Document:

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                          JUNIOR SUBORDINATED INDENTURE

                                     between

                          TEMECULA VALLEY BANCORP INC.

                                       and

                            WILMINGTON TRUST COMPANY,
                                   as Trustee

                              ---------------------

                         Dated as of September 27, 2006

                              ---------------------

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<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I

             Definitions and Other Provisions of General Application

 SECTION 1.1.    Definitions...................................................1
 SECTION 1.2.    Compliance Certificate and Opinions..........................10
 SECTION 1.3.    Forms of Documents Delivered to Trustee......................11
 SECTION 1.4.    Acts of Holders..............................................12
 SECTION 1.5.    Notices, Etc.................................................13
 SECTION 1.6.    Notice to Holders; Waiver....................................14
 SECTION 1.7.    Effect of Headings and Table of Contents.....................14
 SECTION 1.8.    Successors and Assigns.......................................14
 SECTION 1.9.    Separability Clause..........................................15
 SECTION 1.10.   Benefits of Indenture........................................15
 SECTION 1.11.   Governing Law................................................15
 SECTION 1.12.   Submission to Jurisdiction...................................15
 SECTION 1.13.   Non-Business Days............................................15

                                   ARTICLE II

                                 Security Forms

 SECTION 2.1.    Form of Security.............................................16
 SECTION 2.2.    Restricted Legend............................................21
 SECTION 2.3.    Form of Trustee's Certificate of Authentication..............24
 SECTION 2.4.    Temporary Securities.........................................24
 SECTION 2.5.    Definitive Securities........................................24

                                   ARTICLE III

                                 The Securities

 SECTION 3.1.    Payment of Principal and Interest............................25
 SECTION 3.2.    Denominations................................................26
 SECTION 3.3.    Execution, Authentication, Delivery and Dating...............27
 SECTION 3.4.    Global Securities............................................27
 SECTION 3.5.    Registration, Transfer and Exchange Generally................29
 SECTION 3.6.    Mutilated, Destroyed, Lost and Stolen Securities..s.s..s.....30
 SECTION 3.7.    Persons Deemed Owners........................................31
 SECTION 3.8.    Cancellation.................................................31
 SECTION 3.9.    Deferrals of Interest Payment Dates..........................32
 SECTION 3.10.   Right of Set-Off.............................................33
 SECTION 3.11.   Agreed Tax Treatment.........................................33
 SECTION 3.12.   CUSIP Numbers................................................33

                                       -i-

<PAGE>

                                   ARTICLE IV

                           Satisfaction and Discharge
<TABLE>
<CAPTION>
<S>              <C>                                                                  <C>
 SECTION 4.1.    Satisfaction and Discharge of Indenture..............................33
 SECTION 4.2.    Application of Trust Money...........................................34

                                    ARTICLE V

                                    Remedies

 SECTION 5.1.    Events of Default....................................................35
 SECTION 5.2.    Acceleration of Maturity; Rescission and Annulment...................36
 SECTION 5.3.    Collection of Indebtedness and Suits for Enforcement by Trustee......37
 SECTION 5.4.    Trustee May File Proofs of Claim.....................................38
 SECTION 5.5.    Trustee May Enforce Claim Without Possession of Securities...........38
 SECTION 5.6.    Application of Money Collected.......................................38
 SECTION 5.7.    Limitation on Suits..................................................39
 SECTION 5.8.    Unconditional Right of Holders to Receive Principal, Premium and
                 Interest; Direct Action by Holders of Preferred Securities...........39
 SECTION 5.9.    Restoration of Rights and Remedies...................................40
 SECTION 5.10.   Rights and Remedies Cumulative.......................................40
 SECTION 5.11.   Delay or Omission Not Waiver.........................................40
 SECTION 5.12.   Control by Holders...................................................40
 SECTION 5.13.   Waiver of Past Defaults..............................................41
 SECTION 5.14.   Undertaking for Costs................................................41
 SECTION 5.15.   Waiver of Usury, Stay or Extension Laws..............................42

                                   ARTICLE VI

                                   The Trustee

 SECTION 6.1.    Corporate Trustee Required...........................................42
 SECTION 6.2.    Certain Duties and Responsibilities..................................42
 SECTION 6.3.    Notice of Defaults...................................................43
 SECTION 6.4.    Certain Rights of Trustee............................................44
 SECTION 6.5.    May Hold Securities..................................................46
 SECTION 6.6.    Compensation; Reimbursement; Indemnity...............................46
 SECTION 6.7.    Resignation and Removal; Appointment of Successor....................47
 SECTION 6.8.    Acceptance of Appointment by Successor...............................47
 SECTION 6.9.    Merger, Conversion, Consolidation or Succession to Business..........48
 SECTION 6.10.   Not Responsible for Recitals or Issuance of Securities...............48
 SECTION 6.11.   Appointment of Authenticating Agent..................................48
</TABLE>

                                      -ii-

<PAGE>

                                   ARTICLE VII

                Holders' Lists and Reports by Trustee and Company
<TABLE>
<CAPTION>
<S>              <C>                                                                  <C>
 SECTION 7.1.    Company to Furnish Trustee Names and Addresses of Holders............50
 SECTION 7.2.    Preservation of Information, Communications to Holders...............50
 SECTION 7.3.    Reports by Company and Trustee.......................................51

                                  ARTICLE VIII

              Consolidation, Merger, Conveyance, Transfer or Lease

 SECTION 8.1.    Company May Consolidate, Etc., Only on Certain Terms.................52
 SECTION 8.2.    Successor Company Substituted........................................53

                                   ARTICLE IX

                             Supplemental Indentures

 SECTION 9.1.    Supplemental Indentures without Consent of Holders...................53
 SECTION 9.2.    Supplemental Indentures with Consent of Holders......................54
 SECTION 9.3.    Execution of Supplemental Indentures.................................55
 SECTION 9.4.    Effect of Supplemental Indentures....................................55
 SECTION 9.5.    Reference in Securities to Supplemental Indentures...................55

                                    ARTICLE X

                                    Covenants

 SECTION 10.1.   Payment of Principal, Premium and Interest...........................55
 SECTION 10.2.   Money for Security Payments to be Held in Trust......................56
 SECTION 10.3.   Statement as to Compliance...........................................57
 SECTION 10.4.   Calculation Agent....................................................57
 SECTION 10.5.   Additional Tax Sums..................................................58
 SECTION 10.6.   Additional Covenants.................................................58
 SECTION 10.7.   Waiver of Covenants..................................................59
 SECTION 10.8.   Treatment of Securities..............................................59

                                   ARTICLE XI

                            Redemption of Securities

 SECTION 11.1.   Optional Redemption..................................................60
 SECTION 11.2.   Special Event Redemption.............................................60
 SECTION 11.3.   Election to Redeem; Notice to Trustee................................60
 SECTION 11.4.   Selection of Securities to be Redeemed...............................60
 SECTION 11.5.   Notice of Redemption.................................................61
 SECTION 11.6.   Deposit of Redemption Price..........................................62
 SECTION 11.7.   Payment of Securities Called for Redemption..........................62
</TABLE>

                                      -iii-

<PAGE>

                                   ARTICLE XII

                           Subordination of Securities
<TABLE>
<CAPTION>
<S>              <C>                                                                  <C>
 SECTION 12.1.   Securities Subordinate to Senior Debt................................62
 SECTION 12.2.   No Payment When Senior Debt in Default; Payment Over of Proceeds
                 Upon Dissolution, Etc. ..............................................63
 SECTION 12.3.   Payment Permitted If No Default......................................64
 SECTION 12.4.   Subrogation to Rights of Holders of Senior Debt......................64
 SECTION 12.5.   Provisions Solely to Define Relative Rights..........................65
 SECTION 12.6.   Trustee to Effectuate Subordination..................................65
 SECTION 12.7.   No Waiver of Subordination Provisions................................65
 SECTION 12.8.   Notice to Trustee....................................................66
 SECTION 12.9.   Reliance on Judicial Order or Certificate of Liquidating Agent.......66
 SECTION 12.10.  Trustee Not Fiduciary for Holders of Senior Debt.....................67
 SECTION 12.11.  Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's
                 Rights ..............................................................67
 SECTION 12.12.  Article Applicable to Paying Agents..................................67
</TABLE>

                                    SCHEDULES

Schedule A       Determination of LIBOR

Exhibit A        Form of Financial Officer's Certificate
Exhibit B        Form of Officers' Certificate pursuant to Section 10.3

                                      -iv-

<PAGE>

     JUNIOR SUBORDINATED INDENTURE, dated as of September 27, 2006, between
Temecula Valley Bancorp Inc., a California corporation (the "Company"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Trustee (in such
capacity, the "Trustee").

                             RECITALS OF THE COMPANY

     WHEREAS, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its unsecured junior subordinated
deferrable interest notes (the "Securities") issued to evidence loans made to
the Company of the proceeds from the issuance by Temecula Valley Statutory Trust
V, a Delaware statutory trust (the "Trust"), of undivided preferred beneficial
interests in the assets of the Trust (the "Preferred Securities") and undivided
common beneficial interests in the assets of the Trust (the "Common Securities"
and, collectively with the Preferred Securities, the "Trust Securities"), and to
provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered; and

     WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.

     Now, therefore, this Indenture Witnesseth:

     For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

                                   ARTICLE I

     Definitions and Other Provisions of General Application

     SECTION 1.1. Definitions.

