Document:

Exhibit 10.8

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made this 1st
day of May, 2004 between REVETT SILVER COMPANY,
a Montana Corporation with its principal office in Spokane Valley, Washington,
herein referred to as the “Corporation”, and Doug Ward of Hayden Idaho, herein
referred to as the “Employee” supersedes and replaces that Employment Agreement
by and between the Corporation and Employee dated October 1,2003.

In consideration of the mutual covenants and benefits
as herein set forth, the parties hereto agree as follows:

SECTION ONE

EMPLOYMENT

The Corporation hereby employs the Employee as Vice
President Corporate Development and the Employee hereby accepts such employment
and agrees to devote all of his efforts for the benefit of the Corporation and
to faithfully, industriously, and to the best of his ability, experience and
talents, perform all of his required and assigned duties. Employee shall
perform his duties subject to the general supervision and pursuant to the
orders, advice and direction of the CEO and the Board of Directors.

SECTION TWO

TERM OF EMPLOYMENT

The term of employment under the Agreement shall be
for a period of three years commencing May 1, 2004, and ending midnight April
30, 2007, but shall continue from year-to-year thereafter unless terminated as
hereinafter provided.

SECTION THREE

COMPENSATION

The Corporation shall pay Employee, and the Employee
shall accept from the Corporation, compensation at the minimum rate of U.S.
$120,000 per year, prorated and payable monthly or on such other basis as the
parties may hereafter agree. Employee shall be entitled to vacation periods in
line with the policies of the Corporation applicable to exempt employees,
provided, however, that the

Employee shall be entitled to a minimum paid vacation
of four (4) weeks in any calendar year. If the Employee fails to use all
vacation days in any calendar year, Employee shall be permitted to carry over
those vacation days into the next two calendar years.

SECTION FOUR

OTHER BENEFITS

In addition to the
compensation as provided in the previous Section Three hereof, the Corporation
shall at its expense provide for Employee the following additional benefits:

1.                                       Participation
in all of the Corporation’s benefits, now or hereafter in effect, including
medical, dental, vision, 401K plan, retirement plan, disability plan, bonuses
and any and all other plans that may be made available to employees.

2.                                       Payment
of dues in professional associations as may be required to maintain his
membership in those associations and the privilege of attending appropriate
seminars, conferences and education programs as may be necessary.

3.                                       Reimbursement
for all expenses incurred in connection with the performance of services to the
Corporation, including entertainment and travel and other expenses incident to
the duties undertaken hereunder; provided, however, that such expenses shall be
reasonable and necessary and that Employee shall submit bills and vouchers
supporting all requests for reimbursements in accordance with the Corporation’s
policies.

4.                                       An
appropriate office, which office will be located in the vicinity of Spokane,
Washington which it is agreed shall be the place of principal employment during
the term of the Agreement.

SECTION FIVE

TERMINATION

The Agreement will
terminate or may be terminated by any one of the following reasons:

 2
 

1.                                       Voluntarily
and without cause, subject to Sections Two and Six, upon at least one (1)
months prior written notice of termination by Corporation to the Employee or by
the Employee to the Corporation; or

2.                                       By
the Corporation for cause as hereinafter defined in Section Ten; or

3.                                       Upon
the Death or Disability of Employee.

4.                                       Upon
a Change of Control.

5.                                       Upon
Retirement.

SECTION SIX

SEVERANCE COMPENSATION

1.                                       Termination
by Employee or by Corporation With Cause

If Employee
voluntarily terminates his employment under the Agreement pursuant to Section
Five (1) or if the employment of the Employee is terminated by the Corporation
for cause, then all compensation and benefits as heretofore provided in
Sections Three and Four shall terminate immediately upon the effective date of
termination and no special severance compensation will be paid.

2.                                       Termination
by Corporation Without Cause

If the Corporation
terminates the Agreement for any reason except for cause as defined in Section
Ten then upon the termination of the Employee’s employment under the Agreement,
the Corporation shall pay an amount equal to eighteen (18) months’ salary. The
amount shall be paid in one lump sum on the date the Employee’s services terminate.
All employee benefits provided to the Employee shall be continued as if the Employee
was still an employee of the Corporation, for a period of one (1) year from the
date of termination or replacement of equal or better benefits from a new
employer. In the event Employee has existing stock options, they will be
honored in accordance with the terms of said options.

3.                                       Termination
by Death or Disability

If Employee dies before his employment hereunder or is
otherwise terminated, the Corporation shall immediately pay to his beneficiary
(to be named in writing by the Employee on signing of the Agreement and confirmed
if changed by him at any subsequent time, in writing, addressed

 3
 

to the secretary of the Corporation) an amount of
compensation equal to twelve (12) months’ salary. If no named beneficiary
survives him, the entire amount due him shall be paid to his estate. Said
compensation shall be in addition to that payable from any insurance coverage
providing for compensation upon Death or Disability. If Employee becomes
disabled, he shall be entitled to receive an amount of compensation equal to
twelve (12) month’s salary. “Disability” in the Agreement means a condition of physical
or mental illness causing one to be totally incapable of performing full-time
duties for a period longer than six months.

4.                                       Termination
Following Change of Control

(a)                                  For
purposes of the Agreement a Change in Control shall be deemed to have occurred
if (A) any individual partnership, firm, entity, corporation, association, trust,
unincorporated organization or other entity, or any syndicate or group deemed
to be a person under Section 14(d)(2) of the Exchange Act, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing 25% or more of the combined voting power of the Corporation’s then
outstanding securities entitled to vote in the election of directors of the Corporation;
or (B) as a result of or in connection with a contested election of directors,
the persons who were directors of the Corporation before such election shall
cease to constitute a majority of the Board.

(b)                                 Irrespective
of any other provisions in the Agreement regarding termination, if any of the
events described above constituting a Change in Control shall have occurred and
upon the subsequent termination of Employee’s employment during the term of the
Agreement, unless such termination is because of Employee’s Death, Disability
or by the Corporation for cause or by Employee for other than “Good Reason,”
Employee shall be entitled to and will receive no later than the fifth (5th)
day following the date of termination a lump sum severance payment equal to
three (3) times Employee’s current annual base salary. In addition, all
benefits then applicable to Employee shall be continued for a period of twelve
(12) months.

(c)                                  Employee
shall be entitled to terminate his employment for Good Reason. For purposes of
the Agreement, “Good Reason” means, without Employee’s express written consent,
any of the following:

 4
 

(i)            the assignment to Employee of any
duties inconsistent with Employee’s position, or Employee’s removal from such
position, or a substantial alteration in the nature or status of Employee’s responsibilities
from those in effect immediately prior to the Change in Control;

(ii)           a reduction by the Corporation in
Employee’s annual base salary as in effect on the date hereof or as the same
may be increased from time to time or a failure by the Corporation to increase Employee’s
salary at a rate commensurate with that of other similarly employed employees
of the Corporation;

(iii)          the relocation of the office of the
Corporation where Employee is employed at the time of the Change in Control
(the “CIC Location”) to a location more than fifty (50) miles away from the CIC
Location or the Corporation’s requiring Employee to be based more than fifty
(50) miles away from the CIC Location (except for required travel on the
Corporation’s business to an extent substantially consistent with Employee’s
business travel obligations just prior to the Change in Control);

(iv)          the failure by the Corporation to
continue to provide Employee with benefits at least as favorable to those
enjoyed by Employee under any of the Corporation’s life insurance, medical, health
and accident, disability, deferred compensation, pension, if any, or savings
plans in which Employee was participating at the time of the Change in Control,
the taking of any action by the Corporation which would directly or indirectly
materially reduce any of such benefits or deprive Employee of any material
fringe benefit enjoyed by Employee at the time of the Change in Control, or the
failure by the Corporation to provide Employee with the number of paid vacation
days to which Employee is entitled on the basis of years of service with the
Corporation in accordance with the Corporation’s normal vacation policy in
effect at the time of the Change in Control;

(v)           the failure of the Corporation to
obtain a satisfactory agreement from any successor to assume and agree to
perform the Agreement or if the business of the Corporation for which Employee’s
services are principally performed is sold at any time after a Change in
Control, the purchaser of such business fails to agree to provide Employee with
the same or a comparable position,

 5
 

duties, salary and
benefits as provided to Employee by the Corporation immediately prior to the
Change in Control;

SECTION SEVEN

NON-TRANSFERABILITY

This is a personal agreement. No Employee’s rights,
benefits or interests hereunder may be subject to sale, anticipation,
alienation, assignment, encumbrance, charge, pledge, hypothecation, transfer,
or set-off in respect of any claim, debt or obligation or to execution, attachment,
levy or similar process, or assignment by operation of law. Any attempt,
voluntary or involuntary, to effect any such action shall be null and void and
of no effect.

