Document:

ex10-8amdtr.htm

Exhibit 10-8

    AMENDED
AND RESTATED DECLARATION OF TRUST

     

    by
and among

     

    WILMINGTON
TRUST COMPANY,

     

    as
Delaware Trustee,

     

    

     

    

    WILMINGTON
TRUST COMPANY,

     

    

     

    as
Institutional Trustee,

     

    TEMECULA
VALLEY BANCORP INC.,

     

    as
Sponsor,

     

    and

     

    STEPHEN
H. WACKNITZ, LUTHER J. MOHR and

     

    

     

    DONALD
A. PITCHER,

    as
Administrators,

    Dated
as of September 20, 2004

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    TABLE OF
CONTENTS

    
    

     

    
      
        	 
      	
                Page

              
	
                ARTICLE
      I INTERPRETATION AND DEFINITIONS

              	
                1

              
	
                Section
      1.1.  Definitions.

              	
                1

              
	 
      	 
      
	
                ARTICLE
      II ORGANIZATION

              	
                7

              
	
                Section
      2.1.  Name

              	
                7

              
	
                Section
      2.2.  Office.

              	
                7

              
	
                Section
      2.3.  Purpose.

              	
                7

              
	
                Section
      2.4.  Authority

              	
                8

              
	
                Section
      2.5.  Title to Property of the Trust.

              	
                8

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

              	
                8

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

              	
                11

              
	
                Section
      2.8.  Powers and Duties of the Institutional
      Trustee.

              	
                12

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

              	
                13

              
	
                Section
      2.10. Certain Rights of Institutional Trustee.

              	
                14

              
	
                Section
      2.11. Delaware Trustee.

              	
                16

              
	
                Section
      2.12. Execution of Documents

              	
                17

              
	
                Section
      2.13. Not Responsible for Recitals or Issuance of
    Securities.

              	
                17

              
	
                Section
      2.14. Duration of Trust.

              	
                17

              
	
                Section
      2.15. Mergers

              	
                17

              
	 
      	 
      
	
                ARTICLE
      III SPONSOR

              	
                18

              
	
                Section
      3.1. Sponsor’s Purchase of Common Securities.

              	
                18

              
	
                Section
      3.2. Responsibilities of the Sponsor

              	
                18

              
	
                Section
      3.3. Expenses.

              	
                19

              
	
                Section
      3.4. Right to Proceed.

              	
                19

              
	 
      	 
      
	
                ARTICLE
      IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

              	
                19

              
	
                Section
      4.1. Number of Trustees.

              	
                19

              
	
                Section
      4.2. Delaware Trustee.

              	
                20

              
	
                Section
      4.3. Institutional Trustee; Eligibility

              	
                20

              
	
                Section
      4.4. Certain Qualifications of the Delaware Trustee
    Generally

              	
                20

              
	
                Section
      4.5. Administrators

              	
                20

              
	
                Section
      4.6. Initial Delaware Trustee

              	
                21

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

              	
                21

              
	
                Section
      4.8. Vacancies Among Trustees

              	
                22

              
	
                Section
      4.9. Effect of Vacancies.

              	
                22

              
	
                Section
      4.10. Meetings of the Trustees and the Administrators

              	
                22

              
	
                Section
      4.11. Delegation of Power.

              	
                23

              
	
                Section
      4.12. Conversion, Consolidation or Succession to Business

              	
                23

              
	 
      	 
      
	
                ARTICLE
      V DISTRIBUTIONS

              	
                23

              
	
                Section
      5.1.  Distributions.

              	
                23

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                ARTICLE
      VI ISSUANCE OF SECURITIES

              	
                24

              
	
                Section
      6.1.  General Provisions Regarding Securities

              	
                24

              
	
                Section
      6.2.  Paying Agent, Transfer Agent and
Registrar.

              	
                24

              
	
                Section
      6.3.  Form and Dating.

              	
                25

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

              	
                25

              
	
                Section
      6.5.  Temporary Securities.