     For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

          (a) the terms defined in this Article I have the meanings assigned to
     them in this Article I;

          (b) the words "include", "includes" and "including" shall be deemed to
     be followed by the phrase "without limitation";

          (c) all accounting terms not otherwise defined herein have the
     meanings assigned to them in accordance with GAAP;

          (d) unless the context otherwise requires, any reference to an
     "Article" or a "Section" refers to an Article or a Section, as the case may
     be, of this Indenture;

          (e) the words "hereby", "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;

                                       1

<PAGE>

          (f) a reference to the singular includes the plural and vice versa;
     and

          (g) the masculine, feminine or neuter genders used herein shall
     include the masculine, feminine and neuter genders.

          "Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.

          "Additional Interest" means the interest, if any, that shall accrue on
any amounts payable on the Securities, the payment of which has not been made on
the applicable Interest Payment Date and which shall accrue at the rate per
annum, compounded quarterly, specified or determined as specified in such
Security.

         "Additional Tax Sums" has the meaning specified in Section 10.5.

         "Additional Taxes" means taxes, duties or other governmental charges
imposed on the Trust as a result of a Tax Event (which, for the sake of clarity,
does not include amounts required to be deducted or withheld by the Trust from
payments made by the Trust to or for the benefit of the Holder of, or any Person
that acquires a beneficial interest in, the Securities).

         "Administrative Trustee" means, with respect to the Trust, a Person
identified as an "Administrative Trustee" in the Trust Agreement, solely in its
capacity as Administrative Trustee of the Trust under the Trust Agreement and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Administrative Trustee appointed as therein provided.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Applicable Depositary Procedures" means, with respect to any transfer
or transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.

         "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.11 to act on behalf of the Trustee to authenticate the
Securities.

         "Bankruptcy Code" means Title 11 of the United States Code or any
successor statute thereto, in each case as amended from time to time.

         "Board of Directors" means the board of directors of the Company or any
duly authorized committee of that board.

         "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.

                                       2

<PAGE>

         "Business Day" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in the City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee is closed for business.

         "Calculation Agent" has the meaning specified in Section 10.4.

         "Capital Disqualification Event" means the receipt by the Company of an
Opinion of Counsel experienced in such matters that, as a result of an amendment
to or a change in law, rule or regulation (including any announced prospective
change) or a change in interpretation or application of law, rule or regulation
by any legislative body, court, governmental agency or regulatory authority,
there is more than an insubstantial risk that within ninety (90) days of the
date of such opinion, the aggregate liquidation amount of the Preferred
Securities will not be eligible to be treated by the Company as "Tier 1 Capital"
(or the then equivalent) for purposes of the capital adequacy guidelines of the
Federal Reserve or other "appropriate Federal banking agency" as such term is
defined in 12 U.S.C. 1813(q), which amendment, change or prospective change
becomes effective or would become effective, as the case may be, on or after the
date of issuance of the Securities; provided, however, that the inability of the
Company to treat all or any portion of the liquidation amount of the Preferred
Securities as Tier 1 Capital shall not constitute the basis for a Capital
Disqualification Event if such inability results from the Company having such
Preferred Securities outstanding in an amount that for any reason is in excess
of the amount which may now or hereafter qualify for treatment as Tier 1 Capital
under applicable capital adequacy guidelines. By way of example, the inability
of the Company to treat all or any portion of the liquidation amount of the
Preferred Securities as Tier 1 Capital as a result of the Final Rule on
Risk-Based Capital Standards: Trust Preferred Securities and the Definition of
Capital, adopted on March 1, 2005, by the Federal Reserve, shall not constitute
the basis for a Capital Disqualification Event.

         "Common Securities" has the meaning specified in the first recital of
this Indenture.

         "Common Stock" means the common stock, no par value, of the Company.

         "Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.

         "Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board
of Directors, its Vice Chairman of the Board of Directors, its Chief Executive
Officer, President or a Vice President, and by its Chief Financial Officer,
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.

         "Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of this Indenture is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Capital Markets.

                                       3

<PAGE>

         "Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person, whether currently existing or hereafter
incurred and whether or not contingent and without duplication, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or other accrued liabilities arising in the ordinary
course of business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person, whether incurred on or prior to the date of this
Indenture or thereafter incurred, for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; (vii) every obligation of the type
referred to in clauses (i) through (vi) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable for, directly or indirectly, as obligor or
otherwise; and (viii) any renewals, extensions, refundings, amendments or
modifications of any obligation of the type referred to in clauses (i) through
(vii).

         "Defaulted Interest" has the meaning specified in Section 3.1.

         "Delaware Trustee" means, with respect to the Trust, the Person
identified as the "Delaware Trustee" in the Trust Agreement, solely in its
capacity as Delaware Trustee of the Trust under the Trust Agreement and not in
its individual capacity, or its successor in interest in such capacity, or any
successor Delaware Trustee appointed as therein provided.

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

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

         "Distributions" means amounts payable in respect of the Trust
Securities as provided in the Trust Agreement and referred to therein as
"Distributions."

         "Dollar" or "$" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public and
private debts.

         "DTC" means The Depository Trust Company, a New York corporation.

         "Equity Interests" means any of (a) the partnership interests (general
or limited) in a partnership, (b) the membership interests in a limited
liability company or (c) the shares or stock interests (both common stock and
preferred stock) in a corporation.

         "Event of Default" has the meaning specified in Section 5.1.

                                       4

<PAGE>

         "Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.

         "Expiration Date" has the meaning specified in Section 1.4.

         "Extension Period" has the meaning specified in Section 3.9.

         "Federal Reserve" means the Board of Governors of the Federal Reserve
System, the staff thereof, or a Federal Reserve Bank, acting through delegated
authority, in each case under the rules, regulations and policies of the Federal
Reserve System, or if at any time after the execution of this Indenture any such
entity is not existing and performing the duties now assigned to it , any
successor body performing similar duties or functions.

         "GAAP" means placecountry-regionUnited States generally accepted
accounting principles, consistently applied, from time to time in effect.

         "Global Security" means a Security that evidences all or part of the
Securities, the ownership and transfers of which shall be made through book
entries by a Depositary.

         "Government Obligation" means (a) any security that is (i) a direct
obligation of the United States of America of which the full faith and credit of
the United States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America or the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America, which, in
either case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (b) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any
Government Obligation that is specified in clause (a) above and held by such
bank for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any Government Obligation
that is so specified and held, provided, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of principal or
interest evidenced by such depositary receipt.

         "Guarantee Agreement" means the Guarantee Agreement executed by the
Company and Wilmington Trust Company, as Guarantee Trustee, contemporaneously
with the execution and delivery of this Indenture, for the benefit of the
holders of the Preferred Securities, as modified, amended or supplemented from
time to time.

         "Holder" means a Person in whose name a Security is registered in the
Securities Register.

         "Indenture" means this instrument as originally executed or as it may
from time to time be amended or supplemented by one or more amendments or
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof.

         "Interest Payment Date" means March 30th, June 30th, September 30th and
December 30th of each year, commencing on December 30, 2006, during the term of
this Indenture.

                                       5
<PAGE>

         "Investment Company Act" means the Investment Company Act of 1940 or
any successor statute thereto, in each case as amended from time to time.

         "Investment Company Event" means the receipt by the Company 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 (including any announced
prospective change) or a written 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
ninety (90) days of the date of such opinion will be, considered an "investment
company" that is required to be registered under the Investment Company Act,
which change or prospective change becomes effective or would become effective,
as the case may be, on or after the date of the issuance of the Securities.

         "LIBOR" has the meaning specified in Schedule A.

         "LIBOR Business Day" has the meaning specified in Schedule A.

         "LIBOR Determination Date" has the meaning specified in Schedule A.

         "Liquidation Amount" has the meaning specified in the Trust Agreement.

         "Maturity," when used with respect to any Security, means the date on
which the principal of such Security or any installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

         "Major Bank Subsidiary," means any subsidiary of the Company that is a
"major bank subsidiary" as such term is used in the Adopting Release
accompanying the Final Rule on Risk-Based Capital Standards: Trust Preferred
Securities and the Definition of Capital, adopted on March 1, 2005, by the
Federal Reserve, and as such term may subsequently be defined or interpreted in
any rule, regulation, written interpretation or other public issuance of the
Federal Reserve. For purposes of this definition, any "depository institution"
subsidiary of the Company within the meaning of Section 3(c) of the Federal
Deposit Insurance Act that would be considered a Major Bank Subsidiary except
for the fact that such subsidiary is not a "bank" within the meaning of Section
3(a) of the Bank Holding Company Act of 1956, shall be deemed to be a Major Bank
Subsidiary.

         "Notice of Default" means a written notice of the kind specified in
Section 5.1(d).

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the Chief Executive Officer, President
or a Vice President, and by the Chief Financial Officer, Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company and delivered
to the Trustee.

         "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company or any Affiliate of the Company.

         "Original Issue Date" means the date of original issuance of each
Security.

                                       6
<PAGE>

         "Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

(i)      Securities theretofore canceled by the Trustee or delivered to the
         Trustee for cancellation;

(ii)     Securities for whose payment or redemption money in the necessary
         amount has been theretofore deposited with the Trustee or any Paying
         Agent (other than the Company) in trust or set aside and segregated in
         trust by the Company (if the Company shall act as its own Paying Agent)
         for the Holders of such Securities; provided, that, if such Securities
         are to be redeemed, notice of such redemption has been duly given
         pursuant to this Indenture or provision therefor satisfactory to the
         Trustee has been made; and

(iii)    Securities that have been paid, or in substitution for or in lieu of
         which other Securities have been authenticated and delivered pursuant
         to the provisions of this Indenture, unless proof satisfactory to the
         Trustee is presented that any such Securities are held by Holders in
         whose hands such Securities are valid, binding and legal obligations of
         the Company;

provided, that, in determining whether the Holders of the requisite principal
amount of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities that a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
Notwithstanding anything herein to the contrary, Securities initially issued to
the Trust that are owned by the Trust shall be deemed to be Outstanding
notwithstanding the ownership by the Company or an Affiliate of any beneficial
interest in the Trust.