SECTION EIGHT

CHOICE OF LAW

It is the intention of the parties hereto that the
Agreement and the performance hereunder and all suits and special proceedings
hereunder be construed in accordance with and under and pursuant to the laws of
the State of Washington, and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with, or by reason
of the Agreement, the laws of the State of Washington, shall be applicable and
shall govern to the exclusion of the law of any other forum, without regard to
the jurisdiction in which any action or special proceeding may be instituted.

SECTION NINE

BINDING EFFECT

The Agreement shall be binding upon and shall inure to
the benefit of the Corporation and to its successors or assigns and to Employee
and his personal representative, heirs, executors and administrators.

SECTION TEN

DEFINITION OF CAUSE

Cause to terminate the Employee’s employment shall
mean (a) the willful and continued failure by the Employee to substantially
perform his duties, after demand for substantial performance as delivered by
the Corporation that specifically identifies the manner in which the
Corporation believes the Employee has not substantially performed his duties,
or (b) the willful engaging by the Employee of misconduct which is materially
injurious to the Corporation,

 6
 

monetarily or otherwise, or (c) the willful violation
by the Employee of the provisions of the Employment Agreement.

Notwithstanding the foregoing, the Employee shall not
be deemed to have been terminated for cause unless there shall have been
delivered to the Employee a copy of a notice of termination from the
Corporation after reasonable written notice to the Employee and an opportunity
for the Employee, together with counsel for the Employee, to be heard before
the Board of Directors of the Corporation, accompanied by a resolution duly
adopted by the Directors of the Corporation then in office, who find that in
the good faith opinion of such directors, the Employee was guilty of conduct
set forth above and shall set forth in particular detail the facts and circumstances
claimed to provide a basis for termination of employment under the provisions
so indicated.

SECTION ELEVEN

CONFIDENTIALITY

Employee agrees that except as required for the
performance of his duties, obligations and responsibilities hereunder, he will
not at any time during the term of the Agreement or thereafter divulge to any
person, firm or corporation any Confidential Information received by him during
the course of his employment and all such Confidential Information shall be
kept confidential and deemed the property of the Corporation. For the purpose
of the provision, Confidential Information means information known to the
Employee as a consequence of his employment by the Corporation and not
generally known in the industry in which the Corporation is engaged or
otherwise available to third parties from sources unrelated to or controlled by
the Corporation.

IN WITNESS WHEREOF, the parties
have executed the Agreement at Spokane Valley, Washington effective on the day
and year first above written.

	
  

  	
  REVETT
  SILVER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ William
  Orchow

  	
   

  
	
   

  	
   

  	
  Chief
  Executive Officer

  

 

 7
 

 

	
  

  	
  EMPLOYEE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Doug Ward

  	
   

  
	
   

  	
  Name: Doug Ward

  	
   

  
	
   

  	
  Address: 8362
  Selkirk Ct

  	
   

  
	
   

  	
  City, State:
  Hayden, ID

  
	
   

  	
  Zip Code: 83835

  	
   

  
	
   

  	
  Telephone
  Number: (208) 762-7107

  
	
   

  	
  SS#: ###-##-####

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NAMED
  BENEFICIARY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Karen Ann
  Riedel-Ward

  	
   

  	
   

  	
   

  
	
  (Spouse)

  	
   

  	
   

  
					

 

 8Exhibit 4.1

 

 

 

 

COAST BANCORP,

as Issuer

 

 

INDENTURE

 

Dated as of September 20, 2007

 

 

WILMINGTON TRUST COMPANY,

as Trustee

 

 

FIXED/FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE
INTEREST

DEBENTURES

 

 

DUE 2037

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. DEBENTURES

  	
  8

  
	
   

  	
   

  
	
  Section 2.1.

  	
  Authentication and Dating

  	
  8

  
	
  Section 2.2.

  	
  Form of Trustee’s Certificate of Authentication

  	
  9

  
	
  Section 2.3.

  	
  Form and Denomination of Debentures

  	
  9

  
	
  Section 2.4.

  	
  Execution of Debentures

  	
  9

  
	
  Section 2.5.

  	
  Exchange and Registration of Transfer of Debentures

  	
  10

  
	
  Section 2.6.

  	
  Mutilated, Destroyed, Lost or Stolen Debentures

  	
  12

  
	
  Section 2.7.

  	
  Temporary Debentures

  	
  12

  
	
  Section 2.8.

  	
  Payment of Interest and Additional Interest

  	
  13

  
	
  Section 2.9.

  	
  Cancellation of Debentures Paid, etc

  	
  14

  
	
  Section 2.10.

  	
  Computation of Interest

  	
  14

  
	
  Section 2.11.

  	
  Extension of Interest Payment Period

  	
  15

  
	
  Section 2.12.

  	
  CUSIP Numbers

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. PARTICULAR COVENANTS OF THE
  COMPANY

  	
  17

  
	
   

  	
   

  
	
  Section 3.1.

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

  	
  17

  
	
  Section 3.2.

  	
  Offices for Notices and Payments, etc

  	
  17

  
	
  Section 3.3.

  	
  Appointments to Fill Vacancies in Trustee’s Office

  	
  18

  
	
  Section 3.4.

  	
  Provision as to Paying Agent

  	
  18

  
	
  Section 3.5.

  	
  Certificate to Trustee

  	
  19

  
	
  Section 3.6.

  	
  Additional Sums

  	
  19

  
	
  Section 3.7.

  	
  Compliance with Consolidation Provisions

  	
  19

  
	
  Section 3.8.

  	
  Limitation on Dividends

  	
  19

  
	
  Section 3.9.

  	
  Covenants as to the Trust

  	
  20

  
	
  Section 3.10.

  	
  Additional Junior Indebtedness

  	
  20

  
	
  Section 3.11.

  	
  Subsidiary; Insured Depository Institution

  	
  20

  
	
   

  	
   

  	
   

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

  	
  21

  
	
   

  	
   

  
	
  Section 4.1.

  	
  Securityholders’ Lists

  	
  21

  
	
  Section 4.2.

  	
  Preservation and Disclosure of Lists

  	
  21

  
	
  Section 4.3.

  	
  Reports by the Company

  	
  22

  
	
   

  	
   

  	
   

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

  	
  22

  
	
   

  	
   

  
	
  Section 5.1.

  	
  Events of Default

  	
  22

  
	
  Section 5.2.

  	
  Payment of Debentures on Default; Suit Therefor

  	
  24

  
	
  Section 5.3.

  	
  Application of Moneys Collected by Trustee

  	
  25

  
	
  Section 5.4.

  	
  Proceedings by Securityholders

  	
  26

  
	
  Section 5.5.

  	
  Proceedings by Trustee

  	
  26

  

 

i

 

	
  Section 5.6.

  	
  Remedies Cumulative and Continuing; Delay or Omission
  Not a Waiver

  	
  26

  
	
  Section 5.7.

  	
  Direction of Proceedings and Waiver of Defaults by
  Majority of Securityholders

  	
  26

  
	
  Section 5.8.

  	
  Notice of Defaults

  	
  27

  
	
  Section 5.9.

  	
  Undertaking to Pay Costs

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. CONCERNING THE TRUSTEE

  	
  28

  
	
   

  	
   

  
	
  Section 6.1.

  	
  Duties and Responsibilities of Trustee

  	
  28

  
	
  Section 6.2.

  	
  Reliance on Documents, Opinions, etc

  	
  29

  
	
  Section 6.3.

  	
  No Responsibility for Recitals, etc

  	
  29

  
	
  Section 6.4.

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

  	
  30

  
	
  Section 6.5.

  	
  Moneys to be Held in Trust

  	
  30

  
	
  Section 6.6.

  	
  Compensation and Expenses of Trustee

  	
  30

  
	
  Section 6.7.

  	
  Officers’ Certificate as Evidence

  	
  31

  
	
  Section 6.8.

  	
  Eligibility of Trustee

  	
  31

  
	
  Section 6.9.

  	
  Resignation or Removal of Trustee

  	
  31

  
	
  Section 6.10.

  	
  Acceptance by Successor Trustee

  	
  32

  
	
  Section 6.11.

  	
  Succession by Merger, etc

  	
  33

  
	
  Section 6.12.

  	
  Authenticating Agents

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. CONCERNING THE SECURITYHOLDERS

  	
  34

  
	
   

  	
   

  
	
  Section 7.1.

  	
  Action by Securityholders

  	
  34

  
	
  Section 7.2.

  	
  Proof of Execution by Securityholders

  	
  35

  
	
  Section 7.3.

