Document:

Exhibit 4.3

 

 

 

 

AMENDED
AND RESTATED DECLARATION

OF TRUST

 

by and
among

 

WILMINGTON
TRUST COMPANY,

as
Delaware Trustee,

 

WILMINGTON
TRUST COMPANY,

as
Institutional Trustee,

 

FIRST
REGIONAL BANCORP,

as
Sponsor,

 

and

 

JACK A.
SWEENEY, H. ANTHONY GARTSHORE and

THOMAS
MCCULLOUGH,

as
Administrators,

 

Dated as
of September 28, 2005

 

 

 

 

 

TABLE OF
CONTENTS

 

 

	
  ARTICLE I INTERPRETATION AND
  DEFINITIONS

  	
   

  
	
  Section 1.1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II ORGANIZATION

  	
   

  
	
  Section 2.1.

  	
  Name

  	
   

  
	
  Section 2.2.

  	
  Office

  	
   

  
	
  Section 2.3.

  	
  Purpose

  	
   

  
	
  Section 2.4.

  	
  Authority

  	
   

  
	
  Section 2.5.

  	
  Title to Property of the
  Trust

  	
   

  
	
  Section 2.6.

  	
  Powers and Duties of the
  Trustees and the Administrators

  	
   

  
	
  Section 2.7.

  	
  Prohibition of Actions by the Trust and the
  Institutional Trustee

  	
   

  
	
  Section 2.8.

  	
  Powers and Duties of the
  Institutional Trustee

  	
   

  
	
  Section 2.9.

  	
  Certain Duties and Responsibilities of the Trustees
  and Administrators

  	
   

  
	
  Section 2.10.

  	
  Certain Rights of Institutional Trustee

  	
   

  
	
  Section 2.11.

  	
  Delaware Trustee

  	
   

  
	
  Section 2.12.

  	
  Execution of Documents

  	
   

  
	
  Section 2.13.

  	
  Not Responsible for Recitals or Issuance of
  Securities

  	
   

  
	
  Section 2.14.

  	
  Duration of Trust

  	
   

  
	
  Section 2.15.

  	
  Mergers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III SPONSOR

  	
   

  
	
  Section 3.1.

  	
  Sponsor’s Purchase of Common Securities

  	
   

  
	
  Section 3.2.

  	
  Responsibilities of the Sponsor

  	
   

  
	
  Section 3.3.

  	
  Expenses

  	
   

  
	
  Section 3.4.

  	
  Right to Proceed

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV INSTITUTIONAL TRUSTEE AND
  ADMINISTRATORS

  	
   

  
	
  Section 4.1.

  	
  Number of Trustees

  	
   

  
	
  Section 4.2.

  	
  Delaware Trustee; Eligibility

  	
   

  
	
  Section 4.3.

  	
  Institutional Trustee; Eligibility

  	
   

  
	
  Section 4.4.

  	
  Administrators

  	
   

  
	
  Section 4.5.

  	
  Appointment, Removal and Resignation of Trustees
  and Administrators

  	
   

  
	
  Section 4.6.

  	
  Vacancies Among Trustees

  	
   

  
	
  Section 4.7.

  	
  Effect of Vacancies

  	
   

  
	
  Section 4.8.

  	
  Meetings of the Trustees and the Administrators

  	
   

  
	
  Section 4.9.

  	
  Delegation of Power

  	
   

  
	
  Section 4.10.

  	
  Conversion, Consolidation or Succession to
  Business

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V DISTRIBUTIONS

  	
   

  
	
  Section 5.1.

  	
  Distributions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI ISSUANCE OF SECURITIES

  	
   

  
	
  Section 6.1.

  	
  General Provisions Regarding Securities

  	
   

  
	
  Section 6.2.

  	
  Paying Agent, Transfer Agent and
  Registrar

  	
   

  
	
  Section 6.3.

  	
  Form and Dating

  	
   

  
	
  Section 6.4.

  	
  Book-Entry Capital Securities

  	
   

  
	
  Section 6.5.

  	
  Mutilated, Destroyed, Lost or
  Stolen Certificates

  	
   

  

 

i

 

	
  Section 6.6.

  	
  Temporary Securities

  	
   

  
	
  Section 6.7.

  	
  Cancellation

  	
   

  
	
  Section 6.8.

  	
  CUSIP Numbers

  	
   

  
	
  Section 6.9.

  	
  Rights of Holders; Waivers of Past
  Defaults

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  DISSOLUTION AND TERMINATION OF TRUST

  	
   

  
	
  Section 7.1.

  	
  Dissolution and Termination of
  Trust

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TRANSFER
  OF INTERESTS

  	
   

  
	
  Section 8.1.

  	
  General

  	
   

  
	
  Section 8.2.

  	
  Transfer Procedures and
  Restrictions

  	
   

  
	
  Section 8.3.

  	
  Deemed Security Holders

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  
	
  Section 9.1.

  	
  Liability

  	
   

  
	
  Section 9.2.

  	
  Exculpation

  	
   

  
	
  Section 9.3.

  	
  Fiduciary Duty

  	
   

  
	
  Section 9.4.

  	
  Indemnification

  	
   

  
	
  Section 9.5.

  	
  Outside Businesses

  	
   

  
	
  Section 9.6.

  	
  Compensation; Fee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X ACCOUNTING

  	
   

  
	
  Section 10.1.

  	
  Fiscal Year

  	
   

  
	
  Section 10.2.

  	
  Certain Accounting Matters

  	
   

  
	
  Section 10.3.

  	
  Banking

  	
   

  
	
  Section 10.4.

  	
  Withholding

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI AMENDMENTS
  AND MEETINGS

  	
   

  
	
  Section 11.1.

  	
  Amendments

  	
   

  
	
  Section 11.2.

  	
  Meetings of the Holders of
  Securities; Action by Written Consent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII
  REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE

  	
   

  
	
  Section 12.1.

  	
  Representations and Warranties of
  Institutional Trustee

  	
   

  
	
  Section 12.2.

  	
  Representations of the Delaware
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  MISCELLANEOUS

  	
   

  
	
  Section 13.1.

  	
  Notices

  	
   

  
	
  Section 13.2.

  	
  Governing Law

  	
   

  
	
  Section 13.3.

  	
  Intention of the Parties

  	
   

  
	
  Section 13.4.

  	
  Headings

  	
   

  
	
  Section 13.5.

  	
  Successors and Assigns

  	
   

  
	
  Section 13.6.

  	
  Partial Enforceability

  	
   

  
	
  Section 13.7.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I

  	
  Terms of Securities

  	
   

  
	
  Exhibit A-1

  	
  Form of Capital Security
  Certificate

  	
   

  
	
  Exhibit A-2

  	
  Form of Common Security
  Certificate

  	
   

  
	
  Exhibit B

  	
  Specimen of Initial Debenture

  	
   

  
	
  Exhibit C

  	
  Placement Agreement

  	
   

  

 

ii

 

AMENDED
AND RESTATED

 

DECLARATION
OF TRUST

 

OF

 

FIRST
REGIONAL STATUTORY TRUST V

 

September 28,
2005

 

AMENDED AND RESTATED DECLARATION OF TRUST (“Declaration”)
dated and effective as of September 28, 2005, by the Trustees (as defined
herein), the Administrators (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided beneficial interests
in the Trust (as defined herein) to be issued pursuant to this Declaration;

 

WHEREAS, the Trustees, the Administrators and the
Sponsor established First Regional Statutory Trust V (the “Trust”),
a statutory trust under the Statutory Trust Act (as defined herein) pursuant to
a Declaration of Trust dated as of September 20, 2005 (the “Original
Declaration”), and a Certificate of Trust filed with the Secretary of State
of the State of Delaware on September 20, 2005, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain debentures of the Debenture Issuer (as defined herein);

 

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

 

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

 

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

 

ARTICLE I

 

INTERPRETATION AND
DEFINITIONS

 

Section 1.1.           Definitions.

 

Unless the context otherwise requires:

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

“Administrators” means each of Jack A.
Sweeney, H. Anthony Gartshore and Thomas McCullough, solely in such Person’s
capacity as Administrator of the Trust created and continued hereunder and not
in such Person’s individual capacity, or such Administrator’s successor in interest
in such capacity, or any successor appointed as herein provided.

 

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

 

“Applicable Depositary Procedures” means, with
respect to any transfer or transaction involving a Book-Entry Capital Security,
the rules and procedures of the Depositary for such Book-Entry Capital
Security, in each case to the extent applicable to such transaction and as in
effect from time to time.

 

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

 

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

 

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

 

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

 

“Book-Entry Capital Securities” means a Capital
Security, the ownership and transfer of which shall be made through book
entries by a Depositary.

 

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

 

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

 

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

 

2

 

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

 

“Certificate” means any certificate evidencing
Securities.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Debentures” means the Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2035 to be issued by the
Debenture Issuer under the Indenture.

 

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

 

“Definitive Capital Securities Certificates”
means Capital Securities issued in certificated, fully registered form that are
not Global Capital Securities.

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

“Distribution Rate” means, for the Distribution
Period beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in December 2005, the rate
per annum of 5.49%, and for each Distribution Period beginning on or after the
Distribution Payment Date in December 2005, the Coupon Rate for such
Distribution Period.

 

“DTC” means The Depository Trust Company or any
successor thereto.

 

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

 

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

 

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

 

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

 

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

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, or any successor legislation.

 

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

 

4

 

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

 

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

 

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

 

“Global Capital Security” means a Capital
Securities Certificate evidencing ownership of Book-Entry Capital Securities.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Owner” means each Person who is the beneficial
owner of Book-Entry Capital Securities as reflected in the records of the
Depositary or, if a Depositary Participant is not the beneficial owner, then
the beneficial owner as reflected in the records of the Depositary Participant.

 

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

 

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

 

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

 

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

 

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

 

“QIB” means a “qualified institutional buyer”
as defined in Rule 144A under the Securities Act.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

ARTICLE II

 

ORGANIZATION

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

(A)          the
issuance and sale of the Securities;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

(A)          the
establishment of the Property Account;

 

(B)           the
receipt of the Debentures;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

the action of the Administrators and the action of the Institutional
Trustee, the action of the Institutional Trustee shall prevail.