         "Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of or any premium or interest on, or other amounts
in respect of, any Securities on behalf of the Company.

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

         "Place of Payment" means, with respect to the Securities, the Corporate
Trust Office of the Trustee.

          "Preferred Securities" has the meaning specified in the first recital
of this Indenture.

                                       7
<PAGE>

         "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.

         "Proceeding" has the meaning specified in Section 12.2.

         "Property Trustee" means the Person identified as the "Property
Trustee" in the Trust Agreement, solely in its capacity as Property Trustee of
the Trust under the Trust Agreement and not in its individual capacity, or its
successor in interest in such capacity, or any successor Property Trustee
appointed as therein provided.

         "Purchase Agreement" means the Purchase Agreement, dated as of
September 27, 2006, executed and delivered by the Trust, the Depositor and the
Purchaser.

         "Purchaser" means TWE, Ltd., , as purchaser of the Preferred Securities
pursuant to the Purchase Agreement.

         "Redemption Date" means, when used with respect to any Security to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.

         "Redemption Price" means, when used with respect to any Security to be
redeemed, in whole or in part, the price at which such Security or portion
thereof is to be redeemed as fixed by or pursuant to this Indenture.

         "Reference Banks" has the meaning specified in Schedule A.

         "Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities means the date that is fifteen (15) days
preceding such Interest Payment Date (whether or not a Business Day).

         "Responsible Officer" means, with respect to the Trustee, any Senior
Vice President, any Vice President, any Assistant Vice President, the Secretary,
any Assistant Secretary, the Treasurer, any Assistant Treasurer, any Financial
Services Officer or Assistant Financial Services Officer, or any other officer
in the Corporate Trust Office of the Trustee with direct responsibility for the
administration of this Indenture 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.

         "Rights Plan" means a plan of the Company providing for the issuance by
the Company to all holders of its Equity Interests of rights entitling the
holders thereof to subscribe for or purchase Equity Interests of the Company
which rights (i) are deemed to be transferred with such Equity Interests and
(ii) are also issued in respect of future issuances of such Equity Interests, in
each case until the occurrence of a specified event or events.

         "Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.

                                       8
<PAGE>

         "Securities Act" means the Securities Act of 1933 or any successor
statute thereto, in each case as amended from time to time.

         "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.

         "Senior Debt" means the principal of and any premium and interest on
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company, whether or not such
claim for post-petition interest is allowed in such proceeding) all Debt of the
Company, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless it is provided in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, that such
obligations are not superior in right of payment to the Securities; provided,
however, that if the Company is subject to the regulation and supervision of an
"appropriate Federal banking agency" within the meaning of 12 U.S.C. 1813(q),
the Company shall have received the approval of such appropriate Federal banking
agency prior to issuing any such obligation if not otherwise generally approved;
provided further, that Senior Debt shall not include any other debt securities,
and guarantees in respect of such debt securities, issued to any trust other
than the Trust (or a trustee of such trust), partnership or other entity
affiliated with the Company that is a financing vehicle of the Company (a
"financing entity"), in connection with the issuance by such financing entity of
equity securities or other securities that are treated as equity capital for
regulatory capital purposes guaranteed by the Company pursuant to an instrument
that ranks pari passu with or junior in right of payment to the Securities,
including, without limitation, the debt securities of the Company issued under:
the Indenture, dated June 26, 2002, between the Company and State Street Bank
and Trust Company of Connecticut, National Association, as trustee,; the
Indenture, dated September 17, 2003, between the Company and U.S. Bank, National
Association, as trustee,; the Indenture, dated September 20, 2004, between the
Company and Wilmington Trust Company, as trustee; the Indenture, dated and
September 29, 2005, between the Company and Wilmington Trust Company, as
trustee.

         "Special Event" means the occurrence of a Capital Disqualification
Event, an Investment Company Event or a Tax Event.

         "Special Event Redemption Price" has the meaning specified in Section
11.2.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.1.

         "Stated Maturity" means December 30, 2036.

         "Subsidiary" means a Person more than fifty percent (50%) of the
outstanding voting stock or other voting interests of which is owned, directly
or indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For purposes of this definition,
"voting stock" means stock that ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.

         "Tax Event" means the receipt by the Company of an Opinion of Counsel
experienced in such matters to the effect that, as a result of (a) any amendment

                                        9
<PAGE>

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 (b) any judicial decision or any official
administrative pronouncement (including any private letter ruling, technical
advice memorandum or field service advice) or regulatory procedure, including
any notice or announcement of intent to adopt any such pronouncement or
procedure (an "Administrative Action"), regardless of whether such judicial
decision or Administrative Action 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, change, judicial decision or Administrative
Action is enacted, promulgated or announced, in each case, on or after the date
of issuance of the Securities, there is more than an insubstantial risk that (i)
the Trust is, or will be within ninety (90) days of the date of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Securities, (ii) interest payable by the Company on the
Securities is not, or within ninety (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 ninety
(90) days of the date of such opinion, subject to more than a de minimis amount
of other taxes, duties or other governmental charges.

         "Trust" has the meaning specified in the first recital of this
Indenture.

         "Trust Agreement" means the Amended and Restated Trust Agreement
executed and delivered by the Company, the Property Trustee, the Delaware
Trustee and the Administrative Trustees named therein, contemporaneously with
the execution and delivery of this Indenture, for the benefit of the holders of
the Trust Securities, as amended or supplemented from time to time.

         "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument, solely in its capacity as such and not in its
individual capacity, until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and, thereafter, "Trustee" shall
mean or include each Person who is then a Trustee hereunder.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
and as in effect on the date as of this Indenture.

         "Trust Securities" has the meaning specified in the first recital of
this Indenture.

          SECTION 1.2. Compliance Certificate and Opinions.

          (a) Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent
(including covenants compliance with which constitutes a condition 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 (including covenants compliance with which
constitutes a condition precedent), if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

                                       10
<PAGE>

          (b) Every certificate delivered to the Trustee with respect to
compliance with a condition or covenant provided for in this Indenture (other
than the certificate provided pursuant to Section 10.3) shall include:

               (i) a statement by each individual signing such certificate or
          opinion that such individual has read such covenant or condition and
          the definitions herein relating thereto;

               (ii) a brief statement as to the nature and scope of the
          examination or investigation upon which the statements or opinions of
          such individual contained in such certificate or opinion are based;

               (iii) a statement that, in the opinion of such individual, he or
          she has made such examination or investigation as is necessary to
          enable him or her to express an informed opinion as to whether or not
          such covenant or condition has been complied with; and

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

          SECTION 1.3. Forms of Documents Delivered to Trustee.

          (a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

          (b) Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or after reasonable
inquiry should know, that the certificate or opinion or representations with
respect to matters upon which his or her certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or after reasonable inquiry should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.

          (c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

          (d) Whenever, subsequent to the receipt by the Trustee of any Board
Resolution, Officers' Certificate, Opinion of Counsel or other document or
instrument, a clerical, typographical or other inadvertent or unintentional
error or omission shall be discovered therein, a new document or instrument may
be substituted therefor in corrected form with the same force and effect as if
originally received in the corrected form and, irrespective of the date or dates
of the actual execution and/or delivery thereof, such substitute document or
instrument shall be deemed to have been executed and/or delivered as of the date
or dates required with respect to the document or instrument for which it is

                                       11
<PAGE>

substituted. Without limiting the generality of the foregoing, any Securities
issued under the authority of such defective document or instrument shall
nevertheless be the valid obligations of the Company entitled to the benefits of
this Indenture equally and ratably with all other Outstanding Securities.

     SECTION 1.4. Acts of Holders.

     (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent thereof duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments (including any
appointment of an agent) is or are delivered to the Trustee, and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section 1.4.

     (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him or her the execution thereof. Where such
execution is by a Person acting in other than his or her individual capacity,
such certificate or affidavit shall also constitute sufficient proof of his or
her authority. The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.

     (c) The ownership of Securities shall be proved by the Securities Register.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.

     (e) Without limiting the foregoing, a Holder entitled to take any action
hereunder with regard to any particular Security may do so with regard to all or
any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

     (f) Except as set forth in paragraph (g) of this Section 1.4, the Company
may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders of Securities.
If any record date is set pursuant to this paragraph, the Holders of Outstanding

                                       12
<PAGE>

Securities on such record date, and no other Holders, shall be entitled to take
the relevant action, whether or not such Holders remain Holders after such
record date; provided, that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date (as defined below) by
Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Company
from setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect). Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities in the manner
set forth in Section 1.6.

     (g) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration or
rescission or annulment thereof referred to in Section 5.2, (iii) any request to
institute proceedings referred to in Section 5.7(b) or (iv) any direction
referred to in Section 5.12. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided, that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities on such record date. Nothing in this paragraph
shall be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect). Promptly after any record
date is set pursuant to this paragraph, the Trustee, at the Company's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities in the manner set forth in Section 1.6.