  	
  Who Are Deemed Absolute Owners

  	
  35

  
	
  Section 7.4.

  	
  Debentures Owned by Company Deemed Not Outstanding

  	
  35

  
	
  Section 7.5.

  	
  Revocation of Consents; Future Holders Bound

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. SECURITYHOLDERS’ MEETINGS 

  	
  36

  
	
   

  	
   

  
	
  Section 8.1.

  	
  Purposes of Meetings

  	
  36

  
	
  Section 8.2.

  	
  Call of Meetings by Trustee

  	
  36

  
	
  Section 8.3.

  	
  Call of Meetings by Company or Securityholders

  	
  36

  
	
  Section 8.4.

  	
  Qualifications for Voting

  	
  36

  
	
  Section 8.5.

  	
  Regulations

  	
  36

  
	
  Section 8.6.

  	
  Voting

  	
  37

  
	
  Section 8.7.

  	
  Quorum; Actions

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. SUPPLEMENTAL INDENTURES

  	
  38

  
	
   

  	
   

  
	
  Section 9.1.

  	
  Supplemental Indentures without Consent of
  Securityholders

  	
  38

  
	
  Section 9.2.

  	
  Supplemental Indentures with Consent of
  Securityholders

  	
  39

  
	
  Section 9.3.

  	
  Effect of Supplemental Indentures

  	
  40

  
	
  Section 9.4.

  	
  Notation on Debentures

  	
  40

  
	
  Section 9.5.

  	
  Evidence of Compliance of Supplemental Indenture to
  be Furnished to Trustee

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. REDEMPTION OF SECURITIES

  	
  40

  
	
   

  	
   

  
	
  Section 10.1.

  	
  Optional Redemption

  	
  40

  
	
  Section 10.2.

  	
  Special Event Redemption

  	
  41

  
	
  Section 10.3.

  	
  Notice of Redemption; Selection of Debentures

  	
  41

  

 

ii

 

	
  Section 10.4.

  	
  Payment of Debentures Called for Redemption

  	
  42

  
	
   

  	
   

  	
   

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

  	
  42

  
	
   

  	
   

  
	
  Section 11.1.

  	
  Company May Consolidate, etc., on Certain Terms

  	
  42

  
	
  Section 11.2.

  	
  Successor Entity to be Substituted

  	
  42

  
	
  Section 11.3.

  	
  Opinion of Counsel to be Given to Trustee

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII. SATISFACTION AND DISCHARGE OF
  INDENTURE

  	
  43

  
	
   

  	
   

  
	
  Section 12.1.

  	
  Discharge of Indenture

  	
  43

  
	
  Section 12.2.

  	
  Deposited Moneys to be Held in Trust by Trustee

  	
  44

  
	
  Section 12.3.

  	
  Paying Agent to Repay Moneys Held

  	
  44

  
	
  Section 12.4.

  	
  Return of Unclaimed Moneys

  	
  44

  
	
   

  	
   

  	
   

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

  	
  44

  
	
   

  	
   

  
	
  Section 13.1.

  	
  Indenture and Debentures Solely Corporate
  Obligations

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV. MISCELLANEOUS PROVISIONS

  	
  44

  
	
   

  	
   

  
	
  Section 14.1.

  	
  Successors

  	
  44

  
	
  Section 14.2.

  	
  Official Acts by Successor Entity

  	
  44

  
	
  Section 14.3.

  	
  Surrender of Company Powers

  	
  44

  
	
  Section 14.4.

  	
  Addresses for Notices, etc

  	
  45

  
	
  Section 14.5.

  	
  Governing Law

  	
  45

  
	
  Section 14.6.

  	
  Evidence of Compliance with Conditions Precedent

  	
  45

  
	
  Section 14.7.

  	
  Table of Contents, Headings, etc

  	
  45

  
	
  Section 14.8.

  	
  Execution in Counterparts

  	
  45

  
	
  Section 14.9.

  	
  Separability

  	
  45

  
	
  Section 14.10.

  	
  Assignment

  	
  46

  
	
  Section 14.11.

  	
  Acknowledgment of Rights

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV. SUBORDINATION OF DEBENTURES

  	
  46

  
	
   

  	
   

  
	
  Section 15.1.

  	
  Agreement to Subordinate

  	
  46

  
	
  Section 15.2.

  	
  Default on Senior Indebtedness

  	
  46

  
	
  Section 15.3.

  	
  Liquidation, Dissolution, Bankruptcy

  	
  47

  
	
  Section 15.4.

  	
  Subrogation

  	
  48

  
	
  Section 15.5.

  	
  Trustee to Effectuate Subordination

  	
  48

  
	
  Section 15.6.

  	
  Notice by the Company

  	
  49

  
	
  Section 15.7.

  	
  Rights of the Trustee; Holders of Senior
  Indebtedness

  	
  49

  
	
  Section 15.8.

  	
  Subordination May Not Be Impaired

  	
  50

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Fixed/Floating Rate Junior Subordinated
  Deferrable Interest Debenture

  	
   

  
	
  Exhibit B

  	
  Form of Certificate to Trustee

  	
   

  
	
  Exhibit C

  	
  Form of Quarterly Report

  	
   

  
				

 

iii

 

THIS INDENTURE, dated as of September 20, 2007, between Coast
Bancorp, a California corporation (the “Company”), and Wilmington Trust
Company, a Delaware banking corporation, as debenture trustee (the “Trustee”).

 

WITNESSETH:

 

WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its Fixed/Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2037 (the “Debentures”) under this
Indenture to provide, among other things, for the execution and authentication,
delivery and administration thereof, and the Company has duly authorized the
execution of this Indenture; and

 

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

 

NOW, THEREFORE, This Indenture Witnesseth:

 

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

 

ARTICLE I.

DEFINITIONS

 

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

 

“Acceleration Event of Default” means an Event of Default under Section 5.1(a),
(d), (e) or (f), whatever the reason for such Acceleration Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.

 

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

 

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

 

1

 

subsidiaries, or any other class of security or
interest which the Federal Reserve now or may hereafter accord Tier 1
capital treatment (including the Debentures) in excess of the amount which may
qualify for treatment as Tier 1 capital under applicable capital adequacy
guidelines.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

successive Interest Payment Date, the period beginning
on (and including) the preceding Interest Payment Date and ending on (but
excluding) such current Interest Payment Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Interest Payment Date” means March 15, June 15, September 15
and December 15 of each year during the term of this Indenture, or if such
day is not a Business Day, then the next succeeding Business Day (it being
understood that interest accrues for any such non-Business Day, beginning on or
after December 15, 2012), commencing in December 2007.

 

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

 

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

 

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

 

“Maturity Date” means December 15, 2037.

 

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

 

“Opinion of Counsel” means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or may be other
counsel reasonably satisfactory to the Trustee.

 

4

 

Each such opinion shall include the statements
provided for in Section 14.6 if and to the extent required by the
provisions of such Section.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Predecessor Security” of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for purposes of this definition,
any Debenture authenticated and delivered under Section 2.6 in lieu of a
lost, destroyed or stolen Debenture shall be deemed to evidence the same debt
as the lost, destroyed or stolen Debenture.

 

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

 

“Principal Office of the Trustee,” or other similar term, means
the office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered, which at the time of the execution
of this Indenture shall be Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-1600, Attention: Corporate Trust Administration.

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

“Reuters Page LIBOR01” has the meaning set forth in Section 2.10.

 

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

 

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

 

“Senior Indebtedness” means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of
the Company for all borrowed and purchased money and (B) indebtedness
evidenced by securities, debentures, notes, bonds or other similar instruments
issued by the Company; (ii) all capital lease obligations of the Company; (iii) all
obligations of the Company issued or assumed as the deferred purchase price of
property, all conditional sale obligations of the Company and all obligations
of the Company under any title retention agreement; (iv) all obligations
of the Company for the reimbursement of any letter of credit, any banker’s
acceptance, any security purchase facility, any repurchase agreement or similar
arrangement, any interest rate swap, any other hedging arrangement, any
obligation under options or any similar credit or other transaction; (v) all
obligations of the Company associated with derivative products such as interest
and foreign exchange rate contracts, commodity contracts, and similar
arrangements; (vi) all obligations of the type referred to in
clauses (i) through (v) above of other Persons for the payment
of which the Company is responsible or liable as obligor, guarantor or
otherwise including, without limitation, similar obligations arising from
off-balance sheet guarantees and direct credit substitutes; and (vii) all
obligations of the type referred to in clauses (i) through (vi) above
of other Persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), whether incurred on
or prior to the date of this Indenture or thereafter incurred. Notwithstanding
the foregoing, “Senior Indebtedness” shall not include (1) any Additional
Junior Indebtedness, (2) Debentures issued pursuant to this Indenture and
guarantees in respect of such Debentures, (3) trade accounts payable of
the Company arising in the ordinary course of business (such trade accounts
payable being pari passu in right of payment to
the Debentures), or (4) obligations with respect to which (a) in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are pari passu,
junior or otherwise not superior in right of payment to the Debentures and (b) the
Company, prior to the issuance thereof, has notified (and, if then required
under the applicable guidelines of the regulating entity, has received approval
from) the Federal Reserve (if the Company is a bank holding company) or the OTS
(if the Company is a savings and loan holding company). Senior Indebtedness
shall continue to be Senior

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

“Trust” shall mean Coast Bancorp Statutory Trust II, a
Delaware statutory trust, or any other similar trust created for the purpose of
issuing Capital Securities in connection with the issuance of Debentures under
this Indenture, of which the Company is the sponsor.