 

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

 

(c)           In
connection with the issuance and sale of the Capital Securities, the Sponsor
shall have the right and responsibility to assist the Trust with respect to, or
effect on behalf of the Trust, the following (and any actions taken by the
Sponsor in furtherance of the following prior to the date of this Declaration
are hereby ratified and confirmed in all respects):

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

(h)           If
the Institutional Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Declaration and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Institutional Trustee or to such Holder, then and in every such case the
Sponsor, the Institutional Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Institutional Trustee and the Holders shall continue as though no such
proceeding had been instituted.

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)           possess
any power or otherwise act in such a way as to vary the Trust assets or the
terms of the Securities in any way whatsoever other than as expressly provided
herein;

 

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

 

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

 

(viii)        other
than as provided in this Declaration (including Annex I), (A) direct
the time, method and place of exercising any trust or power conferred upon the
Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to
rescind or annul any declaration that the principal of all the Debentures shall
be due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required unless the Trust shall have 

 

12

 

received a written
opinion of counsel to the effect that such modification will not cause the
Trust to cease to be classified as a “grantor trust” for United States federal
income tax purposes.

 

Section 2.8.           Powers and Duties of the
Institutional Trustee.

 

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

 

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

 

(c)           The
Institutional Trustee shall:

 

(i)            establish
and maintain a segregated non-interest bearing trust account (the “Property
Account”) in the name of and under the exclusive control of the
Institutional Trustee, and maintained in the Institutional Trustee’s trust
department, on behalf of the Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures held by the Institutional
Trustee, deposit such funds into the Property Account and make payments, or
cause the Paying Agent to make payments, to the Holders of the Capital
Securities and Holders of the Common Securities from the Property Account in
accordance with Section 5.1.  Funds
in the Property Account shall be held uninvested until disbursed in accordance
with this Declaration;

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)           The
Institutional Trustee, before the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee.  In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 6.9), the Institutional Trustee shall exercise such of
the rights and powers vested in it by this Declaration, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.

 

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

 

(c)           All
payments made by the Institutional Trustee or a Paying Agent in respect of the
Securities shall be made only from the revenue and proceeds from the Trust
Property and only to the extent that there shall be sufficient revenue or
proceeds from the Trust Property to enable the Institutional Trustee or a
Paying Agent to make payments in accordance with the terms hereof.  Each Holder, by its acceptance of a Security,
agrees that it will look solely to the revenue and proceeds from the Trust 

 

14

 

Property to the
extent legally available for distribution to it as herein provided and that the
Trustees and the Administrators are not personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security.  This Section 2.9(c) does
not limit the liability of the Trustees expressly set forth elsewhere in this
Declaration.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           if (i) in
performing its duties under this Declaration, the Institutional Trustee is
required to decide between alternative courses of action, (ii) in
construing any of the provisions of this Declaration, the Institutional Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein, or (iii) the Institutional Trustee is unsure of the application of
any provision of this Declaration, then, except as to any matter as to which
the Holders of Capital Securities are entitled to vote under the

 

15

 

terms of this
Declaration, the Institutional Trustee may deliver a notice to the Sponsor
requesting the Sponsor’s written instructions as to the course of action to be
taken and the Institutional Trustee shall take such action, or refrain from
taking such action, as the Institutional Trustee shall be instructed in
writing, in which event the Institutional Trustee shall have no liability
except for its own negligence or willful misconduct;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(j)            whenever
in the administration of this Declaration the Institutional Trustee shall deem
it desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder the Institutional Trustee (i) may
request instructions from the Holders of the Capital Securities which instructions
may only be given by the Holders of the same proportion in liquidation amount
of the Capital Securities as would be entitled to direct the Institutional
Trustee under the terms of the Capital 

 

16

 

Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing
such remedy or right or taking such other action until such instructions are
received, and (iii) shall be fully protected in acting in accordance with
such instructions;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

Section 2.15.        Mergers.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

(c)           Notwithstanding
Section 2.15(b), the Trust shall not, except with the consent of Holders
of 100% in aggregate liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace it
if such consolidation, amalgamation, merger or replacement would cause the
Trust or Successor Entity to be classified as other than a grantor trust for
United States federal income tax purposes.

 

ARTICLE III

 

SPONSOR

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

The Sponsor’s obligations under this Section 3.3
shall be for the benefit of, and shall be enforceable by, any Person to whom
such debts, obligations, costs, expenses and taxes are owed (a “Creditor”)
whether or not such Creditor has received notice hereof.  Any such Creditor may enforce the Sponsor’s
obligations under this Section 3.3 directly against the Sponsor and the
Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before
proceeding against the Sponsor.  The
Sponsor agrees to execute such additional agreements as may be necessary or
desirable in order to give full effect to the provisions of this Section 3.3.

 

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

 

ARTICLE IV

 

INSTITUTIONAL TRUSTEE AND
ADMINISTRATORS

 

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

 

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

 

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

 

Section 4.2.           Delaware Trustee; Eligibility.

 

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

 

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

 

20

 

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

 

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

 

Section 4.3.           Institutional Trustee;
Eligibility.

 

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

 

(i)            not be an Affiliate of the Sponsor;

 

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

 

(iii)          be
a banking corporation or trust company organized and doing business under the
laws of the United States of America or any state thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000.00), and subject to supervision or examination by Federal, state,
or District of Columbia authority.  If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.3(a)(iii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           Subject
to Section 4.5(a), a Relevant Trustee may resign at any time by giving
written notice thereof to the Holders of the Securities and by appointing a successor
Relevant Trustee.  Upon the 

 

21

 

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

 

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

 

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

 

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

 

(f)            In
case of the appointment hereunder of a successor Relevant Trustee, the retiring
Relevant Trustee and each successor Relevant Trustee with respect to the
Securities shall execute and deliver an amendment hereto wherein each successor
Relevant Trustee shall accept such appointment and which (a) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Relevant Trustee all the rights, powers, trusts
and duties of the retiring Relevant Trustee with respect to the Securities and
the Trust and (b) shall add to or change any of the provisions of this
Declaration as shall be necessary to provide for or facilitate the
administration of the Trust by more 

 

22

 

than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee; but, on request of the Trust or any successor Relevant
Trustee, such retiring Relevant Trustee shall duly assign, transfer and deliver
to such successor Relevant Trustee all Trust Property, all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the
Securities and the Trust subject to the payment of all unpaid fees, expenses
and indemnities of such retiring Relevant Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

the Trustees and
the Administrators together shall be held from time to time upon the call of any
Trustee or an Administrator.

 

Section 4.9.           Delegation of Power.

 

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

 

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

 

Section 4.10.        Conversion, Consolidation or
Succession to Business.  Any Person into which
the Institutional Trustee or the Delaware Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Institutional Trustee or the Delaware
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Institutional Trustee or the Delaware
Trustee shall be the successor of the Institutional Trustee or the Delaware
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article and, provided, further, that
such Person shall file an amendment to the Certificate of Trust with the
Secretary of State of the State of Delaware as contemplated in Section 4.5(i).

 

ARTICLE V

 

DISTRIBUTIONS

 

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

 

ARTICLE VI

 

ISSUANCE OF SECURITIES

 

Section 6.1.           General Provisions Regarding
Securities.

 

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

 

24

 

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

 

(c)           The
Capital Securities issued to QIBs shall be, except as provided in Section 6.4,
Book-Entry Capital Securities issued in the form of one or more Global Capital
Securities registered in the name of the Depositary or its nominee and
deposited with the Depositary or a custodian for the Depositary for credit by
the Depositary to the respective accounts of the Depositary Participants thereof
(or such other accounts as they may direct). 
The Capital Securities issued to a Person other than a QIB shall be
issued in the form of a Definitive Capital Securities Certificate.

 

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

 

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

 

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

 

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

 

Section 6.3.           Form and Dating.  The
Capital Securities and the Institutional Trustee’s certificate of authentication
thereon shall be substantially in the form of Exhibit A-1, and the Common 

 

25

 

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

 

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

 

Section 6.4.           Book-Entry Capital Securities.

 

(a)           A
Global Capital Security may be exchanged, in whole or in part, for Definitive
Capital Securities Certificates registered in the names of Owners only if such
exchange complies with Article VIII and (i) the Depositary advises
the Administrators and the Institutional Trustee in writing that the Depositary
is no longer willing or able to properly discharge its responsibilities with
respect to the Global Capital Security, and no qualified successor is appointed
by the Administrators within ninety (90) days of receipt of such notice, (ii) the
Depositary ceases to be a clearing agency registered under the Exchange Act and
the Administrators fail to appoint a qualified successor within ninety (90)
days of obtaining knowledge of such event, (iii) the Administrators at
their option advise the Institutional Trustee in writing that the Trust elects
to terminate the book-entry system through the Depositary, or (iv) an
Indenture Event of Default has occurred and is continuing.  Upon the occurrence of any event specified in
clause (i), (ii), (iii) or (iv) above, the Administrators shall
notify the Depositary and instruct the Depositary to notify all Owners of
Book-Entry Capital Securities and the Institutional Trustee of the occurrence
of such event and of the availability of Definitive Capital Securities
Certificates to Owners of the Capital Securities requesting the same.  Upon the issuance of Definitive Capital
Securities Certificates, the Administrators and the Institutional Trustee shall
recognize the Holders of the Definitive Capital Securities Certificates as
Holders.  Notwithstanding the foregoing,
if an Owner of a beneficial interest in a Global Capital Security wishes at any
time to transfer an interest in such Global Capital Security to a Person other
than a QIB, such transfer shall be effected, subject to the Applicable
Depositary Procedures, in accordance with the provisions of this Section 6.4
and Article VIII, and the transferee shall receive a Definitive Capital
Securities Certificate in connection with such transfer.  A holder of a Definitive Capital Securities
Certificate that is a QIB may upon request, and in accordance with the
provisions of this Section 6.4 and Article VIII, exchange such Definitive
Capital Securities Certificate for a beneficial interest in a Global Capital
Security.