              	
                25

              
	
                Section
      6.6.  Cancellation.

              	
                26

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

              	
                26

              
	 
      	 
      
	
                ARTICLE
      VII DISSOLUTION AND TERMINATION OF TRUST

              	
                27

              
	
                Section
      7.1.  Dissolution and Termination of Trust

              	
                27

              
	 
      	 
      
	
                ARTICLE
      VIII TRANSFER OF INTERESTS

              	
                28

              
	
                Section
      8.1.  General

              	
                28

              
	
                Section
      8.2.  Transfer Procedures and Restrictions.

              	
                29

              
	
                Section
      8.3.  Deemed Security Holders.

              	
                31

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

              	
                31

              
	
                Section
      9.1.  Liability

              	
                31

              
	
                Section
      9.2.  Exculpation.

              	
                32

              
	
                Section
      9.3.  Fiduciary Duty.

              	
                32

              
	
                Section
      9.4.  Indemnification

              	
                32

              
	
                Section
      9.5.  Outside Businesses.

              	
                34

              
	
                Section
      9.6.  Compensation; Fee.

              	
                35

              
	 
      	 
      
	
                ARTICLE
      X ACCOUNTING

              	
                35

              
	
                Section
      10.1. Fiscal Year.

              	
                35

              
	
                Section
      10.2. Certain Accounting Matters

              	
                35

              
	
                Section
      10.3. Banking

              	
                36

              
	
                Section
      10.4. Withholding.

              	
                36

              
	 
      	 
      
	
                ARTICLE
      XI AMENDMENTS AND MEETINGS

              	
                36

              
	
                Section
      11.1. Amendments.

              	
                36

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

              	
                37

              
	 
      	 
      
	
                ARTICLE
      XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE
      TRUSTEE

              	
                39

              
	
                Section
      12.1. Representations and Warranties of Institutional
    Trustee.

              	
                39

              
	
                Section
      12.2. Representations of the Delaware Trustee.

              	
                39

              
	 
      	 
      
	
                ARTICLE
      XIII MISCELLANEOUS

              	
                40

              
	
                Section
      13.1. Notices.

              	
                40

              
	
                Section
      13.2. Governing Law.

              	
                41

              
	
                Section
      13.3. Intention of the Parties.

              	
                41

              
	
                Section
      13.4. Headings.

              	
                41

              
	
                Section
      13.5. Successors and Assigns.

              	
                41

              
	
                Section
      13.6. Partial Enforceability.

              	
                41

              
	
                Section
      13.7. Counterparts

              	
                42

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                Annex
      I .........................Terms of Securities

              	 
      
	
                Exhibit
      A-1 ...................Form of Capital Security
Certificate

              	 
      
	
                Exhibit
      A-2 ...................Form of Common Security Certificate

              	 
      
	 
      	 
      
	
                Exhibit
      B .......................Specimen of Initial Debenture

              	 
      
	
                Exhibit
      C .......................Placement Agreement

              	 
      

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    AMENDED
AND RESTATED

    

    DECLARATION
OF TRUST

     

    OF

     

    TEMECULA
VALLEY STATUTORY TRUST III

    

    September
20, 2004

     

    AMENDED
AND RESTATED DECLARATION OF TRUST (“Declaration”) dated and effective as of
September 20, 2004, 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 Temecula Valley
Statutory Trust III (the “Trust”), a statutory trust under the Statutory Trust
Act (as defined herein) pursuant to a Declaration of Trust dated as of September
7, 2004 (the “Original Declaration”), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on September  7, 2004, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain debentures of the Debenture Issuer (as defined
herein);

     

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

     

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

     

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

     

    ARTICLE
I

     

    INTERPRETATION
AND DEFINITIONS

     

    Section 1.1. Definitions. Unless the context otherwise
requires:

     

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

    

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

    

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

    

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

    

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

     

    “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 Stephen H. Wacknitz, Luther J. Mohr and Donald A. Pitcher, solely
in such Person’s capacity as Administrator of the Trust created and continued
hereunder and not in such Person’s individual capacity, or such Administrator’s
successor in interest in such capacity, or any successor appointed as herein
provided.