     (h) With respect to any record date set pursuant to paragraph (f) or (g) of
this Section 1.4, the party hereto that sets such record date may designate any
day as the "Expiration Date" and from time to time may change the Expiration
Date to any earlier or later day; provided, that no such change shall be
effective unless notice of the proposed new Expiration Date is given to the
other party hereto in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section 1.4, the party hereto that set such record date shall be deemed
to have initially designated the ninetieth (90th) day after such record date as
the Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the one hundred and eightieth (180th) day
after the applicable record date.

     SECTION 1.5. Notices, Etc.

     Any request, demand, authorization, direction, notice, consent, waiver, Act
of Holders, or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with:

                                       13
<PAGE>

     (a) the Trustee by any Holder, any holder of Preferred Securities or the
Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office,

     (b) the Company by the Trustee, any Holder or any holder of Preferred
Securities shall be sufficient for every purpose hereunder if in writing and
mailed, first class, postage prepaid, to the Company addressed to it at 27710
Jefferson Avenue #A100, Temecula, CA 92590, Attn: Chief Financial Officer, or at
any other address previously furnished in writing to the Trustee by the Company,

     (c) the Purchaser by the Trustee, the Company, any Holder or any holder or
beneficial owner of the Preferred Securities, shall be sufficient for every
purpose hereunder if in writing and mailed first-class postage prepaid to the
Purchaser at: c/o Maples Finance Limited, P.O. Box 1093 GT, Queensgate House,
South Church Street, George Town, Grand Cayman, Cayman Islands, Attention: The
Directors, or any other address previously furnished by the Purchaser.

     SECTION 1.6. Notice to Holders; Waiver.

     Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class, postage prepaid, to each Holder affected
by such event to the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail service or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

     SECTION 1.7. Effect of Headings and Table of Contents.

     The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction of this Indenture.

     SECTION 1.8. Successors and Assigns.

     This Indenture shall be binding upon and shall inure to the benefit of any
successor to the Company and the Trustee, including any successor by operation
of law. Except in connection with a transaction involving the Company that is
permitted under Article VIII and pursuant to which the assignee agrees in
writing to perform the Company's obligations hereunder, the Company shall not
assign its obligations hereunder.

                                       14
<PAGE>

     SECTION 1.9. Separability Clause.

     If any provision in this Indenture or in the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, and
there shall be deemed substituted for the provision at issue a valid, legal and
enforceable provision as similar as possible to the provision at issue.

     SECTION 1.10. Benefits of Indenture.

     Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Debt, the Holders of the Securities and, to the
extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.2 and 10.7,
the holders of Preferred Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.

     SECTION 1.11. Governing Law.

     This Indenture and the rights and obligations of each of the Holders, the
Company and the Trustee shall be construed and enforced in accordance with and
governed by the laws of the State of New York without reference to its conflict
of laws provisions (other than Section 5-1401 of the General Obligations Law).

     SECTION 1.12. Submission to Jurisdiction.

     ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS INDENTURE MAY BE BROUGHT IN OR REMOVED TO THE
COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE
SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS
INDENTURE, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND
COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS INDENTURE.

     SECTION 1.13. Non-Business Days.

     If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest, premium, if any, or
principal or other amounts in respect of such Security shall not be made on such
date, but shall be made on the next succeeding Business Day (and no interest
shall accrue in respect of the amounts whose payment is so delayed for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day) except
that, if such Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity.

                                       15
<PAGE>

                                   ARTICLE II

                                 Security Forms

          SECTION 2.1. Form of Security.

   Any Security issued hereunder shall be in substantially the following form:

                          Temecula Valley Bancorp Inc.

                 Floating Rate Junior Subordinated Note due 2036

No. _____________                                                    $__________

         Temecula Valley Bancorp Inc., a corporation organized and existing
under the laws of California (hereinafter called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _______________ (the "Holder"), or
registered assigns, the principal sum of $__________ DOLLARS [if the Security is
a Global Security, then insert-- or such other principal amount represented
hereby as may be set forth in the records of the Securities Registrar
hereinafter referred to in accordance with the Indenture] on December 30, 2036.
The Company further promises to pay interest on said principal sum from
September 27, 2006, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on March 30th, June 30th, September 30th and
December 30th of each year, commencing on December 30, 2006, or if any such day
is not a Business Day, on the next succeeding Business Day (and no interest
shall accrue in respect of the amounts whose payment is so delayed for the
period from and after such Interest Payment Date until such next succeeding
Business Day), except that, if such Business Day falls in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case, with the same force and effect as if made on the Interest
Payment Date, at a variable rate per annum, reset quarterly, equal to LIBOR plus
1.60%, together with Additional Tax Sums, if any, as provided in Section 10.5 of
the Indenture, until the principal hereof is paid or duly provided for or made
available for payment; provided, that any overdue principal, premium, if any, or
Additional Tax Sums and any overdue installment of interest shall bear
Additional Interest (to the extent that the payment of such interest shall be
legally enforceable) at a variable rate per annum, reset quarterly, equal to
LIBOR plus 1.60%, compounded quarterly, from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand.

         The amount of interest payable for any interest period shall be
computed and paid on the basis of a 360-day year and the actual number of days
elapsed in the relevant interest period. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date shall, as provided in
the Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular

                                       16
<PAGE>

Record Date for such interest installment. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than ten (10) days prior to such Special Record Date, or be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Securities may be
listed, traded or quoted and upon such notice as may be required by such
exchange or automated quotation system, all as more fully provided in the
Indenture.

         So long as no Event of Default pursuant to Sections 5.1(c), (e), (f),
(g) or (h) of the Indenture has occurred and is continuing, the Company shall
have the right, at any time and from time to time during the term of this
Security, to defer the payment of interest on this Security for a period of up
to twenty (20) consecutive quarterly interest payment periods (each such period,
an "Extension Period"), during which Extension Period(s), no interest shall be
due and payable (except any Additional Tax Sums that may be due and payable). No
Extension Period shall end on a date other than an Interest Payment Date, and no
Extension Period shall extend beyond the Stated Maturity of the principal of
this Security. No interest shall be due and payable during an Extension Period
(except any Additional Tax Sums that may be due and payable), 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 payment of such interest would be legally enforceable) at a variable rate
per annum, reset quarterly, equal to LIBOR plus 1.60%, compounded quarterly,
from the dates on which amounts would have otherwise been due and payable until
paid or made available for payment. At the end of any such Extension Period, the
Company shall pay all interest then accrued and unpaid on this Security,
together with such Additional Interest. Prior to the termination of any such
Extension Period, the Company may further defer the payment of interest;
provided, that (i) all such previous and further extensions comprising such
Extension Period do not exceed twenty (20) quarterly interest payment periods,
(ii) no Extension Period shall end on a date other than an Interest Payment Date
and (iii) no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security. Upon the termination of any such Extension Period
and upon the payment of all accrued and unpaid interest and any Additional
Interest then due on any Interest Payment Date, the Company may elect to begin a
new Extension Period; provided, that (i) such Extension Period does not exceed
twenty (20) quarterly interest payment periods, (ii) no Extension Period shall
end on a date other than an Interest Payment Date, (iii) no Extension Period
shall extend beyond the Stated Maturity of the principal of this Security and
(iv) no Event of Default pursuant to Sections 5.1(c), (e), (f), (g) or (h) has
occurred and is continuing. The Company shall give (i) the Holder of this
Security, (ii) the Trustee, (iii) the Property Trustee and (iv) any beneficial
owner of the Preferred Securities reasonably identified to the Company (which
identification may be made either by such beneficial owner or by the the
Purchaser) written notice of its election to begin any such Extension Period no
later than the close of business on the fifteenth (15th) Business Day prior to
the next succeeding Interest Payment Date on which interest on this Security
would be payable but for such deferral.

         During any such Extension Period, the Company shall not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's Equity Interests, (ii)
vote in favor of or permit or otherwise allow any of its Subsidiaries to declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to or otherwise retire, any of such
Subsidiary's Equity Interests entitling the holders thereof to a stated rate of

                                       17
<PAGE>

return, other than dividends or distributions on Equity Interests issued by any
Subsidiary solely payable to the Company or any Subsidiary thereof (for the
avoidance of doubt, whether such Equity Interests are perpetual or otherwise),
or (iii) make any payment of principal of or any interest or premium on or
repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to this Security (other than
(a) repurchases, redemptions or other acquisitions of Equity Interests of the
Company in connection with (1) any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, (2) a dividend reinvestment or stockholder
stock purchase or similar plan with respect to any Equity Interests or (3) the
issuance of Equity Interests of the Company (or securities convertible into or
exercisable for such Equity Interests) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company's
Equity Interests (or any Equity Interests of a Subsidiary of the Company) for
any class or series of the Company's Equity Interests or of any class or series
of the Company's indebtedness for any class or series of the Company's Equity
Interests, (c) the purchase of fractional interests in Equity Interests of the
Company pursuant to the conversion or exchange provisions of such Equity
Interests or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any Rights Plan, the issuance of rights, Equity
Interests or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto or (e) any dividend in the form of Equity
Interests, warrants, options or other rights where the dividend Equity Interests
or the Equity Interests issuable upon exercise of such warrants, options or
other rights are the same Equity Interests as those on which the dividend is
being paid or rank pari passu with or junior to such Equity Interests).