 

(b)           If
any Global Capital Security is to be exchanged for Definitive Capital
Securities Certificates or canceled in part, or if any Definitive Capital
Securities Certificate is to be exchanged in whole or in part for any Global
Capital Security, then either (i) such Global Capital Security shall be so
surrendered for exchange or cancellation as provided in this Section 6.4
and Article VIII or (ii) the aggregate liquidation amount represented
by such Global Capital Security shall be reduced, subject to Section 6.3,
or increased by an amount equal to the liquidation amount represented by that
portion of the

 

26

 

Global Capital
Security to be so exchanged or canceled, or equal to the liquidation amount
represented by such Definitive Capital Securities Certificates to be so
exchanged for any Global Capital Security, as the case may be, by means of an
appropriate adjustment made on the records of the Registrar, whereupon the
Institutional Trustee, in accordance with the Applicable Depositary Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender to the
Administrators or the Registrar of any Global Capital Security or Securities by
the Depositary, accompanied by registration instructions, the Administrators,
or any one of them, shall execute the Definitive Capital Securities Certificates
in accordance with the instructions of the Depositary.  None of the Registrar, Administrators, or the
Institutional Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in relying
on, such instructions.

 

(c)           Every
Definitive Capital Securities Certificate executed and delivered upon
registration or transfer of, or in exchange for or in lieu of, a Global Capital
Security or any portion thereof shall be executed and delivered in the form of,
and shall be, a Global Capital Security, unless such Definitive Capital
Securities Certificate is registered in the name of a Person other than the
Depositary for such Global Capital Security or a nominee thereof.

 

(d)           The
Depositary or its nominee, as registered owner of a Global Capital Security,
shall be the Holder of such Global Capital Security for all purposes under this
Declaration and the Global Capital Security, and Owners with respect to a
Global Capital Security shall hold such interests pursuant to the Applicable
Depositary Procedures.  The Registrar,
the Administrators and the Institutional Trustee shall be entitled to deal with
the Depositary for all purposes of this Declaration relating to the Global
Capital Securities (including the payment of the liquidation amount of and
Distributions on the Book-Entry Capital Securities represented thereby and the
giving of instructions or directions by Owners of Book-Entry Capital Securities
represented thereby and the giving of notices) as the sole Holder of the
Book-Entry Capital Securities represented thereby and shall have no obligations
to the Owners thereof.  None of the
Administrators, the Institutional Trustee nor the Registrar shall have any
liability in respect of any transfers effected by the Depositary.

 

(e)           The
rights of the Owners of the Book-Entry Capital Securities shall be exercised
only through the Depositary and shall be limited to those established by law,
the Applicable Depositary Procedures and agreements between such Owners and the
Depositary and/or the Depositary Participants; provided, however, solely for
the purpose of determining whether the Holders of the requisite amount of
Capital Securities have voted on any matter provided for in this Declaration,
to the extent that Capital Securities are represented by a Global Capital
Security, the Administrators and the Institutional Trustee may conclusively
rely on, and shall be fully protected in relying on, any written instrument
(including a proxy) delivered to the Institutional Trustee by the Depositary
setting forth the Owners’ votes or assigning the right to vote on any matter to
any other Persons either in whole or in part. 
To the extent that Capital Securities are represented by a Global
Capital Security, the initial Depositary will make book-entry transfers among
the Depositary Participants and receive and transmit payments on the Capital
Securities that are represented by a Global Capital Security to such Depositary
Participants, and none of the Sponsor, the Administrators or the Institutional
Trustee shall have any responsibility or obligation with respect thereto.

 

(f)            To
the extent that a notice or other communication to the Holders is required
under this Declaration, for so long as Capital Securities are represented by a
Global Capital Security, the Administrator and the Institutional Trustee shall
give all such notices and communications to the Depositary, and shall have no
obligations to the Owners.

 

27

 

Section 6.5.           Mutilated, Destroyed, Lost or
Stolen Certificates.

 

If:

 

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

 

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

 

then, in the absence of
notice that such Certificate shall have been acquired by a protected purchaser,
an Administrator on behalf of the Trust shall execute (and in the case of a
Capital Security Certificate, the Institutional Trustee shall authenticate) and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination.  In connection with the issuance of any new
Certificate under this Section 6.5, the Registrar or the Administrators
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.  Any duplicate Certificate issued pursuant to
this Section shall constitute conclusive evidence of an ownership interest
in the relevant Securities, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.

 

Section 6.6.           Temporary Securities.  Until
definitive Securities are ready for delivery, the Administrators may prepare
and, in the case of the Capital Securities, the Institutional Trustee shall authenticate,
temporary Securities.  Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Administrators consider appropriate for temporary
Securities.  Without unreasonable delay,
the Administrators shall prepare and, in the case of the Capital Securities,
the Institutional Trustee shall authenticate, definitive Securities in exchange
for temporary Securities.

 

Section 6.7.           Cancellation.  The
Administrators at any time may deliver Securities to the Institutional Trustee
for cancellation.  The Registrar shall
forward to the Institutional Trustee any Securities surrendered to it for
registration of transfer, redemption or payment.  The Institutional Trustee shall promptly
cancel all Securities surrendered for registration of transfer, payment,
replacement or cancellation and shall dispose of such canceled Securities as
the Administrators direct.  The
Administrators may not issue new Securities to replace Securities that have
been paid or that have been delivered to the Institutional Trustee for
cancellation.

 

Section 6.8.           CUSIP Numbers.  The Trust in issuing the
Securities may use “CUSIP” numbers (if then generally in use), and, if so, the
Institutional Trustee shall use CUSIP numbers in notice of redemption as a
convenience to Holders; 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 Securities or as contained in any notice of redemption
and that identification numbers printed on the Securities and any such
redemption shall not be affected by any defect in or omission of such
numbers.  The Trust shall promptly notify
the Institutional Trustee in writing of any change in the CUSIP numbers.

 

Section 6.9.           Rights of Holders; Waivers of Past
Defaults.

 

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

 

(b)           For
so long as any Capital Securities remain outstanding, if upon an Acceleration
Event of Default, the Debenture Trustee fails or the holders of not less than
25% in principal amount of the 

 

28

 

outstanding
Debentures fail to declare the principal of all of the Debentures to be
immediately due and payable, the Holders of a Majority in liquidation amount of
the Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Institutional Trustee, the Sponsor
and the Debenture Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

expiration of such 90-day period, a new written notice
of declaration of acceleration, or rescission and annulment thereof, as the
case may be, that is identical to a written notice that has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 6.9.

 

(c)           Except
as otherwise provided in paragraphs (a) and (b) of this Section 6.9,
the Holders of at least a Majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default or Event of Default and its consequences.  Upon such waiver, any such default or Event
of Default shall cease to exist, and any default or Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.

 

ARTICLE VII

DISSOLUTION AND TERMINATION OF TRUST

 

Section 7.1.           Dissolution and Termination of
Trust.

 

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

 

(i)            unless earlier dissolved, on December 15,
2040, the expiration of the term of the Trust;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

ARTICLE VIII

TRANSFER OF INTERESTS

 

Section 8.1.           General.

 

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

 

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

 

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

 

(d)           The
Registrar shall provide for the registration of Securities and of transfers of
Securities, which will be effected without charge but only upon payment (with
such indemnity as the Registrar may require) in respect of any tax or other
governmental charges that may be imposed in relation to it.  Upon surrender for registration of transfer of
any Securities, the Registrar shall cause one or more new Securities of the
same tenor to be issued in the name of the designated transferee or
transferees.  Every Security surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder’s attorney duly authorized in writing.  Each Security surrendered for registration of
transfer shall be canceled by the Institutional Trustee pursuant to Section 6.7.  A transferee of a Security shall be entitled
to the rights and subject to the obligations of a Holder hereunder upon the
receipt by such transferee of a Security. 
By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.

 

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

 

31

 

Section 8.2.           Transfer Procedures and
Restrictions.

 

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

 

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

 

[If the Capital Security is
to be Global Capital Security- THIS CAPITAL SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF
DTC.  THIS CAPITAL SECURITY IS
EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION, AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF
THIS CAPITAL SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.

 

UNLESS THIS CAPITAL SECURITY IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO FIRST REGIONAL STATUTORY
TRUST V OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS 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.]

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES
LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. 
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR THE 

 

32

 

TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO
A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903
OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT
TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED
FROM THE SPONSOR OR THE TRUST.  HEDGING
TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.

 

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

 

33

 

4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE IX

LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS

 

Section 9.1.           Liability.

 

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

 

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

 

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

 

34

 

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

 

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

 

Section 9.2.           Exculpation.

 

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

 

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

 

Section 9.3.           Fiduciary Duty.

 

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

 

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

 

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

 

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

 

Section 9.4.           Indemnification.

 

(a)           The
Sponsor shall indemnify, to the full extent permitted by law, any Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed 

 

35

 

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

 

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

 

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

 

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

 

(e)           To
the fullest extent permitted by law, expenses (including reasonable attorneys’
fees and expenses) incurred by an Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred
to in paragraphs (a) and (b) of this Section 9.4 shall be
paid by the Sponsor in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Indemnified
Person to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Sponsor as authorized in this Section 9.4.  Notwithstanding the foregoing, no advance
shall be made by the Sponsor if a determination is reasonably and promptly made
(i) by the Administrators by a majority vote of a Quorum of disinterested Administrators,
(ii) if such a Quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested

 

36

 

Administrators so
directs, by independent legal counsel in a written opinion or (iii) by the
Common Security Holder of the Trust, that, based upon the facts known to the
Administrators, counsel or the Common Security Holder at the time such
determination is made, such Indemnified Person acted in bad faith or in a
manner that such Indemnified Person did not believe to be in the best interests
of the Trust, or, with respect to any criminal proceeding, that such
Indemnified Person believed or had reasonable cause to believe his conduct was
unlawful.  In no event shall any advance
be made in instances where the Administrators, independent legal counsel or the
Common Security Holder reasonably determine that such Indemnified Person
deliberately breached his duty to the Trust or its Common or Capital Security
Holders.