     

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

     

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

     

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

     

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

    

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

    

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

     

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

     

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

     

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

     

    “Certificate”
means any certificate evidencing Securities.

     

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

     

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

     

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

    

    “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 Temecula Valley Bancorp Inc., 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
2034 to be issued by the Debenture Issuer under the Indenture.

     

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

     

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

     

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

     

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

     

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

    5.1.

     

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

     

    “Distribution
Period” means (i) with respect to the Distribution paid on the first
Distribution Payment Date, the period beginning on (and including) the date of
original issuance and ending on (but excluding) the Distribution Payment Date in
December 2004 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 2004, the rate per annum of 4.07%, and for each Distribution Period
beginning on or after the Distribution Payment Date in December 2004, the Coupon
Rate for such Distribution Period.

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “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.

    

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

    

    “Officers’
Certificates” means, with respect to any Person, a certificate signed by two
Authorized Officers of such Person.  Any Officers’ Certificate
delivered with respect to compliance with a condition or covenant providing for
it in this Declaration shall include: (a) a statement that each officer signing
the Certificate has read the covenant or condition and the definitions relating
thereto; (b)  a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Certificate; (c)  a statement that each such officer has made such
examination or investigation as, in such officer’s opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and (d)  a statement as
to whether, in the opinion of each such officer, such condition or covenant has
been complied with. “OTS” has the meaning set forth in paragraph 3 of Annex I.
“Paying Agent” has the meaning specified in Section 6.2.

    

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

    

    “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.

    

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

    

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

    

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

    

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

    

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

    

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

    successor
legislation.

    

    “Special
Event” has the meaning set forth in paragraph 4(a) of Annex I. “Special
Redemption Date” has the meaning set forth in paragraph 4(a) of Annex I.
“Special Redemption Price” has the meaning set forth in paragraph 4(a) of Annex
I. “Sponsor” means Temecula Valley Bancorp Inc., 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 4.7(e). “Successor
Institutional Trustee” has the meaning set forth in Section 4.7(b).

    

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

    

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

    

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

    

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

    

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

    

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

    

    “Treasury
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 “Temecula
Valley Statutory Trust III,” as such name may be modified from time to time by
the Administrators following written notice to the Holders of the Securities.
The Trust’s activities may be conducted under the name of the Trust or any other
name deemed advisable by the Administrators.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     (A) the
issuance and sale of the Securities;

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

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

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

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

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

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

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

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

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

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

     

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

     

     (A)  the
establishment of the Property Account;

     

     (B)  the
receipt of the Debentures;

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

    
    

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

     

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

     

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

     

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

     

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

    

    (e)  All
expenses incurred by the Administrators or the Trustees pursuant to this Section
2.6 shall be reimbursed by the Sponsor, and the Trustees and the Administrators
shall have no obligations with respect to such expenses.

    

    (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
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 4.7.
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.

     

     (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
4.7.

    

    (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 6.7), the Institutional
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

     

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

     

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

     

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

     

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

     

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

    

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

     

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

     

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

    

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

    2.9:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

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

    

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

     

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

     

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

     

    Section
2.15. Mergers.

     

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

     

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

    

    
    

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

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

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

     

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

     

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

     

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

     

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

       

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

      

    

    
    

     

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

     

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

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

    

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

     

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

     

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

     

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

     

    

    ARTICLE
III

    

    SPONSOR

     

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

     

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

     

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

    

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

    

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

     

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

     

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

     

    (a)  a
natural person who is a resident of the State of Delaware; or

     

    (b)  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.

     

    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 4.7.

     

     (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. Certain Qualifications
of the Delaware Trustee Generally.  The Delaware Trustee shall
be a U.S. Person and either a natural person who is at least 21 years of age or
a legal entity that shall act through one or more Authorized
Officers.