 

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

 

“Trustee” means Wilmington Trust Company, and, subject to the
provisions of Article VI hereof, shall also include its successors and
assigns as Trustee hereunder.

 

ARTICLE II.

DEBENTURES

 

Section 2.1.                                Authentication
and Dating.  Upon the execution
and delivery of this Indenture, or from time to time thereafter, Debentures in
an aggregate principal amount not in excess of $7,217,000.00 may be executed
and delivered by the Company to the Trustee for authentication, and the
Trustee, upon receipt of a written authentication order from the Company, shall
thereupon authenticate and make available for delivery said Debentures to or
upon the written order of the Company, signed by its Chairman of the Board of
Directors, Chief Executive Officer, Vice Chairman, the President, one of its
Managing Directors or one of its Vice Presidents without any further action by
the Company hereunder. Notwithstanding anything to the contrary contained
herein, the Trustee shall be fully protected in relying upon the aforementioned
authentication order and written order in authenticating and delivering said
Debentures. In authenticating such Debentures, and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall
be fully protected in relying upon:

 

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

 

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

 

(1)                                   that
such Debentures, when authenticated and delivered by the Trustee and issued by
the Company in each case in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, subject to or limited by applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, moratorium and other
statutory or

 

8

 

decisional laws relating to or affecting creditors’ rights or the
reorganization of financial institutions (including, without limitation,
preference and fraudulent conveyance or transfer laws), heretofore or hereafter
enacted or in effect, affecting the rights of creditors generally; and

 

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

 

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

 

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

 

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

 

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

 

	
  WILMINGTON TRUST COMPANY, as Trustee

  
	
   

  
	
  By

  	
   

  	
   

  
	
  Authorized Signer

  

 

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

 

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

 

In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee or

 

9

 

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

 

Every Debenture shall be dated the date of its authentication.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

Every substituted Debenture issued pursuant to the provisions of this Section 2.6
by virtue of the fact that any such Debenture is destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Debenture shall be found at any time, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debentures duly issued hereunder. All
Debentures shall be held and owned upon the express condition that, to the
extent permitted by applicable law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.

 

Section 2.7.                                Temporary
Debentures.  Pending the
preparation of definitive Debentures, the Company may execute and the Trustee
shall authenticate and make available for delivery temporary Debentures that
are typed, printed or lithographed. Temporary Debentures shall be issuable in
any authorized denomination, and substantially in the form of the definitive
Debentures in lieu of which they are issued but with such omissions, insertions
and variations as may be appropriate for temporary Debentures, all as may be
determined by the Company. Every such temporary Debenture shall be executed by
the Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the definitive
Debentures. Without unreasonable delay the Company will execute and deliver to
the Trustee or the Authenticating Agent

 

12

 

definitive Debentures and thereupon any or all temporary Debentures may
be surrendered in exchange therefor, at the principal corporate trust office of
the Trustee or at any office or agency maintained by the Company for such
purpose as provided in Section 3.2, and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery in exchange for such
temporary Debentures a like aggregate principal amount of such definitive
Debentures. Such exchange shall be made by the Company at its own expense and
without any charge therefor except that in case of any such exchange involving
a registration of transfer the Company may require payment of a sum sufficient
to cover any tax, fee or other governmental charge that may be imposed in
relation thereto. Until so exchanged, the temporary Debentures shall in all
respects be entitled to the same benefits under this Indenture as definitive
Debentures authenticated and delivered hereunder.

 

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

 

Each Debenture shall bear interest for the period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Interest Payment Date in December 2012 at a rate per annum of 6.388%, and
shall bear interest for each successive Distribution Period beginning on or
after the Interest Payment Date in December 2012 at a rate per annum equal
to the 3-Month LIBOR, determined as described in Section 2.10, plus 1.50%
(the “Coupon Rate”), applied to the principal amount thereof, until the
principal thereof becomes due and payable, and on any overdue principal and to
the extent that payment of such interest is enforceable under applicable law
(without duplication) on any overdue installment of interest (including
Additional Interest) at the Interest Rate in effect for each applicable period
compounded quarterly. Interest shall be payable (subject to any relevant
Extension Period) quarterly in arrears on each Interest Payment Date with the
first installment of interest to be paid on the Interest Payment Date in December 2007.

 

Any interest on any Debenture, including Additional Interest, that is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called “Defaulted Interest”) shall forthwith cease
to be payable to the registered holder on the relevant regular record date by
virtue of having been such holder; and such Defaulted Interest shall be paid by
the Company to the Persons in whose names such Debentures (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Company shall notify the Trustee in writing at least
25 days prior to the date of the proposed payment of the amount of Defaulted
Interest proposed to be paid on each such Debenture and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall not be more than 15 nor less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at its address as it appears in
the Debenture Register, not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the special
record date therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in

 

13

 

whose names such Debentures (or their respective
Predecessor Securities) are registered on such special record date and shall be
no longer payable.

 

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

 

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

 

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

 

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

 

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

 

Section 2.10.                         Computation
of Interest.  The amount of
interest payable (i) for any Distribution Period commencing on or after
the date of original issuance but before the Interest Payment Date in December 2012
will be computed on the basis of a 360-day year of twelve 30-day months, and (ii) for
the Distribution Period commencing on the Interest Payment Date in December 2012
and each succeeding Distribution Period will be calculated by applying the
Interest Rate to the principal amount outstanding at the commencement of the
Distribution Period 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 Debentures will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being
rounded to 9.87655% (or .0987655), and all dollar amounts used in or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward)).

 

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

 

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

 

14

 

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

 

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

 

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

 

If the rate for U.S. dollar deposits having a three-month maturity that
initially appears on Reuters Page LIBOR01 as of 11:00 a.m. (London
time) on the related Determination Date is superseded on the Reuters Page LIBOR01
by a corrected rate by 12:00 noon (London time) on such Determination
Date, then the corrected rate as so substituted on the applicable page will
be the applicable 3-Month LIBOR for such Determination Date.

 

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

 

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

 

(d)                                 The
Trustee shall notify the Company, the Institutional Trustee and any securities
exchange or interdealer quotation system on which the Capital Securities are
listed, of the Coupon Rate and the Determination Date for each Distribution
Period, in each case as soon as practicable after the determination thereof but
in no event later than the thirtieth (30th) day of the relevant Distribution
Period. Failure to notify the Company, the Institutional Trustee or any
securities exchange or interdealer quotation system, or any defect in said
notice, shall not affect the obligation of the Company to make payment on the
Debentures at the applicable Coupon Rate. Any error in the calculation of the
Coupon Rate by the Trustee may be corrected at any time by notice delivered as
above provided. Upon the request of a holder of a Debenture, the Trustee shall
provide the Coupon Rate then in effect and, if determined, the Coupon Rate for
the next Distribution Period.