 

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

 

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

 

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

 

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

 

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

 

Section 9.5.           Outside Businesses.  Any
Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee
may engage in or possess an interest in other business ventures of any nature
or description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders of Securities shall have
no rights by virtue of this Declaration in and to such independent ventures or
the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed
wrongful or improper.  None of any
Covered Person, the Sponsor, the Delaware Trustee or the Institutional Trustee
shall be obligated to present any particular investment or other opportunity to
the Trust even if such opportunity is of a

 

37

 

character that, if
presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment or other
opportunity.  Any Covered Person, the
Delaware Trustee and the Institutional Trustee may engage or be interested in
any financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.

 

Section 9.6.           Compensation; Fee.  The
Sponsor agrees:

 

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

 

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

 

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

 

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

 

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

 

ARTICLE X

ACCOUNTING

 

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

 

Section 10.2.        Certain Accounting Matters.  

 

(a)           At
all times during the existence of the Trust, the Administrators shall keep, or
cause to be kept at the principal office of the Trust in the United States, as
defined for purposes of Treasury Regulations section 301.7701-7, full
books of account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust.  The books of account shall be maintained, at
the Sponsor’s expense, in accordance with generally accepted accounting
principles, consistently applied.  The
books of account and the records of the Trust shall be examined by and reported
upon (either separately or as part of the Sponsor’s regularly prepared
consolidated financial report) as of the end of each Fiscal Year of the Trust
by a firm of independent certified public accountants selected by the
Administrators.

 

(b)           The
Administrators shall cause to be duly prepared and delivered to each of the
Holders of Securities Form 1099 or such other annual United States federal
income tax information statement 

 

38

 

required by the
Code, containing such information with regard to the Securities held by each
Holder as is required by the Code and the Treasury Regulations.  Notwithstanding any right under the Code to
deliver any such statement at a later date, the Administrators shall endeavor
to deliver all such statements within 30 days after the end of each Fiscal
Year of the Trust.

 

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

 

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

 

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

 

ARTICLE XI

AMENDMENTS AND MEETINGS

 

Section 11.1.        Amendments.

 

(a)           Except
as otherwise provided in this Declaration or by any applicable terms of the
Securities, this Declaration may only be amended by a written instrument approved
and executed (i) by the Institutional Trustee, or (ii) if the
amendment affects the rights, powers, duties, obligations or immunities of the
Delaware Trustee, by the Delaware Trustee.

 

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

 

(i)            the Institutional Trustee shall have
first received

 

39

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            cure any ambiguity;

 

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

 

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

 

(iv)          modify,
eliminate or add to any provision of this Declaration to such extent as may be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes at all times as a grantor trust and will not be required to
register as an Investment Company (including without limitation to conform to
any change in Rule 3a-5, Rule 3a-7 or any other applicable rule under
the Investment Company Act or written change in interpretation or 

 

40

 

application thereof by
any legislative body, court, government agency or regulatory authority) which
amendment does not have a material adverse effect on the rights, preferences or
privileges of the Holders of Securities;

 

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

 

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

 

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

 

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

 

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

 

(ii)           each
Holder of a Security may authorize any Person to act for it by proxy on all
matters in which a Holder of Securities is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting.  No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the
proxy.  Every proxy shall be revocable at
the pleasure of the Holder of the Securities executing it.  Except as otherwise provided herein, all
matters relating to the giving, voting or validity of proxies shall be governed
by the General Corporation Law of the State of Delaware relating to proxies,
and judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a Delaware
corporation; each meeting of the Holders of the Securities shall be conducted
by the Administrators or by such other Person that the Administrators may
designate; and

 

41

 

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

 

ARTICLE XII

REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

general principles
of equity and the discretion of the court (regardless of whether considered in
a proceeding in equity or at law);

 

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

 

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

 

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

 

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

 

ARTICLE XIII

MISCELLANEOUS

 

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

 

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

 

First Regional Statutory Trust V

c/o First Regional Bancorp

1801 Century Park East, Suite 800

Century City, California 90067

Attention:  Steven J.
Sweeney

Telecopy:  310-552-1772

 

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

 

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1600

Attention: 
Corporate Trust Administration

Telecopy:  302-636-4140

 

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

 

43

 

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-1600

Attention: 
Corporate Trust Administration

Telecopy:  302-636-4140

 

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

 

First Regional Bancorp

1801 Century Park East, Suite 800

Century City, California 90067

Attention:  Steven J.
Sweeney

Telecopy:  310-552-1772

 

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

 

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

 

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

 

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

 

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

 

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

 

44

 

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

 

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

 

Signatures appear on the
following page

 

45

 

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

 

	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Delaware
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher
  J. Monigle

  	
   

  
	
   

  	
   

  	
    Name:
  Christopher J. Monigle

  
	
   

  	
   

  	
    Title:
  Assistant Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Institutional
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher
  J. Monigle

  	
   

  
	
   

  	
   

  	
    Name:
  Christopher J. Monigle

  
	
   

  	
   

  	
    Title:
  Assistant Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST REGIONAL
  BANCORP, as Sponsor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  McCullough

  	
   

  
	
   

  	
   

  	
  Name: Thomas
  McCullough

  
	
   

  	
   

  	
  Title: Corporate
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADMINISTRATORS
  OF FIRST REGIONAL

  STATUTORY TRUST V

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jack A.
  Sweeney

  	
   

  
	
   

  	
   

  	
  Administrator

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ H. Anthony
  Gartshore

  	
   

  
	
   

  	
   

  	
  Administrator

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  McCullough

  	
   

  
	
   

  	
   

  	
  Administrator

  
								

 

46

 

ANNEX I

 

TERMS OF
SECURITIES

 

Pursuant to Section 6.1
of the Amended and Restated Declaration of Trust, dated as of September 28,
2005 (as amended from time to time, the “Declaration”), the designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities and the Common Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration):

 

1.             Designation
and Number.

 

(a)           20,000 Floating Rate Capital
Securities of First Regional Statutory Trust V (the “Trust”), with an
aggregate stated liquidation amount with respect to the assets of the Trust of twenty
million dollars ($20,000,000.00) and a stated liquidation amount with respect
to the assets of the Trust of $1,000.00 per Capital Security, are hereby
designated for the purposes of identification only as the “Capital
Securities”.  The Capital Security
Certificates evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.

 

(b)           619 Floating Rate Common Securities
of the Trust (the “Common Securities”) will be evidenced by Common
Security Certificates substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice.

 

2.             Distributions.

 

(a)           Distributions will be payable on each
Security for the Distribution Period beginning on (and including) the date of
original issuance and ending on (but excluding) the Distribution Payment Date
in December 2005 at a rate per annum of 5.49% and shall bear interest for
each successive Distribution Period beginning on (and including) the
Distribution Payment Date in December 2005, and each succeeding
Distribution Payment Date, and ending on (but excluding) the next succeeding
Distribution Payment Date at a rate per annum equal to the 3-Month LIBOR,
determined as described below, plus 1.48% (the “Coupon Rate”), applied
to the stated liquidation amount thereof, such rate being the rate of interest
payable on the Debentures to be held by the Institutional Trustee.  Distributions in arrears will bear interest
thereon compounded quarterly at the applicable Distribution Rate (to the extent
permitted by law).  Distributions, as
used herein, include cash distributions and any such compounded distributions
unless otherwise noted.  A Distribution
is payable only to the extent that payments are made in respect of the
Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor.  The amount of the Distribution payable for
any Distribution Period will be calculated by applying the Distribution Rate to
the stated liquidation amount outstanding at the commencement of the
Distribution Period on the basis of the actual number of days in the
Distribution Period concerned divided by 360. 
All percentages resulting from any calculations on the Capital
Securities will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655),
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward)).

 

(b)           Distributions on the Securities will
be cumulative, will accrue from the date of original issuance, and will be
payable, subject to extension of distribution payment periods as described
herein, quarterly in arrears on March 15, June 15, September 15
and December 15 of each year, or if such day is not a Business Day, then
the next succeeding Business Day (each a “Distribution Payment Date”)

 

I-1

 

(it being understood that interest accrues for any
such non-Business Day), commencing on the Distribution Payment Date in December 2005
when, as and if available for payment. 
The Debenture Issuer has the right under the Indenture to defer payments
of interest on the Debentures, so long as no Acceleration Event of Default has
occurred and is continuing, by deferring the payment of interest on the
Debentures for up to 20 consecutive quarterly periods (each an “Extension
Period”) at any time and from time to time, subject to the conditions
described below, during which Extension Period no interest shall be due and
payable.  During any Extension Period,
interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Distribution Rate
in effect for each such Extension Period, compounded quarterly from the date
such interest would have been payable were it not for the Extension Period, to
the extent permitted by law (such interest referred to herein as “Additional
Interest”).  No Extension Period may
end on a date other than a Distribution Payment Date.  At the end of any such Extension Period, the
Debenture Issuer shall pay all interest then accrued and unpaid on the
Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date and provided
further, however, that during any such Extension Period, the
Debenture Issuer and its Affiliates shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Debenture Issuer’s or its
Affiliates’ capital stock (other than payments of dividends or distributions to
the Debenture Issuer) or make any guarantee payments with respect to the
foregoing, or (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Debenture Issuer or any Affiliate that rank pari passu
in all respects with or junior in interest to the Debentures (other than, with
respect to clauses (i) and (ii) above, (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Debenture
Issuer in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or stockholder
stock purchase plan or in connection with the issuance of capital stock of the
Debenture Issuer (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Extension Period, (b) as a result of any exchange
or conversion of any class or series of the Debenture Issuer’s capital stock
(or any capital stock of a subsidiary of the Debenture Issuer) for any class or
series of the Debenture Issuer’s capital stock or of any class or series of the
Debenture Issuer’s indebtedness for any class or series of the Debenture Issuer’s
capital stock, (c) the purchase of fractional interests in shares of the
Debenture Issuer’s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholders’ rights plan, or
the issuance of rights, stock or other property under any stockholders’ rights
plan, or the redemption or repurchase of rights pursuant thereto, (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock
and any cash payments in lieu of fractional shares issued in connection
therewith, or (f)  payments under the Capital Securities Guarantee).  Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions
thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date.  Upon the termination of
any Extension Period and upon the payment of all accrued and unpaid interest
and Additional Interest, the Debenture Issuer may commence a new Extension
Period, subject to the foregoing requirements. 
No interest or Additional Interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest.  During
any Extension Period, Distributions on the Securities shall be deferred for a
period equal to the Extension Period.  If
Distributions are deferred, the Distributions due shall be paid on the date
that the related Extension Period terminates to Holders of the Securities as
they appear on the books and records of the Trust on the record date
immediately preceding such date. 
Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has 

 

I-2

 

funds available for the payment of such distributions
in the Property Account of the Trust. 
The Trust’s funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer.  The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

 

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

 

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

 

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

 

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

 

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

 

I-3

 

after satisfaction of liabilities of creditors of the
Trust to the extent not satisfied by the Debenture Issuer, an amount equal to
the Liquidation Distribution.  An early
Liquidation of the Trust pursuant to clause (iv) of Section 7.1(a) of
the Declaration shall occur if the Institutional Trustee determines that such
Liquidation is possible by distributing, after satisfaction of liabilities to
creditors of the Trust, to the Holders of the Securities on a Pro Rata basis,
the Debentures, and such distribution occurs.