     

    Section 4.5. 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 Stephen H. Wacknitz,
Luther J. Mohr and Donald A. Pitcher.  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
4.6. Initial
Delaware Trustee. The
initial Delaware Trustee shall be Wilmington Trust Company.

       

      Section
4.7. 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 4.7.

     

     (b)  Subject
to Section 4.7(a), a Relevant Trustee may resign at any time by giving written
notice thereof to the Holders of the Securities and by appointing a successor
Relevant Trustee.  Upon the resignation of the Institutional Trustee,
the Institutional Trustee shall appoint a successor by requesting from at least
three Persons meeting the eligibility requirements their expenses and charges to
serve as the successor Institutional Trustee on a form provided by the
Administrators, and selecting the Person who agrees to the lowest expense and
charges (the “Successor Institutional Trustee”). If the instrument of acceptance
by the successor Relevant Trustee required by this Section 4.7 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 4.7.

     

     (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 4.7.  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 4.7.  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 4.7 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 4.7 (with the successor being a Person who
satisfies the eligibility requirement for a Delaware Trustee set forth in this
Declaration) (the “Successor Delaware
Trustee”).

     

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

     

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

     

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

     

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

    

    Section 4.8. 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
4.7.

     

    Section 4.9. 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 4.7, 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 4.10. Meetings
of the Trustees and the Administrators. Meetings of the
Administrators shall be held from time to time upon the call of an
Administrator. Regular meetings of the Administrators may be held in person in
the United States or by telephone, at a place (if applicable) and time fixed by
resolution of the Administrators.  Notice of any in-person meetings of
the Trustees with the Administrators or meetings of the Administrators shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 48 hours before such meeting.
Notice of any telephonic meetings of the Trustees with the Administrators or
meetings of the Administrators or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting.  The presence (whether in person or by telephone) of a
Trustee or an Administrator, as the case may be, at a meeting shall constitute a
waiver of notice of such meeting except where the Trustee or an Administrator,
as the case may be, attends a meeting for the express purpose of objecting to
the transaction of any activity on the grounds that the meeting has not been
lawfully called or convened.  Unless provided otherwise in this
Declaration, any action of the Trustees or the Administrators, as the case may
be, may be taken at a meeting by vote of a majority of the Trustees or the
Administrators present (whether in person or by telephone) and eligible to vote
with respect to such matter, provided that a Quorum is present, or without a
meeting by the unanimous written consent of the Trustees or the
Administrators.  Meetings of the Trustees and the Administrators
together shall be held from time to time upon the call of any Trustee or an
Administrator.

     

    Section
4.11. 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 4.12. 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 4.7(i).

     

    ARTICLE
V

    

    DISTRIBUTIONS

     

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

    

    ARTICLE
VI

     

    ISSUANCE
OF SECURITIES

    

    Section
6.1. General
Provisions Regarding Securities.

     

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

     

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

     

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

     

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

     

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

    

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

     

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

     

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

     

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

     

    If:

     

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

     

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

    

     

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

    

     

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

     

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

     

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

     

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

    

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

     

     (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 nonpayment of
the principal of the Debentures that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.7 of the
Indenture.

    

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

     

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

     

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

     

    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 September 20, 2039, the expiration of the term of the
Trust;

     

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

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
VIII

    

    TRANSFER
OF INTERESTS

    Section
8.1. General.

     

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

     

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

    

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

     

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

     

     (e) The
Trust shall not be required (i) to issue, register the transfer of, or exchange
any Securities during a period beginning at the opening of business five days
before the day of any selection of Securities for redemption and ending at the
close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all Holders of the Securities to be
redeemed, or

     (ii) to
register the transfer or exchange of any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

    

    Section
8.2. Transfer
Procedures and Restrictions.