 

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

 

Section 2.11.                         Extension
of Interest Payment Period.  So
long as no Acceleration Event of Default has occurred and is continuing, the
Company shall have the right, from time to time, and without

 

15

 

causing an Event of Default, to defer payments of interest on the Debentures
by extending the interest payment period on the Debentures at any time and from
time to time during the term of the Debentures, for up to 20 consecutive
quarterly periods (each such extended interest payment period, an “Extension
Period”), during which Extension Period no interest (including Additional
Interest) shall be due and payable (except any Additional Sums that may be due
and payable). No Extension Period may end on a date other than an Interest
Payment Date. During an Extension Period, interest will continue to accrue on
the Debentures, and interest on such accrued interest will accrue at an annual
rate equal to the Interest Rate in effect for such Extension Period, compounded
quarterly from the date such interest would have been payable were it not for
the Extension Period, to the extent permitted by law (such interest referred to
herein as “Additional Interest”). At the end of any such Extension
Period the Company shall pay all interest then accrued and unpaid on the
Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date; provided  further,
however, that during any such Extension Period, the Company shall not
and shall not permit any Affiliate to (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s or such Affiliate’s capital stock (other
than payments of dividends or distributions to the Company or payments of dividends
from direct or indirect subsidiaries of the Company to their parent
corporations, which also shall be direct or indirect subsidiaries of the
Company) or make any guarantee payments with respect to the foregoing or (ii) make
any payment of principal of or interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company or any Affiliate that
rank pari passu in all respects with or
junior in interest to the Debentures (other than, with respect to clauses (i) or
(ii) above, (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
one or more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as
a result of any exchange or conversion of any class or series of the Company’s
capital stock (or any capital stock of a subsidiary of the Company) for any
class or series of the Company’s capital stock or of any class or series of the
Company’s indebtedness for any class or series of the Company’s capital stock, (c) the
purchase of fractional interests in shares of the Company’s capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend
in connection with any stockholders’ rights plan, or the issuance of rights,
stock or other property under any stockholders’ rights plan, or the redemption
or repurchase of rights pursuant thereto, (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu
with or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, (f) payments of principal or interest on
debt securities or payments of cash dividends or distributions on any capital
stock issued by an Affiliate that is not, in whole or in part, a subsidiary of
the Company (or any redemptions, repurchases or liquidation payments on such
stock or securities), or (g) payments under the Capital Securities
Guarantee). Prior to the termination of any Extension Period, the Company may
further extend such period, provided that such period together with all such
previous and further consecutive extensions thereof shall not exceed
20 consecutive quarterly periods, or extend beyond the Maturity Date. Upon
the termination of any Extension Period and upon the payment of all accrued and
unpaid interest and Additional Interest, the Company may commence a new
Extension Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional
Interest to the extent permitted by applicable law. The Company must give the
Trustee notice of its election to begin or extend an Extension Period by the
close of business at least 15 Business Days prior to the Interest Payment Date
with respect to which interest on the Debentures would

 

16

 

have been payable except for the election to begin or extend such
Extension Period. The Trustee shall give notice of the Company’s election to
begin a new Extension Period to the Securityholders.

 

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

 

ARTICLE III.

PARTICULAR COVENANTS OF THE COMPANY

 

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

 

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

 

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

 

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

 

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

 

Section 3.2.                                Offices
for Notices and Payments, etc.  So
long as any of the Debentures remain outstanding, the Company will maintain in
Wilmington, Delaware, an office or agency where the Debentures may be presented
for payment, an office or agency where the Debentures may be presented

 

17

 

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

 

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

 

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

 

Section 3.4.                                Provision
as to Paying Agent.

 

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

 

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

 

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

 

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

 

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

 

Whenever the Company shall have one or more paying agents for the
Debentures, it will, on or prior to each due date of the principal of and
premium, if any, or interest, if any, on the Debentures,

 

18

 

deposit with a paying agent a sum sufficient to pay
the principal, premium, interest or other payments so becoming due, such sum to
be held in trust for the benefit of the Persons entitled thereto and (unless
such paying agent is the Trustee) the Company shall promptly notify the Trustee
in writing of its action or failure to act.

 

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

 

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

 

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

 

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

 

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

 

Section 3.8.                                Limitation
on Dividends.  If Debentures are
initially issued to the Trust or a trustee of such Trust in connection with the
issuance of Trust Securities by the Trust (regardless of whether Debentures
continue to be held by such Trust) and (i) there shall have occurred and
be continuing an Event of Default, (ii) the Company shall be in default
with respect to its payment of any obligations under the Capital Securities
Guarantee, or (iii) the Company shall have given notice of its election to
defer payments of interest on the Debentures by extending the interest payment
period as provided herein and such period, or any extension thereof, shall be
continuing, then the Company shall not, and shall not allow any Affiliate of
the Company to, (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Company’s capital stock or its Affiliates’ capital stock (other than
payments of dividends or distributions to the Company or

 

19

 

payments of dividends from direct or indirect subsidiaries of the
Company to their parent corporations, which also shall be direct or indirect
subsidiaries of the Company) or make any guarantee payments with respect to the
foregoing or (y) make any payment of principal of or interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Company or
any Affiliate that rank pari passu in
all respects with or junior in interest to the Debentures (other than, with
respect to clauses (x) and (y) above, (1) repurchases, redemptions or
other acquisitions of shares of capital stock of the Company in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or
in connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
if any, (2) as a result of any exchange or conversion of any class or
series of the Company’s capital stock (or any capital stock of a subsidiary of
the Company) for any class or series of the Company’s capital stock or of any
class or series of the Company’s indebtedness for any class or series of the
Company’s capital stock, (3) the purchase of fractional interests in
shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged, (4) any
declaration of a dividend in connection with any stockholders’ rights plan, or
the issuance of rights, stock or other property under any stockholders’ rights
plan, or the redemption or repurchase of rights pursuant thereto, (5) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock and any cash payments in lieu of
fractional shares issued in connection therewith, (6) payments of
principal or interest on debt securities or payments of cash dividends or
distributions on any capital stock issued by an Affiliate that is not, in whole
or in part, a subsidiary of the Company (or any redemptions, repurchases or
liquidation payments on such stock or securities), or (7) payments under
the Capital Securities Guarantee).

 

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

 

Section 3.10.                         Additional
Junior Indebtedness.  The Company
shall not, and it shall not cause or permit any Subsidiary of the Company to,
incur, issue or be obligated on any Additional Junior Indebtedness, either
directly or indirectly, by way of guarantee, suretyship or otherwise, other
than Additional Junior Indebtedness (i) that, by its terms, is expressly
stated to be either junior and subordinate or pari passu
in all respects to the Debentures, and (ii) of which the Company has
notified (and, if then required under the applicable guidelines of the
regulating entity, has received approval from) the Federal Reserve, if the
Company is a bank holding company, or the OTS, if the Company is a savings and
loan holding company.

 

Section 3.11.                         Subsidiary;
Insured Depository Institution.  So long as any of the Debentures remain outstanding, at
least one operating Subsidiary of the Company shall be an insured depository
institution, as such term is defined in Section 3(c)(2) of the
Federal Deposit Insurance Act, as amended.

 

20

 

ARTICLE IV.

SECURITYHOLDERS’ LISTS AND REPORTS

BY THE COMPANY AND THE TRUSTEE

 

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

 

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

 

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

 

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

 

Section 4.2.                                Preservation
and Disclosure of Lists.

 

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

 

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

 

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

 

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

 

If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder whose name and address appear in the information
preserved at the time by the Trustee in accordance with the provisions of subsection (a) of
this Section 4.2 a copy of the form of proxy or other communication which
is specified in such request with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission, if permitted or required by applicable law,
together with a copy of the material to be mailed, a written statement to the
effect that, in the opinion of the Trustee, such mailing would be contrary to
the

 

21

 

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

 

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

 

Section 4.3.                                Reports
by the Company.  The Company
shall furnish to the holders of the Capital Securities and to prospective
purchasers of the Capital Securities, upon their request, the information
required to be furnished pursuant to Rule 144A(d)(4) under the
Securities Act.

 

(b)                                 The
Company shall furnish to (i) Wilmington Trust Company, with a copy to FTN
Financial Capital Markets and Keefe, Bruyette & Woods, Inc., and (ii) any
beneficial owner of the Capital Securities reasonably identified to the
Company, a completed quarterly report in the form attached hereto as Exhibit C,
which report shall be so furnished by the Company not later than 50 days after
the end of each of the first three fiscal quarters of each fiscal year of the
Company and not later than 100 days after the end of each fiscal year of the
Company along with a copy of the Company’s most recently filed (1) FR Y-9C
filed with the Federal Reserve if the Company is a bank holding company, (2) FR
Y-9SP filed with the Federal Reserve if the Company is a small bank holding
company or (3) H-(b)11 filed with the OTS if the Company is a savings and
loan holding company.

 

ARTICLE V.

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

UPON AN EVENT OF DEFAULT

 

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

 

(a)                                  the
Company defaults in the payment of any interest upon any Debenture, including
any Additional Interest in respect thereof, following the nonpayment of any
such interest for twenty or more consecutive Distribution Periods; or

 

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

 

(c)                                  the
Company defaults in the performance of, or breaches, any of its covenants or
agreements in this Indenture or in the terms of the Debentures established as
contemplated in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period

 

22

 

of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the holders of at least 25% in aggregate principal amount of
the outstanding Debentures, a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder; or

 

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

 

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

 

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

 

If an Acceleration Event of Default occurs and is continuing with
respect to the Debentures, then, and in each and every such case, unless the
principal of the Debentures shall have already become due and payable, either
the Trustee or the holders of not less than 25% in aggregate principal amount
of the Debentures then outstanding hereunder, by notice in writing to the Company
(and to the Trustee if given by Securityholders), may declare the entire
principal of the Debentures and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default under Section 5.1(b) or
(c) occurs and is continuing with respect to the Debentures, then, and in
each and every such case, unless the principal of the Debentures shall have
already become due and payable, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the Debentures then outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
Securityholders), may proceed to remedy the default or breach thereunder by
such appropriate judicial proceedings as the Trustee or such holders shall deem
most effectual to remedy the defaulted covenant or enforce the provisions of
this Indenture so breached, either by suit in equity or by action at law, for
damages or otherwise.

