to
enforce its rights under this Indenture as the holder of Debentures held as the
assets of such Trust after the holders of a majority in Liquidation Amount of
the Capital Securities of such Trust have so directed such Institutional
Trustee, a holder of record of such Capital Securities may, to the fullest
extent permitted by law, institute legal proceedings directly against the
Company to enforce such Institutional Trustee’s rights under this Indenture
without first instituting any legal proceedings against such trustee or any
other Person.  Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest (or premium, if
any) or principal on the Debentures on the date such interest (or premium, if
any) or principal is otherwise payable (or in the case of redemption, on the
redemption date), the Company agrees that a holder of record of Capital
Securities of the Trust may directly institute a proceeding against the Company
for enforcement of payment to such holder directly of the principal of (or
premium, if any) or interest on the Debentures having an aggregate principal
amount equal to the aggregate Liquidation Amount of the Capital Securities of
such holder on or after the respective due date specified in the Debentures.

 

ARTICLE XV.

SUBORDINATION OF DEBENTURES

 

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

 

The payment by the Company of the principal of, and
premium, if any, and interest on all Debentures shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right

 

44

 

of payment to the prior payment in full of all Senior Indebtedness of
the Company, whether outstanding at the date of this Indenture or thereafter
incurred; provided, however, that the Debentures shall rank pari passu
in right of payment with the Company’s Fixed Rate Junior Subordinated
Deferrable Interest Debentures due September 7, 2030 issued pursuant to an
Indenture dated as of September 7, 2000 by and between the Company and
State Street Bank and Trust Company of Connecticut, N.A.; the Company’s Floating
Rate Junior Subordinated Deferrable Interest Debentures due December 8,
2031 issued pursuant to an Indenture dated as of November 28, 2001 by and
between the Company and Wilmington Trust Company; the Company’s Floating Rate
Junior Subordinated Deferrable Interest Debentures due 2031 issued pursuant to
an Indenture dated as of December 18, 2001 by and between the Company and
State Street Bank and Trust Company of Connecticut, N.A.; and the Company’s
Junior Subordinated Deferrable Interest Debentures due June 26, 2032
issued pursuant to an Indenture dated as of June 26, 2002 by and between
the Company and State Street Bank and Trust Company of Connecticut, N.A.

 

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

 

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

 

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

 

Section 15.3.                         Liquidation,
Dissolution, Bankruptcy.  Upon
any payment by the Company or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness of the Company
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company, on
account of the principal (and premium, if any) or interest on the
Debentures.  Upon any such dissolution
or winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Securityholders or the Trustee would
be entitled to receive from the Company, except for the provisions of this
Article XV, shall be paid by the Company, or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Securityholders or by the Trustee under this Indenture
if received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full, in

 

45

 

money or money’s worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.

 

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

 

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

 

Section 15.4.                         Subrogation.  Subject to the payment in full of all
Senior Indebtedness, the Securityholders shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Debentures shall be paid in full.  For
the purposes of such subrogation, no payments or distributions to the holders
of such Senior Indebtedness of any cash, property or securities to which the
Securityholders or the Trustee would be entitled except for the provisions of
this Article XV, and no payment over pursuant to the provisions of this
Article XV to or for the benefit of the holders of such Senior
Indebtedness by Securityholders or the Trustee, shall, as between the Company,
its creditors other than holders of Senior Indebtedness of the Company, and the
holders of the Debentures be deemed to be a payment or distribution by the
Company to or on account of such Senior Indebtedness.  It is understood that the provisions of this Article XV are
and are intended solely for the purposes of defining the relative rights of the
holders of the Securities, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.

 

Nothing contained in this Article XV or elsewhere
in this Indenture or in the Debentures is intended to or shall impair, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Debentures, the obligation of the Company,
which is absolute and unconditional, to pay to the holders of the Debentures
the principal of (and premium, if any) and interest on the Debentures as and
when the same shall become due and payable in accordance with their terms, or

 

46

 

is intended to or shall affect the relative rights of the holders of
the Debentures and creditors of the Company, other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article XV of the holders of such Senior Indebtedness in
respect of cash, property or securities of the Company, received upon the
exercise of any such remedy.

 

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

 

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

 

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

 

The Trustee, subject to the provisions of
Article VI of this Indenture, shall be entitled to conclusively rely on
the delivery to it of a written notice by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee or representative on behalf of such
holder), to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of any such holder
or holders.  In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XV,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and any other facts pertinent to the rights of
such Person under this Article XV, and, if such evidence is

 

47

 

not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.

 

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

 

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

 

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

 

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

 

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

 

Signatures appear on the following page

 

48

 

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

 

	
   

  	
  FIRST COMMUNITY BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Lynn M. Hopkins

  	
   

  
	
   

  	
   

  	
  Name:

  	
  LYNN M. HOPKINS

  
	
   

  	
   

  	
  Title:

  	
  EVP, CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Paul D. Allen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paul D. Allen

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					

 

49

 

 

EXHIBIT
A

 

FORM OF FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST
DEBENTURE

 

[FORM OF FACE OF
SECURITY]

 

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

 

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

 

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

 

A-1

 

SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT
TO SUCH PURCHASE OR HOLDING.  ANY
PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO
HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT
AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A
PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER
PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER
PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO
FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

 

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

 

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

 

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

 

Floating Rate Junior
Subordinated Deferrable Interest Debenture

 

of

 

First Community Bancorp

 

August 15, 2003

 