         Payment of principal of, premium, if any, and interest on this Security
shall be made in such coin or currency of the placecountry-regionUnited States
of America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal, premium, if any, and interest due at the
Maturity of this Security shall be made at the office or agency of the Company
maintained for that purpose in the Place of Payment upon surrender of such
Securities to the Paying Agent, and payments of interest shall be made, subject
to such surrender where applicable, by wire transfer at such place and to such
account at a banking institution in the United States as may be designated in
writing to the Paying Agent at least ten (10) Business Days prior to the date
for payment by the Person entitled thereto unless proper written wire transfer
instructions have not been received by the relevant record date, in which case
such payments shall be made by check mailed to the address of such Person as
such address shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of this Security is the Property Trustee, the
payment of the principal of (and premium, if any) and interest (including any
overdue installment of interest and Additional Tax Sums, if any) on this
Security will be made at such place and to such account as may be designated by
the Property Trustee.

         The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
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 actions as
may be necessary or appropriate to effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and all such

                                       18
<PAGE>

purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.

         Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

         This Security is one of a duly authorized issue of securities of the
Company (the "Securities") issued under the Junior Subordinated Indenture, dated
as of September 27, 2006 (the "Indenture"), between the Company and Wilmington
Trust Company, as Trustee (in such capacity, the "Trustee," which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Debt and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.

         All terms used in this Security that are defined in the Indenture or in
the Amended and Restated Trust Agreement, dated as of September 27, 2006 (as
modified, amended or supplemented from time to time, the "Trust Agreement"),
relating to Temecula Valley Statutory Trust V (the "Trust"), among the Company,
as Depositor, the trustees named therein and the holders from time to time of
the Trust Securities issued pursuant thereto, shall have the meanings assigned
to them in the Indenture or the Trust Agreement, as the case may be.

         The Company may, on any Interest Payment Date, at its option, upon not
less than thirty (30) days' nor more than sixty (60) days' written notice to the
Holders of the Securities (unless a shorter notice period shall be satisfactory
to the Trustee) on or after December 30, 2011 and subject to the terms and
conditions of Article XI of the Indenture, redeem this Security in whole at any
time or in part from time to time at a Redemption Price equal to one hundred
percent (100%) of the principal amount hereof, together, in the case of any such
redemption, with accrued interest, including any Additional Interest, to but
excluding the date fixed for redemption; provided, that the Company shall have
received the prior approval of the Federal Reserve if then required.

         In addition, upon the occurrence and during the continuation of a
Special Event, the Company may, at its option, upon not less than thirty (30)
days' nor more than sixty (60) days' written notice to the Holders of the
Securities (unless a shorter notice period shall be satisfactory to the
Trustee), redeem this Security, in whole but not in part, subject to the terms
and conditions of Article XI of the Indenture at the Special Event Redemption
Price; provided, that the Company shall have received the prior approval of the
Federal Reserve if then required.

         In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof. If less than all the
Securities are to be redeemed, the particular Securities to be redeemed shall be
selected not more than sixty (60) days prior to the Redemption Date by the
Trustee from the Outstanding Securities not previously called for redemption, by

                                       19
<PAGE>

such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of a portion of the principal amount of any
Security.

         The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities, on behalf of the
Holders of all Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.

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

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar and duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Securities, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

         The Securities are issuable only in registered form without coupons in
minimum denominations of $100,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities are exchangeable for a like aggregate principal amount of
Securities and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.

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

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

         The Company and, by its acceptance of this Security or a beneficial
interest herein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that, for United States federal, state and

                                       20
<PAGE>

local tax purposes, it is intended that this Security constitute indebtedness.

         This Security shall be construed and enforced in accordance with and
governed by the laws of the State of placeStateNew York, without reference to
its conflict of laws provisions (other than Section 5-1401 of the General
Obligations Law).

         IN WITNESS WHEREOF, the Company has duly executed this certificate this
____ day of ____________, 2006.

                                              TEMECULA VALLEY BANCORP INC.

                                              By:
                                                  ------------------------------
                                              Name:
                                              Title:

          SECTION 2.2. Restricted Legend.

          (a) Any Security issued hereunder shall bear a legend in substantially
the following form:

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

         UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
         OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
         CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
         OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
         ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
         TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
         ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
         CO., HAS AN INTEREST HEREIN.]

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
         IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF

                                       21
<PAGE>

         1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH SECURITIES, AND ANY
         INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
         THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
         EACH PURCHASER OF ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF
         THE SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
         SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE
         SECURITIES ACT.

         THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR
         THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED,
         RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY, (II) TO A
         PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
         INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
         IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR (III) TO AN
         INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
         (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
         ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN
         "ACCREDITED INVESTOR," WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
         (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, 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, IN EACH CASE
         IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
         UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IN THE CASE OF
         (III), SUBJECT TO THE RIGHT OF THE COMPANY TO REQUIRE AN OPINION OF
         COUNSEL ADDRESSING COMPLIANCE WITH THE U.S. SECURITIES LAWS, AND OTHER
         INFORMATION SATISFACTORY TO IT AND (B) THE HOLDER WILL NOTIFY ANY
         PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED
         TO IN (A) ABOVE.

         THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
         HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE
         FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF SECURITIES,
         OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE PRINCIPAL
         AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF
         SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE
         FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE
         DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE,
         INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST
         ON SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED
         TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
         SECURITIES.

                                       22
<PAGE>

         THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE
         HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT
         AN EMPLOYEE BENEFIT PLAN, 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 THIS SECURITY OR ANY INTEREST
         THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE 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, OR
         ANY INTEREST THEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR
         SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE AND 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 OR OTHER PLAN TO WHICH
         TITLE I OF ERISA OR SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE
         OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR
         PLAN, OR ANY OTHER PERSON OR ENTITY USING THE "PLAN ASSETS" OF ANY SUCH
         EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
         PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER
         SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH FULL
         EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER AN APPLICABLE STATUTORY OR
         ADMINISTRATIVE EXEMPTION.

         THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED
         STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE
         FEDERAL DEPOSIT INSURANCE CORPORATION."

          (b) The above legends shall not be removed from any Security unless
there is delivered to the Company satisfactory evidence, which may include an
Opinion of Counsel, as may be reasonably required to ensure that any future
transfers thereof may be made without restriction under or violation of the
provisions of the Securities Act and other applicable law. Upon provision of
such satisfactory evidence, the Company shall execute and deliver to the
Trustee, and the Trustee shall deliver, at the written direction of the Company,
a Security that does not bear the legend.

                                       23
<PAGE>

     SECTION 2.3. Form of Trustee's Certificate of Authentication.

     The Trustee's certificates of authentication shall be in substantially the
following form:

     This represents Securities referred to in the within-mentioned Indenture.

Dated:

                                  WILMINGTON TRUST COMPANY, not in its
                                  individual capacity but solely as Trustee

                                  By:
                                       ---------------------------------------
                                                 Authorized Officer

     SECTION 2.4. Temporary Securities.

     (a) Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities that are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.

     (b) If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for that purpose without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Securities of any authorized
denominations having the same Original Issue Date and Stated Maturity and having
the same terms as such temporary Securities. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.

     SECTION 2.5. Definitive Securities.

     The Securities issued on the Original Issue Date shall be in definitive
form. The definitive Securities shall be printed, lithographed or engraved, or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

                                       24
<PAGE>

                                  ARTICLE III

                                 The Securities

     SECTION 3.1. Payment of Principal and Interest.

     (a) The unpaid principal amount of the Securities shall bear interest at a
variable rate per annum, reset quarterly, equal to LIBOR plus 1.60% until paid
or duly provided for, such interest to accrue from the Original Issue Date or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, and any overdue principal, premium or Additional Tax Sums and
any overdue installment of interest shall bear Additional Interest (to the
extent payment of such interest would be legally enforceable) at a variable rate
per annum, reset quarterly, equal to LIBOR plus 1.60% compounded quarterly, from
the dates such amounts are due until they are paid or funds for the payment
thereof are made available for payment.

     (b) Interest and Additional Interest on any Security that is payable, and
is punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, except that interest and any Additional Interest payable on
the Stated Maturity (or any date of principal repayment upon early maturity) of
the principal of a Security or on a Redemption Date shall be paid to the Person
to whom principal is paid. The initial payment of interest on any Security that
is issued between a Regular Record Date and the related Interest Payment Date
shall be payable as provided in such Security.

     (c) Any interest on any Security that is due and payable, but is not timely
paid or duly provided for, on any Interest Payment Date for Securities (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 may be paid by the Company, at its
election in each case, as provided in paragraph (i) or (ii) below:

          (i) The Company may elect to make payment of any Defaulted Interest to
     the Persons in whose names the Securities (or their respective Predecessor
     Securities) are registered at the close of business on a special record
     date for the payment of such Defaulted Interest (a "Special Record Date"),
     which shall be fixed in the following manner. At least thirty (30) days
     prior to the date of the proposed payment, the Company shall notify the
     Trustee in writing of the amount of Defaulted Interest proposed to be paid
     on each Security 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. Thereupon the Trustee shall fix a Special Record Date for the
     payment of such Defaulted Interest, which shall be not more than fifteen
     (15) days and not less than ten (10) days prior to the date of the proposed
     payment and not less than ten (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

                                       25
<PAGE>

     Interest and the Special Record Date therefor to be mailed, first class,
     postage prepaid, to each Holder of a Security at the address of such Holder
     as it appears in the Securities Register not less than ten (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 so
     mailed, such Defaulted Interest shall be paid to the Persons in whose names
     the Securities (or their respective Predecessor Securities) are registered
     on such Special Record Date; or

          (ii) The Company may make payment of any Defaulted Interest in any
     other lawful manner not inconsistent with the requirements of any
     securities exchange or automated quotation system on which the Securities
     may be listed, traded or quoted and, upon such notice as may be required by
     such exchange or automated quotation system (or by the Trustee if the
     Securities are not listed), if, after notice given by the Company to the
     Trustee of the proposed payment pursuant to this clause, such payment shall
     be deemed practicable by the Trustee.