 

The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Debentures shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided, (i) the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Debentures and the principal of
and premium, if any, on the Debentures which shall have become due otherwise
than by acceleration (with interest upon such principal and premium, if any,
and Additional Interest) and such amount as shall be sufficient to cover
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other amounts due to the
Trustee pursuant to Section 6.6, if any, and (ii) all Events of
Default under this Indenture, other than the non-payment of the principal of or
premium, if any, on Debentures which shall have become due by acceleration,
shall have been cured, waived or otherwise

 

23

 

remedied as provided herein — then and in every such
case the holders of a majority in aggregate principal amount of the Debentures
then outstanding, by written notice to the Company and to the Trustee, may
waive all defaults and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or shall impair any right consequent thereon.

 

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

 

Section 5.2.                                Payment
of Debentures on Default; Suit Therefor. 
The Company covenants that upon the occurrence of an Event of
Default pursuant to Section 5.1(a) or (b) then, upon demand of
the Trustee, the Company will pay to the Trustee, for the benefit of the
holders of the Debentures the whole amount that then shall have become due and
payable on all Debentures for principal and premium, if any, or interest, or
both, as the case may be, with Additional Interest accrued on the Debentures
(to the extent that payment of such interest is enforceable under applicable
law and, if the Debentures are held by the Trust or a trustee of such Trust,
without duplication of any other amounts paid by the Trust or a trustee in
respect thereof); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any other amounts due to the Trustee under Section 6.6. In case the
Company shall fail forthwith to pay such amounts upon such demand, the Trustee,
in its own name and as trustee of an express trust, shall be entitled and
empowered to institute any actions or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such judgment or
final decree against the Company or any other obligor on such Debentures and
collect in the manner provided by law out of the property of the Company or any
other obligor on such Debentures wherever situated the moneys adjudged or
decreed to be payable.

 

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

 

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

 

(ii)                                  in
case of any judicial proceedings, to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all other amounts due to the Trustee under Section 6.6),
and of the Securityholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Debentures, or to the creditors or property
of the Company or such other obligor, unless

 

24

 

prohibited by applicable
law and regulations, to vote on behalf of the holders of the Debentures in any
election of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person performing
similar functions in comparable proceedings,

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of,
premium, if any, and interest, on such Debenture when due, or to institute suit
for the enforcement of any such payment, shall not be impaired or affected
without the consent of such holder and by accepting a Debenture hereunder it is
expressly understood, intended and covenanted by the taker and holder of every
Debenture with every other such taker and holder and the Trustee, that no one
or more holders of Debentures shall have any right in any manner whatsoever by
virtue or by availing itself of any provision of this Indenture to affect,
disturb or prejudice the rights of the holders of any other Debentures, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of
Debentures. For the protection and enforcement of the provisions of this
Section, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

 

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

 

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

 

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

 

26

 

part in such direction or if the Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be taken
or if a Responsible Officer of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability.

 

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

 

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

 

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

 

27

 

ARTICLE VI.

CONCERNING THE TRUSTEE

 

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

 

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

 

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

 

(1)                                  the
duties and obligations of the Trustee with respect to Debentures shall be
determined solely by the express provisions of this Indenture, and the Trustee
shall not be liable except for the performance of such duties and obligations
with respect to the Debentures as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this Indenture
against the Trustee, and

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

(e)                                  the
Trustee shall not be liable for any action taken or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to the Debentures (that has not been cured or waived)
to exercise with respect to Debentures such of the rights and powers vested in
it by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;

 

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

 

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

 

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

 

Section 6.3.                                No
Responsibility for Recitals, etc.  The
recitals contained herein and in the Debentures (except in the certificate of
authentication of the Trustee or the Authenticating Agent) shall be taken as
the statements of the Company, and the Trustee and the Authenticating Agent
assume no responsibility for the correctness of the same. The Trustee and the
Authenticating Agent make no representations as to the validity or sufficiency
of this Indenture or of the Debentures. The Trustee and

 

29

 

the Authenticating Agent shall not be accountable for the use or
application by the Company of any Debentures or the proceeds of any Debentures
authenticated and delivered by the Trustee or the Authenticating Agent in
conformity with the provisions of this Indenture.

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

Section 6.9.                                Resignation
or Removal of Trustee

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

(c)                                  Upon
prior written notice to the Company and the Trustee, the holders of a majority
in aggregate principal amount of the Debentures at the time outstanding may at
any time remove the Trustee and nominate a successor Trustee, which shall be
deemed appointed as successor Trustee unless within 10 Business Days after such
nomination the Company objects thereto, in which case, or in the case of a
failure by such holders to nominate a successor Trustee, the Trustee so removed
or any Securityholder, upon the terms and conditions and otherwise as in subsection (a) of
this Section 6.9 provided, may petition any court of competent
jurisdiction for an appointment of a successor.

 

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

 

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

 

If a successor Trustee is appointed, the Company, the retiring Trustee
and the successor Trustee shall execute and deliver an indenture supplemental
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debentures as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee,
and shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the Trust
hereunder by more than one

 

32

 

Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.

 

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

 

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

 

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

 

Section 6.11.                         Succession
by Merger, etc.  Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation succeeding
to all or substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder without the execution or filing
of any paper or any further act on the part of any of the parties hereto; provided
such corporation shall be otherwise eligible and qualified under this Article.

 

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

 

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

 

33

 

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

 

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

 

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

 

ARTICLE VII.

CONCERNING THE SECURITYHOLDERS

 

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

 

If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action or
revocation of the same, the Company may, at its option, as evidenced by an
Officers’ Certificate, fix in advance a record date for such Debentures for the
determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other action or revocation of the same may be given before
or after the record date, but only the Securityholders of record at the close
of business on the record date shall be deemed to be Securityholders for the
purposes of determining whether Securityholders of the requisite proportion of
outstanding Debentures have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other action or
revocation of the same, and for that purpose the outstanding Debentures shall
be computed as of the record date; provided, however, that no
such authorization,

 

34

 

agreement or consent by such Securityholders on the
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than 6 months after the record
date.

 

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

 

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

 

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

 

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

 

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

 

35

 

any exchanged or substituted Debenture). Except as aforesaid any such
action taken by the holder of any Debenture shall be conclusive and binding
upon such holder and upon all future holders and owners of such Debenture, and
of any Debenture issued in exchange or substitution therefor or on registration
of transfer thereof, irrespective of whether or not any notation in regard
thereto is made upon such Debenture or any Debenture issued in exchange or
substitution therefor.

 

ARTICLE VIII.

SECURITYHOLDERS’ MEETINGS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 8.5.                                Regulations.  Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Securityholders, in

 

36

 

regard to proof of the holding of Debentures and of the appointment of
proxies, and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the meeting
as it shall think fit.

 

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

 

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

 

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

 

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

 

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

 

37

 

10 days as determined by the permanent chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening
of any adjourned meeting shall be given as provided in Section 8.2, except
that such notice need be given only once not less than 5 days prior to the date
on which the meeting is scheduled to be reconvened. Notice of the reconvening
of an adjourned meeting shall state expressly the percentage, as provided
above, of the principal amount of the Debentures then outstanding which shall
constitute a quorum.

 

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

 

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

 

ARTICLE IX.

SUPPLEMENTAL INDENTURES

 

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

 

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

 

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

 

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

 

38

 

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

 

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

 

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

 

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

 

The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise.

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE X.

REDEMPTION OF SECURITIES

 

Section 10.1.                         Optional
Redemption.  The Company shall
have the right (subject to the receipt by the Company of prior approval (i) if
the Company is a bank holding company, from the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal Reserve
or (ii) if the Company is a savings and loan holding company, from the
OTS, if then required under applicable capital guidelines or policies of the
OTS) to redeem the Debentures, in whole or in part, but in all cases in

 

40

 

a principal amount with integral multiples of $1,000.00, on any
Interest Payment Date on or after the Interest Payment Date in December 2012
(the “Redemption Date”), at the Redemption Price.