     

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

     

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

    

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

     

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

     

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

     

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

     

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

     

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

     

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

    

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

     

    ARTICLE
IX

     

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

    

    Section
9.1. Liability.

     

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

     

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

     

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

     

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

     

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

    

    Section
9.2. Exculpation.

     

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

     

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

    

    Section
9.3. Fiduciary
Duty.

     

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

     

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

     

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

     

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

     

    Section
9.4. Indemnification.

     

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

     

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

     

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

     

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

     

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

     

     (f)  The
Trustees, at the sole cost and expense of the Sponsor, retain the right to
representation by counsel of its own choosing in any action, suit or any other
proceeding for which it is 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 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.

    

    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 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 (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 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

    

    (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
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):

     

    Temecula
Valley Statutory Trust III

    c/o
Temecula Valley Bancorp Inc.

    27710
Jefferson Avenue, A-100

    Temecula,
California 92590

    Attention:
Donald A. Pitcher

    Telecopy:  909-694-9050

     

    (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):

     

    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):

     

    
      Temecula
Valley Bancorp Inc.

      27710
Jefferson Avenue, A-100

      Temecula,
California 92590

      Attention:
Donald A. Pitcher

      Telecopy:  909-694-9050

       

      (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.

     

    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

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
I

     

    TERMS OF
SECURITIES

     

    Pursuant
to Section 6.1 of the Amended and Restated Declaration of Trust, dated as of
September 20, 2004 (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)  8,000
Floating Rate Capital Securities of Temecula Valley Statutory Trust III (the
“Trust”), with an aggregate stated liquidation amount with respect to the assets
of the Trust of eight million dollars ($8,000,000.00) 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)  248
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 2004 at a rate per annum of 4.07% and
shall bear interest for each successive Distribution Period beginning on (and
including) the Distribution Payment Date in December 2004, 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 2.20% (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 20, June 20,
September 20 and December 20 of each year, or if such day is not a Business Day,
then the next succeeding Business Day (each a “Distribution Payment Date”),
commencing on the Distribution Payment Date in December 2004 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 Extension 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 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 five 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, 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 September 20, 2034. 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 September 2009, 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 Dow Jones Telerate
Service or such other page as may replace Page 3750 on that service or such
other service or services as may be nominated by the British Bankers’
Association as the information vendor for the purpose of displaying London
interbank offered rates for U.S. dollar deposits;

     

     (2)  if
such rate cannot be identified on the related Determination Date, the 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.

    

    “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 September 20, 2034.

     

    “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 September 2009.

     

    “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

            	
              Special
      Redemption Price

            
	
              Redemption
      Date Occurs

            	 
      
	
              December
      2004

            	
              104.625%

            
	
              March
      2005

            	
              104.300%

            
	
              June
      2005

            	
              104.000%

            
	
              September
      2005

            	
              103.650%

            
	
              December
      2005

            	
              103.350%

            
	
              March
      2006

            	
              103.000%

            
	
              June
      2006

            	
              102.700%

            
	
              September
      2006

            	
              102.350%

            
	
              December
      2006

            	
              102.050%

            
	
              March
      2007

            	
              101.700%

            
	
              June
      2007

            	
              101.400%

            

    

     

    
      	
              September
      2007

            	
              101.050%

            
	
              December
      2007

            	
              100.750%

            
	
              March
      2008

            	
              100.450%

            
	
              June
      2008

            	
              100.200%

            
	
              September
      2008 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.

     

     (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 five days before any selection for redemption of the
Capital Securities and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been given to all
Holders of the Capital Securities to be so redeemed or (ii) register the
transfer of or exchange any Capital Securities so selected for redemption, in
whole or in part, except for the unredeemed portion of any Capital Securities
being redeemed in part.