     (d) Payments of interest on the Securities shall include interest accrued
to but excluding the respective Interest Payment Dates. The amount of interest
payable for any interest period shall be computed and paid on the basis of a
360-day year and the actual number of days elapsed in the relevant interest
period.

     (e) Payment of principal of, premium, if any, and interest on the
Securities shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal, premium, if any, and interest due at the
Maturity of such Securities shall be made at the Place of Payment upon surrender
of such Securities to the Paying Agent and payments of interest shall be made
subject to such surrender where applicable, by wire transfer at such place and
to such account at a banking institution in the United States as may be
designated in writing to the Paying Agent at least ten (10) Business Days prior
to the date for payment by the Person entitled thereto unless proper written
transfer instructions have not been received by the relevant record date, in
which case such payments shall be made by check mailed to the address of such
Person as such address shall appear in the Security Register. Notwithstanding
the foregoing, so long as the holder of the Security is the Property Trustee,
the payment of the principal of (and premium if any) and interest (including any
overdue installment of interest and Additional Tax Sums, if any) on the Security
will be made at such place and to such account as may be designated by the
Property Trustee.

     (f) Subject to the foregoing provisions of this Section 3.1, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Security.

     SECTION 3.2. Denominations.

     The Securities shall be in registered form without coupons and shall be
issuable in minimum denominations of $100,000 and any integral multiple of
$1,000 in excess thereof.

                                       26
<PAGE>

     SECTION 3.3. Execution, Authentication, Delivery and Dating.

     (a) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities in an aggregate principal
amount (including all then Outstanding Securities) not in excess of $12,372,000
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon:

          (i) a copy of any Board Resolution relating thereto; and

          (ii) an Opinion of Counsel stating that (1) such Securities, when
     authenticated and delivered by the Trustee and issued by the Company 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 bankruptcy, insolvency, fraudulent transfer, reorganization,
     moratorium and similar laws of general applicability relating to or
     affecting creditors' rights and to general equity principles; (2) the
     Securities have been duly authorized and executed by the Company and have
     been delivered to the Trustee for authentication in accordance with this
     Indenture; and (3) the Securities are not required to be registered under
     the Securities Act.

     (b) The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents. The signature of any of
these officers on the Securities may be manual or facsimile. Securities bearing
the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.

     (c) No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 3.8, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

     (d) Each Security shall be dated the date of its authentication.

     SECTION 3.4. Global Securities.

     (a) Upon the election of the Holder after the Original Issue Date, which
election need not be in writing, the Securities owned by such Holder shall be

                                       27
<PAGE>

issued in the form of one or more Global Securities registered in the name of
the Depositary or its nominee. Each Global Security issued under this Indenture
shall be registered in the name of the Depositary designated by the Company for
such Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.

     (b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for registered Securities, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee and the Company in
writing that such Depositary is no longer willing or able to properly discharge
its responsibilities as Depositary with respect to such Global Security, and no
qualified successor is appointed by the Company within ninety (90) days of
receipt by the Company of such notice, (ii) such Depositary ceases to be a
clearing agency registered under the Exchange Act and no successor is appointed
by the Company within ninety (90) days after obtaining knowledge of such event,
(iii) the Company executes and delivers to the Trustee a Company Order stating
that the Company elects to terminate the book-entry system through the
Depositary or (iv) an Event of Default shall have occurred and be continuing.
Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv)
above, the Trustee shall notify the Depositary and instruct the Depositary to
notify all owners of beneficial interests in such Global Security of the
occurrence of such event and of the availability of Securities to such owners of
beneficial interests requesting the same. Upon the issuance of such Securities
and the registration in the Securities Register of such Securities in the names
of the Holders of the beneficial interests therein, the Trustees shall recognize
such holders of beneficial interests as Holders.

     (c) If any Global Security is to be exchanged for other Securities or
canceled in part, or if another Security is to be exchanged in whole or in part
for a beneficial interest in any Global Security, then either (i) such Global
Security shall be so surrendered for exchange or cancellation as provided in
this Article III or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Securities Registrar,
whereupon the Trustee, in accordance with the Applicable Depositary Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security by the Depositary, accompanied by registration
instructions, the Company shall execute and the Trustee shall authenticate and
deliver any Securities issuable in exchange for such Global Security (or any
portion thereof) in accordance with the instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.

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

                                       28
<PAGE>

     (e) Securities distributed to holders of Book-Entry Preferred Securities
(as defined in the Trust Agreement) upon the dissolution of the Trust shall be
distributed in the form of one or more Global Securities registered in the name
of a Depositary or its nominee, and deposited with the Securities Registrar, as
custodian for such Depositary, or with such Depositary, for credit by the
Depositary to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct). Securities
distributed to holders of Preferred Securities other than Book-Entry Preferred
Securities upon the dissolution of the Trust shall not be issued in the form of
a Global Security or any other form intended to facilitate book-entry trading in
beneficial interests in such Securities.

     (f) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Depositary
Procedures. Accordingly, any such owner's beneficial interest in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Depositary Participants. The Securities Registrar and the Trustee shall be
entitled to deal with the Depositary for all purposes of this Indenture relating
to a Global Security (including the payment of principal and interest thereon
and the giving of instructions or directions by owners of beneficial interests
therein and the giving of notices) as the sole Holder of the Security and shall
have no obligations to the owners of beneficial interests therein. Neither the
Trustee nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Depositary.

     (g) The rights of owners of beneficial interests in a Global Security shall
be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Depositary Participants.

     (h) No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. None of the Company, the Trustee nor any
agent of the Company or the Trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by a Depositary or
impair, as between a Depositary and such holders of beneficial interests, the
operation of customary practices governing the exercise of the rights of the
Depositary (or its nominee) as Holder of any Security.

     SECTION 3.5. Registration, Transfer and Exchange Generally.

     (a) The Trustee shall cause to be kept at the Corporate Trust Office a
register (the "Securities Register") in which the registrar and transfer agent
with respect to the Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Securities and of transfers and exchanges of Securities. The Trustee shall at

                                       29
<PAGE>

all times also be the Securities Registrar. The provisions of Article VI shall
apply to the Trustee in its role as Securities Registrar.

     (b) Subject to compliance with Section 2.2(b), upon surrender for
registration of transfer of any Security at the offices or agencies of the
Company designated for that purpose the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations of like
tenor and aggregate principal amount.

     (c) At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations, of like tenor and aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and upon receipt thereof the Trustee shall authenticate
and deliver, the Securities that the Holder making the exchange is entitled to
receive.

     (d) All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.

     (e) Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing.

     (f) No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities.

     (g) Neither the Company nor the Trustee shall be required pursuant to the
provisions of this Section 3.5 (i) to issue, register the transfer of or
exchange any Security during a period beginning at the opening of business
fifteen (15) days before the day of selection for redemption of Securities
pursuant to Article XI and ending at the close of business on the day of mailing
of the notice of redemption or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of
any such Security to be redeemed in part, any portion thereof not to be
redeemed.

     (h) The Company shall designate an office or offices or agency or agencies
where Securities may be surrendered for registration or transfer or exchange.
The Company initially designates the Corporate Trust Office as its office and
agency for such purposes. The Company shall give prompt written notice to the
Trustee and to the Holders of any change in the location of any such office or
agency.

     SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.

     (a) If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to

                                       30
<PAGE>

save each of them harmless, the Company shall execute and upon receipt thereof
the Trustee shall authenticate and deliver in exchange therefor a new Security
of like tenor and aggregate principal amount and bearing a number not
contemporaneously outstanding.

     (b) If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a bona fide purchaser, the Company shall
execute and upon its written request the Trustee shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and aggregate principal amount as such destroyed, lost or stolen Security,
and bearing a number not contemporaneously outstanding.

     (c) If any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security.

     (d) Upon the issuance of any new Security under this Section 3.6, 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 (including the fees and expenses of the Trustee) connected therewith.

     (e) Every new Security issued pursuant to this Section 3.6 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.

     (f) The provisions of this Section 3.6 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

     SECTION 3.7. Persons Deemed Owners.

     The Company, the Trustee and any agent of the Company or the Trustee shall
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any interest
on such Security and for all other purposes whatsoever, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.

     SECTION 3.8. Cancellation.

     All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee, and any such Securities and Securities surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by

                                       31
<PAGE>

the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section 3.8, except as expressly
permitted by this Indenture. All canceled Securities shall be disposed of by the
Trustee in accordance with its customary practices and the Trustee shall deliver
to the Company a certificate of such disposition.

     SECTION 3.9. Deferrals of Interest Payment Dates.