 

Section 10.2.                         Special
Event Redemption.  If a Special
Event shall occur and be continuing, the Company shall have the right (subject
to the receipt by the Company of prior approval (i) if the Company is a
bank holding company, from the Federal Reserve, if then required under
applicable capital guidelines or policies of the Federal Reserve or (ii) if
the Company is a savings and loan holding company, from the OTS, if then
required under applicable capital guidelines or policies of the OTS) to redeem
the Debentures in whole, but not in part, at any Interest Payment Date, within
120 days following the occurrence of such Special Event (the “Special
Redemption Date”) at the Special Redemption Price. If the Special Event
redemption occurs prior to the Interest Payment Date in December 2012, the
Company shall appoint a Quotation Agent, which shall be a designee of the
Institutional Trustee, for the purpose of performing the services contemplated
in, or by reference in, the definition of Special Redemption Price. Any error
in the calculation of the Special Redemption Price by the Quotation Agent or
the Trustee may be corrected at any time by notice delivered to the Company and
the holders of the Debentures. Subject to the corrective rights set forth
above, all certificates, communications, opinions, determinations, calculations,
quotations and decisions given, expressed, made or obtained for the purposes of
the provisions relating to the payment and calculation of the Special
Redemption Price on the Debentures by the Trustee or the Quotation Agent, as
the case may be, shall (in the absence of willful default, bad faith or
manifest error) be final, conclusive and binding on the holders of the
Debentures and the Company, and no liability shall attach (except as provided
above) to the Trustee or the Quotation Agent in connection with the exercise or
non-exercise by any of them of their respective powers, duties and discretion.

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

ARTICLE XI.

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

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

 

Section 11.2.                         Successor
Entity to be Substituted.  In
case of any such consolidation, merger, sale, conveyance, transfer or other
disposition and upon the assumption by the successor entity, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to
the Trustee, of the due and punctual payment of the principal of and premium,
if any, and interest on all of the Debentures and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed or observed by the Company, such successor entity
shall succeed to and be substituted for the Company, with the same effect as if
it had been named herein as the Company, and thereupon the predecessor entity shall
be relieved of any further liability or obligation hereunder or upon the
Debentures. Such successor entity thereupon may cause to be signed, and may
issue in its own name, any or all of the Debentures issuable hereunder which
theretofore shall not have been signed by the

 

42

 

Company and delivered to the Trustee or the Authenticating Agent; and,
upon the order of such successor entity instead of the Company and subject to
all the terms, conditions and limitations in this Indenture prescribed, the
Trustee or the Authenticating Agent shall authenticate and deliver any
Debentures which previously shall have been signed and delivered by the
officers of the Company, to the Trustee or the Authenticating Agent for
authentication, and any Debentures which such successor entity thereafter shall
cause to be signed and delivered to the Trustee or the Authenticating Agent for
that purpose. All the Debentures so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures had been issued at the date of the execution hereof.

 

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

 

ARTICLE XII.

SATISFACTION AND DISCHARGE OF INDENTURE

 

Section 12.1.                         Discharge
of Indenture.  When

 

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

 

(b)                                 all
the Debentures not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within 1 year or are to be called for redemption within 1 year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds,
which shall be immediately due and payable, sufficient to pay at maturity or
upon redemption all of the Debentures (other than any Debentures which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.6) not theretofore canceled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to such date of maturity or redemption date, as the case
may be, but excluding, however, the amount of any moneys for the payment of
principal of, and premium, if any, or interest on the Debentures (1) theretofore
repaid to the Company in accordance with the provisions of Section 12.4,
or (2) paid to any state or to the District of Columbia pursuant to its
unclaimed property or similar laws,

 

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

 

43

 

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

 

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

 

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

 

ARTICLE XIII.

IMMUNITY OF INCORPORATORS, STOCKHOLDERS,

OFFICERS AND DIRECTORS

 

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

 

ARTICLE XIV.

MISCELLANEOUS PROVISIONS

 

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

 

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

 

Section 14.3.                         Surrender
of Company Powers.  The Company
by instrument in writing executed by authority of at least 2/3 (two-thirds) of
its Board of Directors and delivered to the Trustee

 

44

 

may surrender any of the powers reserved to the Company and thereupon
such power so surrendered shall terminate both as to the Company, and as to any
permitted successor.

 

Section 14.4.                         Addresses
for Notices, etc.  Any notice,
consent, direction, request, authorization, waiver or demand which by any
provision of this Indenture is required or permitted to be given, made,
furnished or served by the Trustee or by the Securityholders on or to the
Company may be given or served in writing by being deposited postage prepaid by
registered or certified mail in a post office letter box addressed (until
another address is filed by the Company, with the Trustee for the purpose) to
the Company, 500 Marsh Street, San Louis Obispo, California  93401, Attention:  Karen Pohl. Any notice, consent, direction,
request, authorization, waiver or demand by any Securityholder or the Company
to or upon the Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or made in writing at the office of the Trustee,
addressed to the Trustee, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware  19890-1600,
Attention: Corporate Trust Administration. Any notice, consent, direction,
request, authorization, waiver or demand on or to any Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the address set forth in the Debenture Register.

 

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

 

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

 

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

 

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

 

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

 

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

 

45

 

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

 

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

 

ARTICLE XV.

SUBORDINATION OF DEBENTURES

 

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

 

The payment by the Company of the principal of, and premium, if any,
and interest on all Debentures shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred; provided,
however, that the Debentures shall rank pari
passu in all material respects with any current indebtedness,
liabilities or obligations of the Company, or any Subsidiary of the Company,
under debt securities (or guarantees in respect of debt securities) issued to
any trust, or a trustee of a trust, partnership or other entity affiliated with
the Company that is, directly or indirectly, a finance subsidiary (as such term
is defined in Rule 3a-5 under the Investment Company Act of 1940) or other
financing vehicle of the Company or any Subsidiary of the Company in connection
with the issuance by that entity of preferred securities or other securities
that are eligible to qualify for Tier 1 capital treatment (or its then
equivalent) for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Company.

 

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

 

Section 15.2.                         Default
on Senior Indebtedness.  In the
event and during the continuation of any default by the Company in the payment
of principal, premium, interest or any other payment due on any Senior Indebtedness
of the Company following any grace period, or in the event that the maturity of
any Senior Indebtedness of the Company has been accelerated because of a
default and such acceleration

 

46

 

has not been rescinded or canceled and such Senior Indebtedness has not
been paid in full, then, in either case, no payment shall be made by the
Company with respect to the principal (including redemption) of, or premium, if
any, or interest on the Debentures.

 

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

 

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

 

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

 

For purposes of this Article XV, the words “cash, property or
securities” shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article XV
with respect to the Debentures to the

 

47

 

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

 

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

 

Nothing contained in this Article XV or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company, other than the holders of Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article XV
of the holders of such Senior Indebtedness in respect of cash, property or
securities of the Company, received upon the exercise of any such remedy.

 

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

 

Section 15.5.                         Trustee
to Effectuate Subordination.  Each
Securityholder by such Securityholder’s acceptance thereof authorizes and
directs the Trustee on such Securityholder’s behalf to

 

48

 

take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XV and appoints the Trustee such
Securityholder’s attorney-in-fact for any and all such purposes.

 

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

 

The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder), to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
such Senior Indebtedness to participate in any payment or distribution pursuant
to this Article XV, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article XV, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.

 

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

 

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

 

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

 

49

 

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

 

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

 

Signatures appear on the following page

 

50

 

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

 

	
   

  	
  COAST BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  

 

51

 

EXHIBIT A

 

FORM OF FIXED/FLOATING RATE JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURE

 

[FORM OF FACE OF SECURITY]

 

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

 

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

 

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

 

A-1

 

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

 

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

 

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

 

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

 

Fixed/Floating Rate Junior Subordinated Deferrable
Interest Debenture

 

of

 

Coast Bancorp

 

September 20, 2007

 

Coast Bancorp, a California corporation (the “Company” which term
includes any successor Person under the Indenture hereinafter referred to), for
value received promises to pay to Wilmington Trust Company, not in its
individual capacity but solely as Institutional Trustee for Coast Bancorp
Statutory Trust II (the “Holder”) or registered assigns, the principal sum
of seven million two hundred seventeen thousand dollars ($7,217,000.00) on December 15,
2037, and to pay interest on said principal sum from September 20, 2007,
or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 15, June 15, September 15
and December 15 of each year or if such day is not a Business Day, then
the next succeeding Business Day (each such date, an “Interest Payment Date”)
(it being understood that interest accrues for any such non-Business Day during
the applicable Distribution Period, beginning on or after December 15,
2012), commencing on the Interest Payment Date in December 2007, at an
annual rate equal to 6.388% beginning on (and including) the date of original
issuance and ending on (but excluding) the Interest Payment Date in December 2012
and at an annual rate for each successive period beginning on (and including)
the Interest Payment Date in December 2012, and each succeeding Interest
Payment Date, and ending on (but excluding) the next succeeding Interest
Payment Date (each a “Distribution Period”), equal to 3-Month LIBOR, determined
as described below, plus 1.50% (the “Coupon Rate”), applied to the principal
amount hereof, until the principal hereof is paid or duly provided for or made
available for payment, and on any overdue principal and (without