 

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

 

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

 

4.             Redemption
and Distribution.

 

(a)           The Debentures will mature on December 15,
2035.  The Debentures may be redeemed by
the Debenture Issuer, in whole or in part, at any Distribution Payment Date on
or after the Distribution Payment Date in December 2010, at the Redemption
Price. In addition, the Debentures may be redeemed by the Debenture Issuer at
the Special Redemption Price, in whole but not in part, at any Distribution
Payment Date, upon the occurrence and continuation of a Special Event within
120 days following the occurrence of such Special Event at the Special
Redemption Price, upon not less than 30 nor more than 60 days’ notice
to holders of such Debentures so long as such Special Event is continuing. In
each case, the right of the Debenture Issuer to redeem the Debentures is
subject to the Debenture Issuer having received prior approval from the Federal
Reserve (if the Debenture Issuer is a bank holding company) or prior approval
from the OTS (if the Debenture Issuer is a savings and loan holding company),
in each case if then required under applicable capital guidelines or policies
of the applicable federal agency.

 

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

 

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

 

I-4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

I-5

 

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

 

“Maturity Date”
means December 15, 2035.

 

“Redemption Date”
shall mean the date fixed for the redemption of Capital Securities, which shall
be any Distribution Payment Date on or after the Distribution Payment Date in December 2010.

 

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

 

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

 

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

 

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

 

	
  Month in which Special

  Redemption Date Occurs

  	
   

  	
  Special Redemption Price

  
	
  December 2005

  	
   

  	
  104.625%

  
	
   

  	
   

  	
   

  
	
  March 2006

  	
   

  	
  104.300%

  
	
   

  	
   

  	
   

  
	
  June 2006

  	
   

  	
  104.000%

  
	
   

  	
   

  	
   

  
	
  September 2006

  	
   

  	
  103.650%

  
	
   

  	
   

  	
   

  
	
  December 2006

  	
   

  	
  103.350%

  
	
   

  	
   

  	
   

  
	
  March 2007

  	
   

  	
  103.000%

  
	
   

  	
   

  	
   

  
	
  June 2007

  	
   

  	
  102.700%

  
	
   

  	
   

  	
   

  
	
  September 2007

  	
   

  	
  102.350%

  
	
   

  	
   

  	
   

  
	
  December 2007

  	
   

  	
  102.050%

  
	
   

  	
   

  	
   

  
	
  March 2008

  	
   

  	
  101.700%

  
	
   

  	
   

  	
   

  
	
  June 2008

  	
   

  	
  101.400%

  

 

I-6

 

	
  September 2008

  	
   

  	
  101.050%

  
	
   

  	
   

  	
   

  
	
  December 2008

  	
   

  	
  100.750%

  
	
   

  	
   

  	
   

  
	
  March 2009

  	
   

  	
  100.450%

  
	
   

  	
   

  	
   

  
	
  June 2009

  	
   

  	
  100.200%

  
	
   

  	
   

  	
   

  
	
  September 2009
  and thereafter

  	
   

  	
  100.000%

  

 

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

 

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

 

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

 

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

 

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

 

I-7

 

(e)                                  Redemption
or Distribution Procedures.

 

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

 

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

 

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

 

(iv)                              Subject
to the foregoing and applicable law (including, without limitation, United
States federal securities laws), and provided that the acquiror is not the
Holder of the Common Securities or the obligor under the Indenture, the Sponsor
or any of its

 

I-8

 

subsidiaries may at any time and from time to time
purchase outstanding Capital Securities by tender, in the open market or by
private agreement.

 

5.                                       Voting
Rights - Capital Securities.

 

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

 

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

 

In the event the consent
of the Institutional Trustee, as the holder of the Debentures, is required
under the Indenture with respect to any amendment, modification or termination
of the Indenture, the Institutional Trustee shall request the direction of the
Holders of the Securities with respect to such

 

I-9

 

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

 

A waiver of an Indenture
Event of Default will constitute a waiver of the corresponding Event of Default
hereunder. Any required approval or direction of Holders of the Capital
Securities may be given at a separate meeting of Holders of the Capital
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities in the Trust or pursuant to written consent. The Institutional
Trustee will cause a notice of any meeting at which Holders of the Capital
Securities are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record
of the Capital Securities. Each such notice will include a statement setting
forth the following information (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the Holders of
the Capital Securities will be required for the Trust to redeem and cancel
Capital Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.

 

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

 

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

 

6.                                       Voting
Rights - Common Securities.

 

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

 

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

 

(c)                                  Subject
to Section 6.9 of the Declaration and only after each Event of Default (if
any) with respect to the Capital Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past
default and its consequences that is waivable under the Indenture, or (iii) exercising

 

I-10

 

any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable; provided, however, that,
where a consent or action under the Indenture would require a Super Majority,
the Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Notwithstanding
this paragraph 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote or consent of the Holders of the
Capital Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall not take any action described in (i), (ii) or
(iii) above, unless the Institutional Trustee has obtained an opinion of
tax counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account
of such action. If the Institutional Trustee fails to enforce its rights, to
the fullest extent permitted by law, under the Declaration, any Holder of the
Common Securities may institute a legal proceeding directly against any Person
to enforce the Institutional Trustee’s rights under the Declaration, without
first instituting a legal proceeding against the Institutional Trustee or any
other Person.

 

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

 

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

 

7.                                       Amendments
to Declaration and Indenture.

 

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

 

(b)                                 In
the event the consent of the Institutional Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification, or termination as
directed by a Majority in liquidation amount of the

 

I-11

 

Securities voting together as a single class; provided, however,
that where a consent under the Indenture would require a Super Majority, the
Institutional Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding.

 

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

 

(d)                                 Notwithstanding
any provision of the Declaration, the right of any Holder of the Capital
Securities to receive payment of distributions and other payments upon
redemption or otherwise, on or after their respective due dates, or to
institute a suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder. For the protection and enforcement of the foregoing provision, each and
every Holder of the Capital Securities shall be entitled to such relief as can
be given either at law or equity.

 

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

 

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

 

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

 

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

 

I-12

 

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

 

I-13

 

EXHIBIT A-1

 

FORM OF CAPITAL SECURITY CERTIFICATE

 

[FORM OF FACE
OF SECURITY]

 

THIS CAPITAL SECURITY IS
A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A
NOMINEE OF DTC.  THIS CAPITAL SECURITY IS
EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION, AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF
THIS CAPITAL SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.

 

UNLESS THIS CAPITAL
SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO FIRST REGIONAL STATUTORY TRUST V
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.

 

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

 

A-1-1

 

OBTAINED FROM THE SPONSOR OR THE TRUST. 
HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

 

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

 

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

 

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

 

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

 

	
  Certificate Number P-1

  	
   

  	
  20,000 Capital
  Securities

  
	
  [CUSIP NO.
  [           ] ]

  	
   

  	
   

  

 

September 28,
2005

 

Certificate
Evidencing Floating Rate Capital Securities

 

of

 

First Regional
Statutory Trust V

 

(liquidation
amount $1,000.00 per Capital Security)

 

A-1-2

 

First Regional Statutory
Trust V, a statutory trust created under the laws of the State of Delaware
(the “Trust”), hereby certifies that Cede & Co. (the “Holder”) is the
registered owner of capital securities of the Trust representing undivided
beneficial interests in the assets of the Trust, (liquidation amount $1,000.00
per capital security) (the “Capital Securities”). Subject to the Declaration
(as defined below), the Capital Securities are transferable on the books and
records of the Trust in person or by a duly authorized attorney, upon surrender
of this Certificate duly endorsed and in proper form for transfer. The Capital
Securities represented hereby are issued pursuant to, and the designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities shall in all respects be subject to, the provisions of
the Amended and Restated Declaration of Trust of the Trust dated as of September 28,
2005, among Jack A. Sweeney, H. Anthony Gartshore and Thomas
McCullough, as Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington
Trust Company, as Institutional Trustee, First Regional Bancorp, as Sponsor,
and the holders from time to time of undivided beneficial interests in the
assets of the Trust, including the designation of the terms of the Capital
Securities as set forth in Annex I to such amended and restated
declaration as the same may be amended from time to time (the “Declaration”).  Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Holder is entitled to
the benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee, and the Indenture to the
Holder without charge upon written request to the Sponsor at its principal
place of business.

 

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

 

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

 

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

 

Signatures
appear on following page

 

A-1-3

 

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

 

	
   

  	
  FIRST REGIONAL STATUTORY TRUST V

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Administrator

  

 

CERTIFICATE OF AUTHENTICATION

 

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

 

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as the Institutional Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

A-1-4

 

[FORM OF
REVERSE OF CAPITAL SECURITY]

 

Distributions payable on
each Capital Security will be payable at an annual rate equal to 5.49%
beginning on (and including) the date of original issuance and ending on (but
excluding) the Distribution Payment Date in December 2005 and at an annual
rate for each successive period beginning on (and including) the Distribution
Payment Date in December 2005, and each succeeding Distribution Payment
Date, and ending on (but excluding) the next succeeding Distribution Payment
Date (each a “Distribution Period”), equal to 3-Month LIBOR, determined as
described below, plus 1.48% (the “Coupon Rate”), applied to the stated
liquidation amount of $1,000.00 per Capital Security, such rate being the rate
of interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon compounded quarterly at the
Distribution Rate (to the extent permitted by applicable law).  The term “Distributions” as used herein
includes cash distributions and any such compounded distributions unless
otherwise noted.  A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor.  As used
herein, “Determination Date” means the date that is two London Banking Days
(i.e., a business day in which dealings in deposits in U.S. dollars are
transacted in the London interbank market) preceding the commencement of the
relevant Distribution Period.  The amount
of the Distribution payable for any Distribution Period will be calculated by
applying the Distribution Rate to the stated liquidation amount outstanding at
the commencement of the Distribution Period on the basis of the actual number
of days in the Distribution Period concerned divided by 360.