     (iii)
Redemption/Distribution Notices shall be sent by the Administrators on behalf of
the Trust to (A) in respect of the Capital Securities, the Holders thereof and
(B) in respect of the Common Securities, the Holder thereof. (iv) Subject to the
foregoing and applicable law (including, without limitation, United States
federal securities laws), and provided that the acquiror is not the Holder of
the Common Securities or the obligor under the Indenture, the Sponsor or any of
its

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

     

     5.           Voting Rights - Capital
Securities.

     

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

     

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

    

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

     

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

     

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

     

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

     

    6.           Voting Rights - Common
Securities.

     

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

     

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

     

     (c)  Subject
to Section 6.7 of the Declaration and only after each Event of Default (if any)
with respect to the Capital Securities has been cured, waived, or otherwise
eliminated and subject to the requirements of the second to last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waiving any past default and its consequences that is
waivable under the Indenture, or (iii) exercising any right to rescind or annul
a declaration that the principal of all the Debentures shall be due and payable;
provided, however, that, where a consent or action under the Indenture would
require a Super Majority, the Institutional Trustee may only give such consent
or take such action at the written direction of the Holders of at least the
proportion in liquidation amount of the Common Securities which the relevant
Super Majority represents of the aggregate principal amount of the Debentures
outstanding. Notwithstanding this paragraph 6(c), the Institutional Trustee
shall not revoke any action previously authorized or approved by a vote or
consent of the Holders of the Capital Securities. Other than with respect to
directing the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action described in (i),
(ii) or (iii) above, unless the Institutional Trustee has obtained an opinion of
tax counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights, to the
fullest extent permitted by law, under the Declaration, any Holder of the Common
Securities may institute a legal proceeding directly against any Person to
enforce the Institutional Trustee’s rights under the Declaration, without first
instituting a legal proceeding against the Institutional Trustee or any other
Person.

     

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

     

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

     

    7.           Amendments to Declaration
and Indenture.

     

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

     

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

    

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

     

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

    

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

    

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

    

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

    

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

    

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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EXHIBIT
A-1

    

    FORM
OF CAPITAL SECURITY CERTIFICATE

     

    [FORM OF
FACE OF SECURITY]

     

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

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

     

    THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR
OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT
IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR
HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS
ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR
ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT
PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO
SUCH PURCHASE OR HOLDING.  ANY PURCHASER OR HOLDER OF THE SECURITIES
OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
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     8,000 Capital Securities

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

     

    September
20, 2004

     

    Certificate
Evidencing Floating Rate Capital Securities

     

    of

     

    Temecula
Valley Statutory Trust III

     

    (liquidation
amount $1,000.00 per Capital Security)

     

    Temecula
Valley Statutory Trust III, a statutory trust created under the laws of the
State of Delaware (the “Trust”), hereby certifies that Hare & Co. (the
“Holder”), as the nominee of The Bank of New York, indenture trustee under the
Indenture dated as of September 20, 2004 among Preferred Term Securities XV,
Ltd., Preferred Term Securities XV, Inc. and The Bank of New York, is the
registered owner of capital securities of the Trust representing undivided
beneficial interests in the assets of the Trust, (liquidation amount $1,000.00
per capital security) (the “Capital Securities”). Subject to the Declaration (as
defined below), the Capital Securities are transferable on the books and records
of the Trust in person or by a duly authorized attorney, upon surrender of this
Certificate duly endorsed and in proper form for transfer.  The
Capital Securities represented hereby are issued pursuant to, and the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of September 20, 2004, among Stephen H. Wacknitz, Luther J. Mohr and Donald
A. Pitcher, as Administrators, Wilmington Trust Company, as Delaware Trustee,
Wilmington Trust Company, as Institutional Trustee, Temecula Valley Bancorp
Inc., 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

    
      	
               
      

            	
              IN
      WITNESS WHEREOF, the Trust has duly executed this certificate. TEMECULA
      VALLEY STATUTORY TRUST III

            

    

     

    
      	
               
      

            	
              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

            

    

    [FORM OF
REVERSE OF CAPITAL SECURITY]

    

     

    Distributions
payable on each Capital Security will be payable at an annual rate equal to
4.07% beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in December 2004 and at an annual
rate for each successive period beginning on (and including) the Distribution
Payment Date in December 2004, 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 2.20% (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 Dow Jones Telerate Service or such other page as may replace Page
3750 on that service or such other service or services as may be nominated by
the British Bankers’ Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits); (ii) if
such rate cannot be identified on the related Determination Date, the 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 .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 20, June 20, September 20 and December 20 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”), commencing on the
Distribution Payment Date in December 2004.  The Debenture Issuer has
the right under the Indenture to defer payments of interest on the Debentures,
so long as no Extension 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.