 

A-2

 

duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest (including Additional Interest) at the Interest Rate in effect for
each applicable period, compounded quarterly, from the dates such amounts are
due until they are paid or made available for payment. The amount of interest
payable (i) for any Distribution Period commencing on or after the date of
original issuance but before the Interest Payment Date in December 2012
will be computed on the basis of a 360-day year of twelve 30-day months, and (ii) for
the Distribution Period commencing on the Interest Payment Date in December 2012
and each succeeding Distribution Period will be computed on the basis of the
actual number of days in the Distribution Period concerned divided by 360. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such
interest installment, which shall be fifteen Business Days prior to the day on
which the relevant Interest Payment Date occurs. Any such interest installment
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such regular record date and may be paid to the Person in
whose name this Debenture (or one or more Predecessor Securities) is registered
at the close of business on a special record date.

 

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

 

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

 

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

 

A-3

 

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

 

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

 

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

 

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

 

A-4

 

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

 

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

 

A-5

 

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

 

	
   

  	
  COAST BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  

 

 

CERTIFICATE OF AUTHENTICATION

 

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

 

	
   

  	
  WILMINGTON TRUST COMPANY, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Authorized
  Officer

  

 

A-6

 

[FORM OF REVERSE OF DEBENTURE]

 

This Debenture is one of the fixed/floating rate
junior subordinated deferrable interest debentures of the Company, all issued
or to be issued under and pursuant to the Indenture dated as of September 20,
2007 (the “Indenture”), duly executed and delivered between the Company and the
Trustee, to which Indenture reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Trustee, the Company and the holders of the Debentures. The Debentures are
limited in aggregate principal amount as specified in the Indenture.

 

Upon the occurrence and continuation of a Special
Event prior to the Interest Payment Date in December 2012, the Company
shall have the right to redeem the Debentures in whole, but not in part, at any
Interest Payment Date, within 120 days following the occurrence of such Special
Event, at the Special Redemption Price.

 

In addition, the Company shall have the right to
redeem the Debentures, in whole or in part, but in all cases in a principal
amount with integral multiples of $1,000.00, on any Interest Payment Date on or
after the Interest Payment Date in December 2012, at the Redemption Price.

 

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

 

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

 

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

 

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

 

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

 

A-7

 

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

 

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

 

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

 

A-8

 

property under any stockholders’ rights plan, or the redemption or
repurchase of rights pursuant thereto, (5) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu
with or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, (6) payments of principal or interest on
debt securities or payments of cash dividends or distributions on any capital
stock issued by an Affiliate that is not, in whole or in part, a subsidiary of
the Company (or any redemptions, repurchases or liquidation payments on such
stock or securities), or (7) payments under the Capital Securities
Guarantee).

 

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

 

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

 

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

 

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

 

A-9

 

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

 

A-10

 

EXHIBIT B

 

FORM OF CERTIFICATE TO TRUSTEE

 

Pursuant to Section 3.5 of the Indenture between
Coast Bancorp, as the Company (the “Company”), and Wilmington Trust Company, as
Trustee, dated as of September 20, 2007 (the “Indenture”), the undersigned
hereby certifies as follows:

 

1.                                       In
my capacity as an officer of the Company, I would normally have knowledge of
any default by the Company during the last fiscal year in the performance of
any covenants of the Company contained in the Indenture.

 

2.                                       [To
my knowledge, the Company is not in default in the performance of any covenants
contained in the Indenture.

 

or, alternatively:

 

I am aware of the default(s) in the performance of
covenants in the Indentures, as specified below.]

 

Capitalized terms used herein, and not otherwise
defined herein, have the respective meanings ascribed thereto in the Indenture.

 

IN WITNESS WHEREOF, the undersigned has executed this
Certificate.

 

 

	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

B-1

 

EXHIBIT C

 

FORM OF QUARTERLY REPORT

 

Wilmington Trust Company

1100 N. Market Street

Wilmington, Delaware  19890

Attention: Corporate Trust Administration - PreTSL

 

BANK HOLDING COMPANY

As of [March 31, June 30, September 30 or December 31],
20   

 

	
  Tier 1 to Risk Weighted
  Assets 

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Double
  Leverage 

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Non-Performing Assets
  to Loans and OREO

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Reserves to
  Non-Performing Loans

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Net
  Charge-Offs to Loans

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Return on Average Assets
  (annualized)**

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Net Interest Margin
  (annualized)**

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Efficiency Ratio

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Loans to
  Assets

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Loans to
  Deposits

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Year to Date Income

  	
   

  	
  $

  	
   

  

 

*A table describing the quarterly report calculation procedures is
provided on page C-2

 

** To annualize Return on Average Assets and Net Interest Margin do the
following:

1st Quarter-multiply income statement item by 4, then divide
by balance sheet item(s)

2nd Quarter-multiply income statement item by 2, then divide
by balance sheet item(s)

3rd Quarter-divide income statement item by 3, then multiply
by 4, then divide by balance sheet item(s)

4th Quarter-should already be an annual number

NO ADJUSTMENT SHOULD BE MADE TO BALANCE SHEET ITEMS

 

	
  cc:

  	
  FTN Financial Capital Markets

  	
  Keefe, Bruyette & Woods, Inc.

  
	
   

  	
  845 Crossover Lane, Suite 150

  	
  787 7th Avenue, 4th Floor

  
	
   

  	
  Memphis, Tennessee 38117

  	
  New York, New York 10019

  
	
   

  	
  Attention: Structured Finance Group

  	
  Attention: Mitchell Kleinman, General Counsel

  

 

C-1

 

Financial Definitions

 

 

	
  Report Item

  	
   

  	
  Description of Calculation

  
	
   

  	
   

  	
   

  
	
  “Tier 1 Capital” to Risk Weighted Assets

  	
   

  	
  Tier 1 Risk Ratio: Core Capital (Tier 1)/
  Risk-Adjusted Assets

  
	
  Ratio of Double Leverage

  	
   

  	
  Total equity investments in subsidiaries divided by
  the total equity capital. This field is calculated at the parent company
  level. “Subsidiaries” include bank, bank holding company, and nonbank
  subsidiaries.

  
	
  Non-Performing Assets to Loans and OREO

  	
   

  	
  Total Nonperforming Assets (NPLs+Foreclosed Real
  Estate+Other Nonaccrual & Repossessed Assets)/ Total Loans +
  Foreclosed Real Estate

  
	
  Ratio of Reserves to Non-Performing Loans

  	
   

  	
  Total Loan Loss and Allocated Transfer Risk
  Reserves/ Total Nonperforming Loans (Nonaccrual + Restructured)

  
	
  Ratio of Net Charge-Offs to Loans

  	
   

  	
  Net charge offs for the period as a percentage of
  average loans.

  
	
  Return on Assets

  	
   

  	
  Net Income as a percentage of Assets.

  
	
  Net Interest Margin

  	
   

  	
  (Net Interest Income Fully Taxable Equivalent, if
  available / Average Earning Assets)

  
	
  Efficiency Ratio

  	
   

  	
  (Noninterest Expense)/ (Net Interest Income Fully
  Taxable Equivalent, if available, plus Noninterest Income)

  
	
  Ratio of Loans to Assets

  	
   

  	
  Total Loans & Leases (Net of Unearned
  Income & Gross of Reserve)/ Total Assets

  
	
  Ratio of Loans to Deposits

  	
   

  	
  Total Loans & Leases (Net of Unearned
  Income & Gross of Reserve)/ Total Deposits (Includes Domestic and
  Foreign Deposits)

  
	
  Total Assets

  	
   

  	
  The sum of total assets. Includes cash and balances
  due from depository institutions; securities; federal funds sold and
  securities purchased under agreements to resell; loans and lease financing
  receivables; trading assets; premises and fixed assets; other real estate
  owned; investments in unconsolidated subsidiaries and associated companies;
  customer’s liability on acceptances outstanding; intangible assets; and other
  assets.

  
	
  Net Income

  	
   

  	
  The sum of income (loss) before extraordinary items
  and other adjustments and extraordinary items; and other adjustments, net of income
  taxes.

  

 

C-2

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