 

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

 

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

 

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

 

A-1-5

 

.0987655), and all dollar amounts used in or resulting from such
calculation will be rounded to the nearest cent (with one-half cent being
rounded upward)).

 

Except as otherwise
described below, Distributions on the Capital Securities will be cumulative,
will accrue from the date of original issuance and will be payable quarterly in
arrears on March 15, June 15, September 15 and December 15
of each year or if any such day is not a Business Day, then the next succeeding
Business Day (each such day, a “Distribution Payment Date”) (it being
understood that interest accrues for any such non-Business Day), commencing on
the Distribution Payment Date in December 2005.  The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures, so long as no Acceleration
Event of Default has occurred and is continuing, by extending the interest
payment period for up to 20 consecutive quarterly periods (each an “Extension
Period”) at any time and from time to time on the Debentures, subject to the
conditions described below, during which Extension Period no interest shall be
due and payable.  During any Extension
Period, interest will continue to accrue on the Debentures, and interest on
such accrued interest will accrue at an annual rate equal to the Distribution Rate
in effect for each such Extension Period, compounded quarterly from the date
such interest would have been payable were it not for the Extension Period, to
the extent permitted by law (such interest referred to herein as “Additional
Interest”). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period, the Debenture Issuer
shall pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date.  Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions
thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and Additional Interest, the
Debenture Issuer may commence a new Extension Period, subject to the foregoing
requirements.  No interest or Additional
Interest shall be due and payable during an Extension Period, except at the end
thereof, but each installment of interest that would otherwise have been due and
payable during such Extension Period shall bear Additional Interest.  During any Extension Period, Distributions on
the Capital Securities shall be deferred for a period equal to the Extension
Period.  If Distributions are deferred,
the Distributions due shall be paid on the date that the related Extension
Period terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust.  The Trust’s funds available for
Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer.  The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.

 

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

 

A-1-6

 

ASSIGNMENT

 

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

 

 

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

 

 

 

 

 

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

 

 

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

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
				

 

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

 

Signature Guarantee:(1)

 

 

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

 

A-1-7

 

EXHIBIT A-2

 

FORM OF
COMMON SECURITY CERTIFICATE

 

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

 

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

 

	
  Certificate Number C-1

  	
   

  	
  619 Common
  Securities

  

 

September 28,
2005

 

Certificate
Evidencing Floating Rate Common Securities

 

of

 

First Regional
Statutory Trust V

 

First Regional Statutory
Trust V, a statutory trust created under the laws of the State of Delaware
(the “Trust”), hereby certifies that First Regional Bancorp (the “Holder”) is
the registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust (the “Common Securities”).  The Common Securities represented hereby are
issued pursuant to, and the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities shall in
all respects be subject to, the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of September 28, 2005, among Jack A.
Sweeney, H. Anthony Gartshore and Thomas McCullough, as Administrators, Wilmington
Trust Company, as Delaware Trustee, Wilmington Trust Company, as Institutional
Trustee, First Regional Bancorp, as Sponsor, and the holders from time to time
of undivided beneficial interest in the assets of the Trust including the
designation of the terms of the Common Securities as set forth in Annex I to
such amended and restated declaration, as the same may be amended from time to
time (the “Declaration”).  Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration.  The Holder is entitled to
the benefits of the Guarantee to the extent provided therein.  The Sponsor will provide a copy of the
Declaration, the Guarantee and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business.

 

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

 

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

 

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

 

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

 

A-2-1

 

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

 

	
   

  	
  FIRST REGIONAL STATUTORY TRUST V

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Administrator

  

 

A-2-2

 

[FORM OF
REVERSE OF COMMON SECURITY]

 

Distributions payable on
each Common Security will be payable at an annual rate equal to 5.49% beginning
on (and including) the date of original issuance and ending on (but excluding)
the Distribution Payment Date in December 2005 and at an annual rate for
each successive period beginning on (and including) the Distribution Payment
Date in December 2005, and each succeeding Distribution Payment Date, and
ending on (but excluding) the next succeeding Distribution Payment Date (each a
“Distribution Period”), equal to 3-Month LIBOR, determined as described below,
plus 1.48% (the “Coupon Rate”), applied to the stated liquidation amount of
$1,000.00 per Common Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. Distributions in
arrears will bear interest thereon compounded quarterly at the Distribution
Rate (to the extent permitted by applicable law).  The term “Distributions” as used herein
includes cash distributions and any such compounded distributions unless
otherwise noted.  A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor.  As used
herein, “Determination Date” means the date that is two London Banking Days
(i.e., a business day in which dealings in deposits in U.S. dollars are
transacted in the London interbank market) preceding the commencement of the
relevant Distribution Period.  The amount
of the Distribution payable for any Distribution Period will be calculated by
applying the Distribution Rate to the stated liquidation amount outstanding at
the commencement of the Distribution Period on the basis of the actual number
of days in the Distribution Period concerned divided by 360.

 

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

 

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

 

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

 

A-2-3

 

.0987655), and all dollar amounts used in or resulting from such
calculation will be rounded to the nearest cent (with one-half
cent being rounded upward)).

 

Except as otherwise
described below, Distributions on the Common Securities will be cumulative,
will accrue from the date of original issuance and will be payable quarterly in
arrears on March 15, June 15, September 15 and December 15
of each year or if any such day is not a Business Day, then the next succeeding
Business Day (each such day, a “Distribution Payment Date”) (it being
understood that interest accrues for any such non-Business Day), commencing on
the Distribution Payment Date in December 2005. The Debenture Issuer has
the right under the Indenture to defer payments of interest on the Debentures,
so long as no Acceleration Event of Default has occurred and is continuing, by
extending the interest payment period for up to 20 consecutive quarterly
periods (each an “Extension Period”) at any time and from time to time on the
Debentures, subject to the conditions described below, during which Extension
Period no interest shall be due and payable. 
During any Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest will accrue at an annual rate
equal to the Distribution Rate in effect for each such Extension Period,
compounded quarterly from the date such interest would have been payable were
it not for the Extension Period, to the extent permitted by law (such interest
referred to herein as “Additional Interest”). No Extension Period may end on a
date other than a Distribution Payment Date. 
At the end of any such Extension Period, the Debenture Issuer shall pay
all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date.  Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions thereof
shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and Additional Interest, the
Debenture Issuer may commence a new Extension Period, subject to the foregoing
requirements. No interest or Additional Interest shall be due and payable
during an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during such Extension
Period shall bear Additional Interest. 
During any Extension Period, Distributions on the Common Securities
shall be deferred for a period equal to the Extension Period.  If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust’s funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer.

 

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

 

A-2-4

 

ASSIGNMENT

 

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

 

 

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

 

 

 

 

 

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

 

 

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

 

	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
				

 

Signature Guarantee(2)

 

 

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

 

A-2-5

 

EXHIBIT B

 

SPECIMEN
OF INITIAL DEBENTURE

 

FLOATING
RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE

 

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 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

 

B-1

 

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 Regional
Bancorp

 

September 28,
2005

 

First Regional 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 Wilmington Trust Company, not in its individual capacity but solely as
Institutional Trustee for First Regional Statutory Trust V (the “Holder”)
or registered assigns, the principal sum of twenty million six hundred nineteen
thousand dollars ($20,619,000.00) on December 15, 2035, and to pay
interest on said principal sum from September 28, 2005, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 15, June 15, September 15 and December 15
of each year or if such day is not a Business Day, then the next succeeding
Business Day (each such date, an “Interest Payment Date”) (it being understood
that interest accrues for any such non-Business Day), commencing on the
Interest Payment Date in December 2005, at an annual rate equal to 5.49%
beginning on (and including) the date of original issuance and ending on (but
excluding) the Interest Payment Date in December 2005 and at an annual
rate for each successive period beginning on (and including) the Interest
Payment Date in December 2005, and each succeeding Interest Payment Date,
and ending on (but excluding) the next succeeding Interest Payment Date (each a
“Distribution Period”), equal to 3-Month LIBOR, determined as described below,
plus 1.48% (the “Coupon Rate”), applied to the principal amount hereof, until
the principal hereof is paid or duly provided for or made available for
payment, and on any overdue principal and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest (including Additional Interest) at the
Interest Rate in effect for each applicable period, compounded quarterly, from
the dates such amounts are due until they are paid or made available for
payment.  The amount of interest payable
for any period will be computed on the basis of the actual number of days in
the Distribution Period concerned divided by 360.  The interest

 

B-2

 

installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such
interest installment, which shall be fifteen Business Days prior to the day on
which the relevant Interest Payment Date occurs.  Any such interest installment not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such regular record date and may be paid to the Person in whose name
this Debenture (or one or more Predecessor Securities) is registered at the
close of business on a special record date.

 

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

 

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

 

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

 

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

 

B-3

 

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

 

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

 

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

 

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

 

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.