    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.

    

    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     248 Common Securities

     

    September
20, 2004

     

    Certificate
Evidencing Floating Rate Common Securities

     

    of

     

    Temecula
Valley Statutory Trust III

     

    Temecula
Valley Statutory Trust III, a statutory trust created under the laws of the
State of Delaware (the “Trust”), hereby certifies that Temecula Valley Bancorp
Inc. (the “Holder”) is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust (the
“Common Securities”).  The Common Securities represented hereby are
issued pursuant to, and the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities shall in all
respects be subject to, the provisions of the Amended and Restated Declaration
of Trust of the Trust dated as of September 20, 2004, among Stephen H. Wacknitz,
Luther J. Mohr and Donald A. Pitcher, as Administrators, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Institutional
Trustee, Temecula Valley Bancorp Inc., 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.

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

     

    TEMECULA
VALLEY STATUTORY TRUST III

     

    By:

    Name:

    
      	
               
      

            	
              Title:
      Administrator

            

    

    [FORM OF
REVERSE OF COMMON SECURITY]

     

    

     

    Distributions
payable on each Common Security will be payable at an annual rate equal to 4.07%
beginning on (and including) the date of original issuance and ending on (but
excluding) the Distribution Payment Date in December 2004 and at an annual rate
for each successive period beginning on (and including) the Distribution Payment
Date in December 2004, 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 2.20% (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 Dow Jones Telerate Service or such other page as may replace Page
3750 on that service or such other service or services as may be nominated by
the British Bankers’ Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits); (ii) if
such rate cannot be identified on the related Determination Date, the 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 .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 20, June 20, September 20 and December 20 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”), commencing on the
Distribution Payment Date in December 2004. The Debenture Issuer has the right
under the Indenture to defer payments of interest on the Debentures, so long as
no Extension 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.

    

    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
Guarantee2

     

    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.

    

    EXHIBIT
B SPECIMEN OF INITIAL DEBENTURE

    (See
Document No. 16)

    

    EXHIBIT
C PLACEMENT AGREEMENT

    (See
Document No. 1)ex10-16.htm

Exhibit 10-16

    8-K DISCLOSURE
NOTICE

    

    Institutions
subject to SEC regulation may be required to disclosure certain information
regarding this amendment within four days
following implementation of this or any other executive or director
compensation program. Institutions should consult with SEC counsel as to
applicability of this requirement to this amendment.

    

    

    IMPORTANT NOTICE ABOUT THE
PRACTICE OF LAW AND ACCOUNTING

    

    Nothing
in this document should be construed as tax, legal, or accounting
advice.  Benmark does not practice law or accounting.  The
attached 409A Amendment contains recommended changes intended to facilitate
discussion between you and your legal and/or tax advisor.  Benmark
strongly recommends that you seek review by outside counsel before signing this
amendment.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    409A
Amendment

    to
the

    Temecula
Valley Bank

    Executive
Supplemental Compensation Agreement for

     Martin
Plourd

    

    Temecula
Valley Bank (“Company”) and Martin Plourd (“Executive”) originally entered into
the Temecula Valley Bank Executive Supplemental Compensation Agreement
(“Agreement”) on December 29, 2006.  Pursuant to Section 8.1 of the
Agreement, the Company and the Executive hereby adopt this 409A Amendment,
effective October 1, 2006.