First Community Bancorp, a California corporation (the
“Company” which term includes any successor Person under the Indenture
hereinafter referred to), for value received promises to pay to U.S. Bank
National Association, not in its individual capacity but solely as
Institutional Trustee for First Community/CA Statutory Trust V (the “Holder”)
or registered assigns, the principal sum of ten million three hundred ten
thousand dollars ($10,310,000.00) on September 17, 2033, and to pay
interest on said principal sum from August 15, 2003, or from the most recent
interest payment date (each such date, an “Interest Payment Date”) to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 17, June 17, September 17
and December 17 of each year (or if such day is not a Business Day, then
the next succeeding Business Day) commencing on December 17, 2003, at an
annual rate equal to 4.23% beginning on (and including) the date of original
issuance and ending on (but excluding) December 17, 2003 and at an annual
rate for each successive period beginning on (and including) December 17,
2003, and each succeeding Interest Payment Date, and ending on (but excluding)
the next succeeding Interest Payment Date (each a “Distribution Period”), equal
to 3-Month LIBOR, determined as described below, plus 3.10% (the “Coupon
Rate”); provided, however, that prior to September 17, 2008,
the Coupon Rate shall not exceed 11.75%, applied to the principal amount
hereof, until the principal hereof is paid or duly provided for or made
available for payment, and on any overdue principal and (without duplication
and to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest (including Additional

 

A-2

 

Interest) at the Interest Rate in effect for each applicable period,
compounded quarterly, from the dates such amounts are due until they are paid
or made available for payment.  The
amount of interest payable for any period will be computed on the basis of the
actual number of days in the Distribution Period concerned divided by 360.  In the event that any date on which interest
is payable on this Debenture is not a Business Day, then a payment of the
interest payable on such date will be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date the
payment was originally payable.  The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such
interest installment, which shall be fifteen days prior to the day on which the
relevant Interest Payment Date occurs. 
Any such interest installment not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such regular record
date and may be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on a special
record date.

 

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

 

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

 

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

 

A-3

 

dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward)).

 

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

 

So long as no Event of Default has occurred and is
continuing, the Company shall have the right, from time to time, and without
causing an Event of Default, to defer payments of interest on the Debentures by
extending the interest payment period on the Debentures at any time and from
time to time during the term of the Debentures, for up to 20 consecutive
quarterly periods (each such extended interest payment period, an “Extension
Period”), during which Extension Period no interest (including Additional Interest)
shall be due and payable (except any Additional Sums that may be due and
payable).  No Extension Period may end
on a date other than an Interest Payment Date. 
During an Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest will accrue at an annual rate
equal to the Interest Rate in effect for such Extension Period, compounded
quarterly from the date such interest would have been payable were it not for
the Extension Period, to the extent permitted by law (such interest referred to
herein as “Additional Interest”).  At
the end of any such Extension Period the Company shall pay all interest then
accrued and unpaid on the Debentures (together with Additional Interest
thereon); provided, however, that no Extension Period may extend
beyond the Maturity Date; provided  further, however, that
during any such Extension Period, the Company shall not and shall not permit
any Affiliate to engage in any of the activities or transactions described on
the reverse side hereof and in the Indenture. 
Prior to the termination of any Extension Period, the Company may
further extend such period, provided that such period together with all such
previous and further consecutive extensions thereof shall not exceed 20 consecutive
quarterly periods, or extend beyond the Maturity Date.  Upon the termination of any Extension Period
and upon the payment of all accrued and unpaid interest and Additional
Interest, the Company may commence a new Extension Period, subject to the foregoing
requirements.  No interest or Additional
Interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due
and payable during such Extension Period shall bear Additional Interest.  The Company must give the Trustee notice of
its election to begin or extend an Extension Period at least 5 Business Days
prior to the regular record date (as such term is used in Section 2.8 of
the Indenture) immediately preceding the Interest Payment Date with respect to
which interest on the Debentures would have been payable except for the
election to begin or extend such Extension Period.

 

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

 

A-4

 

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

 

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

 

A-5

 

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

 

	
   

  	
  FIRST COMMUNITY BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

CERTIFICATE OF
AUTHENTICATION

 

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

 

	
   

  	
  U.S. Bank National Association, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Authorized Officer

  	
   

  

 

A-6

 

[FORM OF REVERSE OF
DEBENTURE]

 

This Debenture is one of the floating rate junior
subordinated deferrable interest debentures of the Company, all issued or to be
issued under and pursuant to the Indenture dated as of August 15, 2003
(the “Indenture”), duly executed and delivered between the Company and the
Trustee, to which Indenture reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Trustee, the Company and the holders of the Debentures.  The Debentures are limited in aggregate
principal amount as specified in the Indenture.

 

Upon the occurrence and continuation of a Special
Event prior to September 17, 2008, the Company shall have the right to
redeem the Debentures in whole, but not in part, at any Interest Payment Date,
within 120 days following the occurrence of such Special Event, at the Special
Redemption Price.

 

In addition, the Company shall have the right to
redeem the Debentures, in whole or in part, but in all cases in a principal
amount with integral multiples of $1,000.00, on any Interest Payment Date on or
after September 17, 2008, at the Redemption Price.

 

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

 

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

 

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

 

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

 

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

 

The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Debentures at the
time outstanding on behalf of the holders of all of the Debentures to

 

A-7

 

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

 

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

 

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

 

A-8

 

cash payments in lieu of fractional shares issued in connection
therewith, or (6) payments under the Capital Securities Guarantee).

 

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

 

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

 

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

 

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

 

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

 

A-9

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