 

B-4

 

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

 

	
   

  	
  FIRST REGIONAL BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  

 

B-5

 

CERTIFICATE OF
AUTHENTICATION

 

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

 

	
   

  	
  WILMINGTON TRUST COMPANY, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

B-6

 

REVERSE OF DEBENTURE

 

This Debenture is one of the floating rate junior
subordinated deferrable interest debentures of the Company, all issued or to be
issued under and pursuant to the Indenture dated as of September 28, 2005
(the “Indenture”), duly executed and delivered between the Company and the
Trustee, to which Indenture reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Trustee, the Company and the holders of the Debentures.  The Debentures are limited in aggregate
principal amount as specified in the Indenture.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

The Company has agreed that if Debentures are
initially issued to the Trust or a trustee of such Trust in connection with the
issuance of Trust Securities by the Trust (regardless of whether Debentures
continue to be held by such Trust) and (i) there shall have occurred and
be continuing an Event of Default, (ii) the Company shall be in default
with respect to its payment of any obligations under the Capital Securities
Guarantee, or (iii) the Company shall have given notice of its election to
defer payments of interest on the Debentures by extending the interest payment
period as provided herein and such Extension Period, or any extension thereof,
shall be continuing, then the Company shall not, and shall not allow any
Affiliate of the Company to, (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s capital stock or its Affiliates’ capital
stock (other than payments of dividends or distributions to the Company) or
make any guarantee payments with respect to the foregoing or (y) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company or any Affiliate that rank pari passu in all respects with or junior in interest to the
Debentures (other than, with respect to clauses (x) and (y) above,  (1) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the

 

B-7

 

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).

 

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.

 

B-8

 

EXHIBIT C

 

PLACEMENT
AGREEMENT

 

C-1AXM Pharma, Inc. Exhibit 10.1

Transition Agreement

This Agreement is made as of September 25, 2005, by and between AXM Pharma, Inc., a Nevada company with its principal offices at 7251 West Lake Mead Blvd, Suite 300 Las Vegas, Nevada, 89128 (the “Company”); Wei Shi Wang (the “Shareholder”) and Tripoint Capital Advisors, LLC, a Maryland limited liability company, with its principal offices at 400 Professional Drive, Suite 310, Gaithersburg, Maryland 20879; The MacLellan Group, LLC, a  California company, with its principal offices at 8324 Delgany Avenue, Playa del Rey, California 90293;  Law Offices of Louis E. Taubman, PC, a New York Professional Corporation, with its principal offices at 225 Broadway, Suite 1200, New York, New York 10007; Investor Communications Company, LLC., a Maryland limited liability company, with its principal offices at 400 Professional Drive, Suite 310, Gaithersburg, Maryland 20879; Douglas MacLellan; Mike Boswell; Louis Taubman; Mark Elenowitz; and Tom Bostic Smith (referred to individually as a “Transitioning Party” and together  as the “Transitioning Parties”).

Witnesseth

WHEREAS, the Transitioning Parties have been employed by or serving on behalf of the Company in various roles including as consultants, board members and/or attorneys both as individuals and/or in a corporate capacity;

WHEREAS, Messrs. MacLellan and Elenowitz have resigned as directors of the Company and the other Transitioning Parties intend to resign from their respective positions; 

WHEREAS, the Company, the Shareholder and the Transitioning Parties agree that it is in the best interests of the Company for an orderly transition to occur from the Transitioning Parties to those persons who will be fulfilling similar roles in the future on behalf of the Company.

NOW, THEREFORE, in consideration of the premise and the mutual promises and covenants contained herein and subject specifically to the conditions hereof, and intending to be legally bound thereby, the parties agree as follows:

1.    Duties of the Transitioning Parties 

a.

The Transitioning Parties agree to use their best efforts to assist the Company with an orderly transition of the duties and functions currently performed by the Transitioning Parties.  This orderly transition will include the following items:

i.

Turnover of all books, records (including any  related software  programs); and all other Company property , including the names and contact information for all of the Company’s merchant bankers, investors and other financial contacts or consultants: customer lists, vendor contacts, contracts, financial records and all other 

1

Confidential Information (as defined below); and the printing company information and  any related  software to enable the Company to make  filings on Edgar in accordance with its past practice, without any additional expense), excluding only  the Transitioning Parties’ personal notes, attorney work product and their laptop computers, provided that all Confidential Information on such computers shall remain subject to Section 2 below

ii.

Facilitate communications with institutional investors, currently invested in the Company, with whom one or more Transitioning Parties is the primary contact on behalf of the Company.  

iii.

Facilitate communications with outside service providers, currently employed by the Company, with whom one or more Transitioning Parties is the primary contact on behalf of the Company.

iv.

In the case of Law Offices of Louis E. Taubman, PC, assist new securities counsel to the Company by delivering, without any charge to the Company, originals  or copies of any past filings, copies of all legal files (excluding attorney work product) for matters where it acted as counsel to the Company and reasonable access for questions regarding open legal matters  ( provided that the Company furnishes  it with copies of any Company documents no longer in its possession and which are  needed to respond to such questions.) The Company further agrees that such former counsel may, in its discretion, make copies of any of such files, at its own   expense, for its own records, provided that doing so does not unreasonably delay the transfer of the files to the Company’s new counsel and that such former counsel’s office keeps the non-public portion of such files confidential in accordance with Section 2 below.  

b.

During the term of this Agreement, Transitioning Parties will expeditiously fulfill the above listed duties during normal business hours from their own offices with due consideration for Transitioning Parties personal and professional schedules and the Company’s needs for its  records and business information.

c.

Subject to Section 1 (a) (iv), Transitioning Parties will not be required to incur any out of pocket expenses in connection with their duties hereunder and agree that if they anticipate incurring any such expenses they will seek approval in advance from the Company but will not be required to incur such expenses until they have received reasonable assurance from the Company that they will be reimbursed. 

2.    Confidential Information 

Transitioning Parties acknowledge that, in the course of performing their duties for the Company, they may have obtained information relating to the Company, which the Company deems as 

2

confidential ("Confidential Information").  Transitioning Parties shall hold at all times, both during the term of this agreement and at all times thereafter, such Confidential Information in the strictest confidence, and shall not use such Confidential Information for any purpose, other than as may be reasonably necessary for the performance of their duties pursuant to this Agreement, without the Company's prior written consent.  Transitioning Parties shall not disclose any Confidential Information to any person or entity, other than to their own employees or consultants as may be reasonably necessary for purposes of performing their duties hereunder, without the Company's prior written consent.   The foregoing notwithstanding, the term "Confidential Information" shall not include information which (i) becomes generally available to the public, other than as a result of a breach hereof, (ii) was available on a non-confidential basis prior to its disclosure to Transitioning Parties by the Company, or (iii) becomes available to Transitioning Parties on a non-confidential basis from a source other than the Company, provided that such source is not bound by a confidentiality agreement with respect to such information.  The foregoing notwithstanding, Transitioning Parties may disclose Confidential Information to the extent required by law or regulation, including but not limited to court orders, subpoenas, civil investigative demands and interrogatories. 

3.

Mutual Release of Claims 

a.

In consideration for the services to be performed hereunder and the mutual promises made herein, the sufficiency and receipt of which are hereby acknowledged, and subject to Section 3(c) below, the Company and the Shareholder and their representatives, including, without limitation, their agents, employees, servants, directors, officers, attorneys, whether now employed or previously employed, as well as their subsidiaries, affiliates, successors, heirs, administrators and assigns and any of their respective agents, employees, servants, directors and officers, hereby release and discharge the Transitioning Parties and their representatives, including, without limitation, their agents, employees, servants, directors, officers, attorneys, whether now employed or previously employed, as well as their subsidiaries, affiliates, successors, heirs, administrators and assigns and any of their respective agents, employees, servants, directors and officers from any and all claims, actions, causes of action, suits, debts(including all open invoices), dues, sums of money, accounts, reckoning, bonds bills, specialties, covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, executions, claims and demands  at law, in admiralty, or equity(all of the foregoing being hereinafter sometimes collectively referred to as “the Claims”) against the Transitioning Parties, of which the Company’s continuing directors   or the Shareholder are presently aware,  including but not limited to any claims relating to the legal standing of the agreement between the Company and Investor Communications Company, LLC, Tripoint Capital Advisors, LLC    or Law Offices of Louis E. Taubman, PC; claims regarding any expenses submitted by Transitioning Parties during their employment by or service on behalf of the Company; Claims regarding any actual or perceived conflicts between the Company and the Transitioning Parties or between one or more of the Transitioning Parties; Claims regarding the status of Douglas MacLellan or Mark Elenowitz as directors of the Company; Claims arising from the performance of their duties 

3

in the ordinary course, on behalf of the Company, excluding  any matters set forth in Section 3 (c) below, any Claims which the Company or the Shareholder hereafter become aware      of ;provided, however, that the Company, its current directors and the Shareholder shall  be deemed to be aware of any information which has been included in any public filings  or releases made by the Company (or in any public filings made by the Transitioning Parties pursuant to Sections 13 or 16 of the Securities Exchange Act of 1934, as amended) or any information which has been previously provided to the continuing directors or the Shareholder in correspondence (including  email).  

b. 

For and in consideration of the mutual promises made herein, the sufficiency of which are hereby acknowledged, Transitioning Parties  and their representatives, including, without limitation, their agents, employees, servants, directors, officers, attorneys, whether now employed or previously employed, as well as their subsidiaries, affiliates, successors, heirs, administrators and assigns and any of their respective agents, employees, servants, directors and officers hereby release and discharge the Company and the Shareholder and their representatives, including, without limitation, their agents, employees, servants, directors, officers, attorneys, whether now employed or previously employed, as well as their subsidiaries, affiliates, successors, heirs, administrators and assigns and any of their respective agents, employees, servants, directors and officers from any and all Claims  of which the Transitioning Parties or their executive officers, members or directors are presently aware.

c. 

Notwithstanding the foregoing, nothing in this Agreement is intended to, or shall have the effect of, releasing  or providing indemnification (A) with respect to any unknown claims or (B) with respect to current or former directors of the Company, any Claims arising from (i) any breach of the director’s duty of loyalty to the Company or its stockholders, (ii) director acts or omissions not in good faith, not based on actions which the director reasonably believed  to be in ( or not opposed to) the bests interests of the Company, or which involved intentional misconduct or knowing violation of law; (iii) any transaction from which a director derived an improper personal benefit; (iv) any act or omission occurring prior to the individual’s becoming a director; or (v) any acts otherwise prohibited by Section 78.138 of the Nevada Revised Statutes. In addition, nothing contained herein is intended to or shall release or indemnify any current or former directors against any Claims relating to any criminal action or proceeding, unless the current or former director had no reasonable cause to believe his conduct was unlawful.

d.