    

    RECITALS

    

    This
Amendment is intended to bring the Agreement into compliance with the
requirements of Internal Revenue Code Section 409A.  Accordingly, the
intent of the parties hereto is that the Agreement shall be operated and
interpreted consistent with the requirements of Section
409A.  Therefore, the following changes shall be made:

    

    
      	
              1.  

            	
              Section
      1.3, “Change in Control”, shall be deleted in its entirety and replaced
      with the following Section 1.3:

            

    

    

    “Change
in Control” shall mean a change in ownership or control of the Company as
defined in Treasury Regulation §1.409A-3(i)(5) or any subsequently applicable
Treasury Regulation.

    

    
      	
              2.  

            	
              Section
      1.11, “Separation from Service”, shall be deleted in its entirety and
      replaced with the following Section
1.11:

            

    

    

    “Separation
from Service” shall mean the Executive has experienced a termination of
employment with the Bank.  For purposes of this Agreement, whether a
termination of employment or service has occurred is determined based on whether
the facts and circumstances indicate that the Bank and Executive reasonably
anticipated that no further services would be performed after a certain date or
that the level of bona fide services the Executive would perform after such date
(whether as an Executive or as an independent contractor) would permanently
decrease to no more than twenty percent (20%) of the average level of bona fide
services performed (whether as an Executive or an independent contractor) over
the immediately preceding thirty-six (36) month period (or the full period of
services to the Bank if the Executive has been providing services to the Bank
less than 36 months).  Facts and circumstances to be considered in
making this determination include, but are not limited to, whether the Executive
continues to be treated as an Executive for other purposes (such as continuation
of salary and participation in Executive benefit programs), whether similarly
situated service providers have been treated consistently, and whether the
Executive is permitted, and realistically available, to perform services for
other service recipients in the same line of business.  An Executive
will be presumed not to have separated from service where the level of bona fide
services performed continues at a level that is fifty percent (50%) or more of
the average level of service performed by the Executive during the immediately
preceding thirty-six (36) month period.

    

    
      	
              3.  

            	
              Section
      2.1.1, “Amount of Benefit”, shall be amended to delete the words “Eighty
      Thousand Dollars ($80,000)” and to replace them with the words “One
      Hundred Thousand Dollars
($100,000)”.

            

    

    

    
      	
              4.  

            	
              A
      new Section 9.15 shall be added as
follows:

            

    

    

    Certain Accelerated
Payments.  The Bank may make any accelerated distribution
permissible under Treasury Regulation 1.409A-3(j)(4) to the Executive of
deferred amounts, provided that such distribution(s) meets the requirements of
Section 1.409A-3(j)(4).

    

    
      	
              5.  

            	
              A
      new Section 9.16 shall be added as
follows:

            

    

    

    Subsequent Changes to Time
and Form of Payment.  The Bank may permit a subsequent change
to the time and form of benefit distributions.  Any such change shall
be considered made only when it becomes irrevocable under the terms of the
Agreement.  Any change will be considered irrevocable not later than
thirty (30) days following acceptance of the change by the Plan Administrator,
subject to the following rules:

    

    
      	
              (1)  

            	
              the
      subsequent deferral election may not take effect until at least twelve
      (12) months after the date on which the election is
  made;

            

    

    
      	
              (2)  

            	
              the
      payment (except in the case of death, disability, or unforeseeable
      emergency) upon which the subsequent deferral election is made is deferred
      for a period of not less than five (5) years from the date such payment
      would otherwise have been paid; and

            

    

    
      	
              (3)  

            	
              in
      the case of a payment made at a specified time, the election must be made
      not less than twelve (12) months before the date the payment is scheduled
      to be paid.

            

    

    

    

    Therefore,
the foregoing changes are agreed to.

    

    

    

    /s/Stephen H.
Wacknitz                                                                           /s/ Martin
Plourd

    For the
Company                                                                                Martin Plourd

    

    

    Date:  December
31,
2007                                                                Date:                      December
31, 2007

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