The parties warrant and represent that no other person or entity has any interest in the matters released and/or assigned herein, and that they have not assigned or transferred or purported to assign or transfer to any person or entity all or any portion of the matters released herein.

e.

The releases set forth herein shall inure to the benefit of the parties and shall be binding upon them, their assigns, representatives and successors.

4

4.

Non-Disparagement

a.

The parties agree that neither they nor their affiliates, agents, employees or consultants, including but not limited to investor relations consultants for the Company, will  voluntarily make any negative, derogatory or disparaging statements, written or oral, about each other, their agents, representatives or affiliates.  

b.

The parties further agree that (i) neither the Mutual Release set forth in Section 3, nor anything contained herein is or shall be construed to be an admission of liability by the Transitioning Parties or anyone else or an admission of the violation of any law, order, statute, rule or regulation and (ii) this Agreement may not be used as evidence in any subsequent proceeding except in a proceeding which alleges a breach of this Agreement.

c.

The Company will file a press release and Current Report on Form 8-K within the time frame required by Form 8-K, disclosing the resignations of Messrs. MacLellan and Elenowitz.  

d.

The Shareholder agrees not to incite or encourage any lawsuits from Chinese shareholders.  

e.

Any claimed breach of Section 4(a) shall be subject to arbitration pursuant to Section 9(b) below.  If it is determined in any such proceeding that the Company, the Shareholder or their affiliates, agents, employees or consultants have breached Section 4(a), then the “lock-up” provisions contained in Section 7, shall be deemed to have been waived by the Company and the Shareholder.    If, on the other hand,  it is determined in any such proceeding that the Company, the Shareholder or their affiliates, agents, employees or consultants have not  breached Section 4(a), or that any of the Transitioning Parties, or their affiliates, agents, employees or consultants has breached Section 4(a), then the restrictions on their resale of AMX Shares set forth in Section 7(a) shall apply for  twelve (12) additional calendar months, beyond any period  remaining  from  the original  lock-up under  Section 7(a), with  the remainder of the transfer restriction period  in Section 7(b) being applicable immediately after the expiration of the extended  lock-up period.

5. 

Indemnification 

a.

The Transitioning Parties, severally and not jointly, agree to indemnify ,and hold harmless the Company (including each of its directors, officers, employees, partners and agents) and the Shareholder, with respect to any liability (and actions in respect thereof) 

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arising from any act or omission by a Transitioning Party, which was not released by the terms of Section 3(a) hereto, for any legal or other expenses reasonably incurred in connection with  investigating or defending any such liability or action, provided that the indemnifying party shall have the  right to control the defense of any claim giving rise to such liability as long the indemnifying party employs counsel reasonably satisfactory to the indemnified party and no such claim shall be settled  without the consent of the indemnifying party.   

b.

The Company and the Shareholder, severally and not jointly, agree to indemnify, and hold harmless the Transitioning Parties (including each of their directors, officers, employees, partners and agents), with respect to any liability (and actions in respect thereof) arising from any actions or omissions by either the Company or the Shareholder, which was not released by the terms of Section 3(b) hereto, for any legal or other expenses reasonably incurred in connection with  investigating or defending any such liability or action, provided that the indemnifying party shall have the  right to control the defense of any claim giving rise to such liability as long as the indemnifying party employs counsel reasonably satisfactory to the indemnified party and no such claim shall be settled  without the consent of the indemnifying party.   

6.

Resignation by Transitioning Parties

a.

Prior to or concurrently with the execution of this Agreement by the parties, the Transitioning Parties will have resigned from all positions of employment by or service on behalf of the Company and, the Transitioning Parties hereby confirm that except for this Agreement, any agreements currently in place between the Company and the Transitioning Parties shall be immediately terminated and of no further force effect.  To the extent requested, Doug MacLellan and Mark Elenowitz will provide separate letters confirming their resignation from the Board of Directors.

b.

Except as specifically provided for herein, no further fees or expenses shall be due to any of the Transitioning Parties from the Company or to the Company from any of the Transitioning Parties.

7. Restrictions on Shares Held by Transitioning Parties

a.

Each of the Transitioning Parties hereby represents and warrants (severally and not 

jointly) that Schedule A hereto sets forth a true and correct list of the record holders and number of all outstanding shares of the Company’s stock (the “AXM Shares”), and all options and warrants with respect to AXM Shares, held of record or beneficially by the Transitioning Parties or any of their Affiliates (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended.). (The total number of outstanding AXM  Shares set forth on such Schedule A are sometimes hereinafter referred to as the “Scheduled Shares.”)

6

b.

Each of the Transitioning Parties agrees not to transfer or permit the transfer of any of the Scheduled Shares, voluntarily or otherwise, prior to April 1, 2006. However, during each calendar month thereafter until December 31, 2006, the Transitioning Parties as a group may sell or otherwise transfer in such month up to the number of AXM Shares which will not in the aggregate, exceed the lesser of: (i) 1/9 of the Scheduled Shares or (ii) three percent (3%) of the total trading volume for AXM Shares for the prior month, as reported by AMEX. This provision (and the other provisions of Section 7) shall also be applicable to any AXM Shares which are issued hereafter to the Transitioning Parties or any of their Affiliates pursuant to any outstanding warrants or options (collectively, the “Additional Shares”), and in such case the volume limitation set forth in Section 7(b) (i) shall be 1/9 of the sum of the Scheduled Shares, plus the Additional Shares. 

c.

At the end of each month beginning April 2006 and ending on December 31, 2006, the Transitioning Parties will provide redacted copies of account statements showing sales or other transfers of any of the Scheduled Shares or of any Additional Shares.

d.

In the event that the number of Scheduled Shares or Additional Shares transferred in any month exceeds the limitations set forth in Section 7(b), the Transitioning Parties shall, within fifteen (15) days after such unauthorized transfers, pay to the Company, as liquidated damages, an amount equal to the cash or other proceeds received directly or indirectly by any person from the sale or other transfer of any AXM Shares which exceed such limitations. Each of the Transitioning Parties shall be responsible for the payment to the Company of any proceeds received directly or indirectly by it or by any Affiliates (as defined above.) The Parties confirm that they are providing for liquidated damages, because it is impractical or extremely difficult to fix the actual damages to the Company that will result from any unauthorized transfers  and they agree that the liquidated damages are reasonable in light of the significant damages that may be caused to the Company by  such transfers, including from the  negative impact  on the market price for AMX Shares and on the Company’s ability to raise additional capital  to finance the Company’s further growth.

8. Term and Effective Date

Sections 1 and 6(a) of this agreement are effective upon execution by the parties and shall continue in effect until November 15, 2005.  All other provisions hereof shall become effective on the date hereof and shall remain in effect thereafter, including after any termination of this Agreement.

9.    General Provisions 

a.

 This Agreement shall be governed by and under the laws of the State of Nevada without giving effect to conflicts of law principles.  If any provision hereof is found invalid or unenforceable, then the remainder of this Agreement shall remain in full force and effect, to the maximum extent permitted by law

7

b.

 Any dispute arising under or in any way related to this Agreement shall be submitted to binding arbitration by the American Arbitration Association in accordance with the Association's commercial rules then in effect.  The arbitration shall be conducted in Carson City, Nevada.  The arbitration shall be binding on the parties and the arbitration award may be confirmed by any court of competent jurisdiction and, the prevailing party in any arbitration proceeding  shall be entitled to recover all of its attorneys fees and arbitration fees and other costs incurred in connection with this Agreement.

c.

This Agreement constitutes the entire agreement and final understanding of the parties with respect to the subject matter hereof and supersedes and terminates all prior and/or contemporaneous understandings and/or discussions between the parties, whether written or verbal, express or implied, relating in any way to the subject matter hereof.  This Agreement may not be altered, amended, modified or otherwise changed in any way except by a written agreement, signed by both parties. 

d.

Any notice or other communication pursuant hereto shall be given to a party at its address first set forth above by (i) personal delivery, (ii) commercial overnight courier with written verification of receipt, or (iii) registered or certified mail.  If so mailed or delivered, a notice shall be deemed given on the earlier of the date of actual receipt or three (3) days after the date of authorized delivery.  Any notices to individual parties shall be sent in the case (i) of Mark Elenowitz, Louis Taubman or Mike Boswell to the address set forth above for Tripoint Capital Advisors, LLC; (ii) of Douglas MacLellan to the address set forth above for the MacLellan Group LLC; (iii) in the case of Tom Bostic Smith to the address set forth above for Investor Communications Company, LLC; and in the case of Wei Shi Wang to the address set forth above for the Company.

e.

 This Agreement may be executed in counterparts, each one of which shall constitute an original and all of which taken together shall constitute one document. 

f.

Each party to this Agreement hereby represents and warrants that it has the actual authority to enter into this Agreement and, in the case of the Company, that this Agreement has been approved by its Board of Directors. 

g.

Nothing contained in any other provisions of this Agreement, shall in anyway restrict any of the parties from taking any actions which they believe are necessary or appropriate to comply with any SEC or other regulatory requirements.

h.

The parties acknowledge that each party and its counsel have reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments, schedules or exhibits thereto.

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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly executed as of the date first written above.

AXM Pharma, Inc.

By:_____________________________

Wei Shi Wang

________________________________

Wei Shi Wang

Tripoint Capital Advisors, LLC

By:_____________________________

Mike Boswell,

Manager

The MacLellan Group, LLC

By:_____________________________

Douglas Maclellan,

President

Investor Communications Company, LLC.

By:_____________________________

Mark Elenowitz,

President/Managing Director

Law Offices of Louis E. Taubman, PC

By:_____________________________

Louis Taubman,

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President

_________________________________

Douglas MacLellan

_________________________________

Mark Elenowitz

_________________________________

Mike Boswell

_________________________________

Louis Taubman

_________________________________

Tom Bostic Smith

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Schedule A to Transition Agreement

Tom Bostic  - 12,500  shares.

Louis Taubman controls Namaste, LLC - 5,000 shares.

Doug MacLellan & Nora H. MacLellan  513,500 shares. ( Bear Stearns) 

Tripoint -  503,500 shares. 

ICC  24,000 shares.

Mark Elenowitz 400 shares.

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