     (a) So long as no Event of Default pursuant to Sections 5.1(c), (e), (f),
(g) or (h) has occurred and is continuing, the Company shall have the right, at
any time and from time to time during the term of the Security, to defer the
payment of interest on the Securities for a period of up to twenty (20)
consecutive quarterly interest payment periods (each such period, an "Extension
Period"), during which Extension Period(s), the Company shall have the right to
make no payments or partial payments of interest on any Interest Payment Date
(except any Additional Tax Sums that otherwise may be due and payable). No
Extension Period shall end on a date other than an Interest Payment Date and no
Extension Period shall extend beyond the Stated Maturity of the principal of the
Securities. No 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 payment of such interest would be legally enforceable)
at a variable rate per annum, reset quarterly, equal to LIBOR plus 1.60%,
compounded quarterly, from the dates on which amounts would have otherwise been
due and payable until paid or until funds for the payment thereof have been made
available for payment. At the end of any such Extension Period, the Company
shall pay all interest then accrued and unpaid on the Securities together with
such Additional Interest. Prior to the termination of any such Extension Period,
the Company may extend such Extension Period and further defer the payment of
interest; provided, that (i) all such previous and further extensions comprising
such Extension Period do not exceed twenty (20) quarterly interest payment
periods, (ii) no Extension Period shall end on a date other than an Interest
Payment Date and (iii) no Extension Period shall extend beyond the Stated
Maturity of the principal of the Securities. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Company may elect
to begin a new Extension Period; provided, that (i) such Extension Period does
not exceed twenty (20) quarterly interest payment periods, (ii) no Extension
Period shall end on a date other than an Interest Payment Date, (iii) no
Extension Period shall extend beyond the Stated Maturity of the principal of the
Securities and (iv) no Event of Default pursuant to Sections 5.1(c), (e), (f),
(g) or (h) has occurred and is continuing. The Company shall give (i) the
Holders of the Securities, (ii) the Trustee, (iii) the Property Trustee and (iv)
any beneficial owner of the Preferred Securities reasonably identified to the
Company (which identification may be made either by such beneficial owner or by
the Purchaser) written notice of its election to begin any such Extension Period
no later than the close of business on the fifteenth (15th) Business Day prior
to the next succeeding Interest Payment Date on which interest on the Securities
would be payable but for such deferral.

     (b) In connection with any such Extension Period, the Company shall be
subject to the restrictions set forth in Section 10.6(a).

                                       32
<PAGE>

     SECTION 3.10. Right of Set-Off.

     Notwithstanding anything to the contrary herein, the Company shall have the
right to set off any payment it is otherwise required to make in respect of any
Security to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee Agreement
relating to such Security or to a holder of Preferred Securities pursuant to an
action undertaken under Section 5.8 of this Indenture.

     SECTION 3.11. Agreed Tax Treatment.

     Each Security issued hereunder shall provide that the Company and, by its
acceptance or acquisition of a Security or a beneficial interest therein, the
Holder of, and any Person that acquires a direct or indirect beneficial interest
in, such Security, intend and agree to treat such Security as indebtedness of
the Company for United States Federal, state and local tax purposes and to treat
the Preferred Securities (including but not limited to all payments and proceeds
with respect to the Preferred Securities) as an undivided beneficial ownership
interest in the Securities (and payments and proceeds therefrom, respectively)
for United States Federal, state and local tax purposes. The provisions of this
Indenture shall be interpreted to further this intention and agreement of the
parties.

     SECTION 3.12. CUSIP Numbers.

     The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption and other similar or related materials as a convenience to
Holders; provided, that any such notice or other materials may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or other materials
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers.

                                   ARTICLE IV

                           Satisfaction and Discharge

     SECTION 4.1. Satisfaction and Discharge of Indenture.

     This Indenture shall, upon Company Request, cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and as otherwise provided in this
Section 4.1) and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when

     (a) either

          (i) all Securities theretofore authenticated and delivered (other than
     (A) Securities that have been mutilated, destroyed, lost or stolen and that
     have been replaced or paid as provided in Section 3.6 and (B) Securities
     for whose payment money has theretofore been deposited in trust or
     segregated and held in trust by the Company and thereafter repaid to the

                                       33
<PAGE>

     Company or discharged from such trust as provided in Section 10.2) have
     been delivered to the Trustee for cancellation; or

          (ii) all such Securities not theretofore delivered to the Trustee for
     cancellation

               (A)  have become due and payable, or

               (B)  will become due and payable at their Stated Maturity within
                    one year of the date of deposit, or

               (C)  are to be called for redemption within one year under
                    arrangements satisfactory to the Trustee for the giving of
                    notice of redemption by the Trustee in the name, and at the
                    expense, of the Company,

     and the Company, in the case of subclause (ii)(A), (B) or (C) above, has
     deposited or caused to be deposited with the Trustee as trust funds in
     trust for such purpose (x) an amount in the currency or currencies in which
     the Securities are payable, (y) Government Obligations which through the
     scheduled payment of principal and interest in respect thereof in
     accordance with their terms will provide, not later than the due date of
     any payment, money in an amount or (z) a combination thereof, in each case
     sufficient, in the opinion of a nationally recognized firm of independent
     public accountants expressed in a written certification thereof delivered
     to the Trustee, to pay and discharge the entire indebtedness on such
     Securities not theretofore delivered to the Trustee for cancellation, for
     principal and any premium and interest (including any Additional Interest)
     to the date of such deposit (in the case of Securities that have become due
     and payable) or to the Stated Maturity (or any date of principal repayment
     upon early maturity) or Redemption Date, as the case may be;

     (b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

     (c) the Company has delivered to the Trustee 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.

     Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.6, the obligations of
the Company to any Authenticating Agent under Section 6.11 and, if money shall
have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 4.1, the obligations of the Trustee under Section 4.2 and Section
10.2(e) shall survive.

     SECTION 4.2. Application of Trust Money.

     Subject to the provisions of Section 10.2(e), all money deposited with the
Trustee pursuant to Section 4.1 shall be held in trust and applied by the
Trustee, in accordance with the provisions of the Securities and this Indenture,
to the payment in accordance with Section 3.1, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any

                                       34
<PAGE>

premium and interest (including any Additional Interest) for the payment of
which such money or obligations have been deposited with or received by the
Trustee. Moneys held by the Trustee under this Section 4.2 shall not be subject
to the claims of holders of Senior Debt under Article XII.

                                   ARTICLE V

                                    Remedies

     SECTION 5.1. Events of Default.

     "Event of Default" means, wherever used herein with respect to the
Securities, 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) default in the payment of any interest upon any Security, including any
Additional Interest in respect thereof, when it becomes due and payable, and
continuance of such default for a period of thirty (30) days (subject to the
deferral of any due date in the case of an Extension Period); or

     (b) default in the payment of the principal of or any premium on any
Security at its Maturity; or

     (c) default in the payment of any interest upon any Security, including any
Additional Interest in respect thereof, following the nonpayment of any such
interest for twenty (20) or more consecutive quarterly interest payment periods;
or

     (d) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture and continuance of such default or breach for a
period of thirty (30) 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 twenty five percent (25%) in aggregate principal
amount of the Outstanding Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or

     (e) the entry by a court having jurisdiction in the premises of a decree or
order adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of sixty (60) consecutive days; or

     (f) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by the Company to the institution of
bankruptcy or insolvency proceedings against it, or the filing by the Company of
a petition or answer or consent seeking reorganization or relief under any

                                       35
<PAGE>

applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due and its willingness to be adjudicated
a bankrupt or insolvent, or the taking of corporate action by the Company in
furtherance of any such action; or

     (g) either (1) a court or administrative or governmental agency or body
shall enter a decree or order for the appointment of a receiver of a Major Bank
Subsidiary or all or substantially all of its property in any liquidation,
insolvency or similar proceeding, or (2) a Major Bank Subsidiary shall consent
to the appointment of a receiver for it or all or substantially all of its
property in any liquidation, insolvency or similar proceeding; or

     (h) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence, except
in connection with (1) the distribution of the Securities to holders of the
Preferred Securities in liquidation of their interests in the Trust, (2) the
redemption of all of the outstanding Preferred Securities or (3) certain
mergers, consolidations or amalgamations, each as and to the extent permitted by
the Trust Agreement.

     SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.

     (a) If an Event of Default pursuant to Sections 5.1(c), (e), (f), (g) or
(h) occurs and is continuing, then and in every such case the Trustee or the
Holders of not less than twenty five percent (25%) in principal amount of the
Outstanding Securities may declare the principal amount of all the Securities to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided, that if, upon an Event of Default
pursuant to Sections 5.1(c), (e), (f), (g) or (h), the Trustee or the Holders of
not less than twenty five percent (25%) in principal amount of the Outstanding
Securities fail to declare the principal of all the Outstanding Securities to be
immediately due and payable, the holders of at least twenty five percent (25%)
in aggregate Liquidation Amount of the Preferred Securities then outstanding
shall have the right to make such declaration by a notice in writing to the
Property Trustee, the Company and the Trustee; and upon any such declaration the
principal amount of and the accrued interest (including any Additional Interest)
on all the Securities shall become immediately due and payable.

     (b) At any time after such a declaration of acceleration with respect to
Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter provided in this
Article V, the Holders of a majority in principal amount of the Outstanding
Securities, by written notice to the Indenture Trustee, or the holders of a
majority in aggregate Liquidation Amount of the Preferred Securities, by written
notice to the Property Trustee, the Company and the Trustee, may rescind and
annul such declaration and its consequences if:

          (i) the Company has paid or deposited with the Trustee a sum
     sufficient to pay:

                                       36
<PAGE>

               (A)  all overdue installments of interest on all Securities,

               (B)  any accrued Additional Interest on all Securities,

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

               (D)  all sums paid or advanced by the Trustee hereunder and the
                    reasonable compensation, expenses, disbursements and
                    advances of the Trustee, the Property Trustee and their
                    agents and counsel; and

          (ii) all Events of Default with respect to Securities, other than the
     non-payment of the principal of Securities that has become due solely by
     such acceleration, have been cured or waived as provided in Section 5.13;

provided, that if the Holders of such Securities fail to annul such declaration
and waive such default, the holders of not less than a majority in aggregate
Liquidation Amount of the Preferred Securities then outstanding shall also have
the right to rescind and annul such declaration and its consequences by written
notice to the Property Trustee, the Company and the Trustee, subject to the
satisfaction of the conditions set forth in paragraph (b) of this Section 5.2.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.

     SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.

     (a) The Company covenants that if:

          (i) default is made in the payment of any installment of interest
     (including any Additional Interest) on any Security when such interest
     becomes due and payable and such default continues for a period of thirty
     (30) days, or

          (ii) default is made in the payment of the principal of and any
     premium on any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and any premium and interest (including any
Additional Interest) and, in addition thereto, all amounts owing the Trustee
under Section 6.6.

     (b) If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.

                                       37
<PAGE>

     (c) If an Event of Default with respect to Securities occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Securities by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.

     SECTION 5.4. Trustee May File Proofs of Claim.

     In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or similar judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized hereunder in order to have claims of the Holders and the Trustee
allowed in any such proceeding. In particular, the Trustee shall be authorized
to collect and receive any moneys or other property payable or deliverable on
any such claims and to distribute the same; and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder 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 Holders, to first pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts owing the
Trustee, any predecessor Trustee and other Persons under Section 6.6.

     SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.

     All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, subject to
Article XII and after provision for the payment of all the amounts owing the
Trustee, any predecessor Trustee and other Persons under Section 6.6, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

     SECTION 5.6. Application of Money Collected.

     Any money or property collected or to be applied by the Trustee with
respect to the Securities pursuant to this Article V shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money or property on account of principal or any premium or
interest (including any Additional Interest), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:

     FIRST: To the payment of all amounts due the Trustee, any predecessor
Trustee and other Persons under Section 6.6;

     SECOND: To the payment of all Senior Debt of the Company if and to the
extent required by Article XII.

                                       38
<PAGE>

     THIRD: Subject to Article XII, to the payment of the amounts then due and
unpaid upon the Securities for principal and any premium and interest (including
any Additional Interest) in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and any
premium and interest (including any Additional Interest), respectively; and

     FOURTH: The balance, if any, to the Person or Persons entitled thereto.

     SECTION 5.7. Limitation on Suits.

     Subject to Section 5.8, no Holder of any Securities shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
or for the appointment of a custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) or for any other remedy hereunder,
unless:

     (a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities;

     (b) the Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;

     (c) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request;

     (d) the Trustee after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding for sixty (60) days; and

     (e) no direction inconsistent with such written request has been given to
the Trustee during such sixty (60)-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.

     SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest; Direct Action by Holders of Preferred Securities.

     Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium on such Security at its Maturity and
payment of interest (including any Additional Interest) on such Security when
due and payable and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder. Any
registered holder of the Preferred Securities shall have the right, upon the
occurrence of an Event of Default described in Section 5.1(a), Section 5.1(b) or

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<PAGE>

Section 5.1(c), to institute a suit directly against the Company for enforcement
of payment to such holder of principal of and any premium and interest
(including any Additional Interest) on the Securities having a principal amount
equal to the aggregate Liquidation Amount of the Preferred Securities held by
such holder.

     SECTION 5.9. Restoration of Rights and Remedies.

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

     SECTION 5.10. Rights and Remedies Cumulative.

     Except as otherwise provided in Section 3.6(f), no right or remedy herein
conferred upon or reserved to the Trustee or the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

     SECTION 5.11. Delay or Omission Not Waiver.

     No delay or omission of the Trustee, any Holder of any Securities or any
holder of any Preferred Security to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article V or by law to the Trustee or to the Holders and
the right and remedy given to the holders of Preferred Securities by Section 5.8
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee, the Holders or the holders of Preferred Securities, as the case may
be.

     SECTION 5.12. Control by Holders.

     The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities (or, as the case may be, the holders of a majority in
aggregate Liquidation Amount of the Preferred Securities) 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; provided, that:

     (a) such direction shall not be in conflict with any rule of law or with
this Indenture,

     (b) the Trustee may take any other action deemed proper by the Trustee that
is not inconsistent with such direction, and

                                       40
<PAGE>

     (c) subject to the provisions of Section 6.2, the Trustee shall have the
right to decline to follow such direction if a Responsible Officer or Officers
of the Trustee shall, in good faith, reasonably determine that the proceeding so
directed would be unjustly prejudicial to the Holders not joining in any such
direction or would involve the Trustee in personal liability.

     SECTION 5.13. Waiver of Past Defaults.

     (a) The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities and the holders of not less than a majority in
aggregate Liquidation Amount of the Preferred Securities may waive any past
Event of Default hereunder and its consequences except an Event of Default:

          (i) in the payment of the principal of or any premium or interest
     (including any Additional Interest) on any Security (unless such Event of
     Default has been cured and the Company has paid to or deposited with the
     Trustee a sum sufficient to pay all installments of interest (including any
     Additional Interest) due and past due and all principal of and any premium
     on all Securities due otherwise than by acceleration), or

          (ii) in respect of a covenant or provision hereof that under Article
     IX cannot be modified or amended without the consent of each Holder of any
     Outstanding Security.

     (b) Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities or, in the case of a waiver by holders of Preferred Securities
issued by such Trust, by all holders of Preferred Securities.

     (c) Upon any such waiver, such Event of Default shall cease to exist and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereon.

     SECTION 5.14. Undertaking for Costs.

     All parties to this Indenture agree, and each Holder of any Security by his
or her 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; but
the provisions of this Section 5.14 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than ten percent (10%) in aggregate principal amount of
the Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or any premium on the Security
after the Stated Maturity or any interest (including any Additional Interest) on
any Security after it is due and payable.

                                       41
<PAGE>

     SECTION 5.15. Waiver of Usury, Stay or Extension Laws.

     The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                   ARTICLE VI

                                   The Trustee

     SECTION 6.1. Corporate Trustee Required.

     There shall at all times be a Trustee hereunder with respect to the
Securities. The Trustee shall be a corporation organized and doing business
under the laws of the United States or of any state thereof, authorized to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or state
authority and having an office within the United States. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then, for the purposes
of this Section 6.1, 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 the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.1, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VI.

     SECTION 6.2. Certain Duties and Responsibilities.

     (a) Except during the continuance of an Event of Default:

          (i) the Trustee undertakes to perform such duties and only such duties
     as are specifically set forth in this Indenture, and no implied covenants
     or obligations shall be read into this Indenture against the Trustee; and

          (ii) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates or opinions furnished to
     the Trustee and conforming to the requirements of this Indenture; provided,
     that in the case of any such certificates or opinions that 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 substantially conform on their face to the requirements of this
     Indenture.

     (b) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall, prior to the receipt of directions, if any, from
the Holders of at least a majority in aggregate principal amount of the
Outstanding Securities (or, if applicable, from the holders of a majority in

                                       42
<PAGE>

aggregate Liquidation Amount of the Preferred Securities), exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in its exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.

     (c) Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 6.2. To the extent that, at law or in
equity, the Trustee has duties and liabilities relating to the Holders, the
Trustee shall not be liable to any Holder for the Trustee's good faith reliance
on the provisions of this Indenture. The provisions of this Indenture, to the
extent that they restrict the duties and liabilities of the Trustee otherwise
existing at law or in equity, are agreed by the Company and the Holders to
replace such other duties and liabilities of the Trustee.

     (d) No provisions of this Indenture shall be construed to relieve the
Trustee from liability with respect to matters that are within the authority of
the Trustee under this Indenture for its own negligent action, negligent failure
to act or willful misconduct, except that:

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

          (ii) 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 Holders of at least a majority in aggregate principal amount of the
     Outstanding Securities (or, if applicable, from the holders of a majority
     in aggregate Liquidation Amount of the Preferred Securities), relating to
     the time, method and place of conducting any proceeding for any remedy
     available to the Trustee under this Indenture; and

          (iii) the Trustee shall be under no liability for interest on any
     money received by it hereunder and money held by the Trustee in trust
     hereunder need not be segregated from other funds except to the extent
     required by law.

          SECTION 6.3. Notice of Defaults.

     Within ninety (90) days after the occurrence of any default actually known
to the Trustee, the Trustee shall give the Holders notice of such default unless
such default shall have been cured or waived; provided, that except in the case
of a default in the payment of the principal of or any premium or interest on
any Securities, the Trustee shall be fully protected in withholding the notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that withholding the notice is in the interest of holders of
Securities; and provided, further, that in the case of any default of the
character specified in Section 5.1(d), no such notice to Holders shall be given

                                       43
<PAGE>

until at least thirty (30) days after the occurrence thereof. For the purpose of
this Section 6.3, the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default.

     SECTION 6.4. Certain Rights of Trustee.

     Subject to the provisions of Section 6.2:

     (a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting in good faith and in accordance with the terms
hereof upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note 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) if (i) in performing its duties under this Indenture the Trustee is
required to decide between alternative courses of action, (ii) in construing any
of the provisions of this Indenture the Trustee finds ambiguous or inconsistent
with any other provisions contained herein or (iii) the Trustee is unsure of the
application of any provision of this Indenture, then, except as to any matter as
to which the Holders are entitled to decide under the terms of this Indenture,
the Trustee shall deliver a notice to the Company requesting the Company's
written instruction as to the course of action to be taken and the Trustee shall
take such action, or refrain from taking such action, as the Trustee shall be
instructed in writing to take, or to refrain from taking, by the Company;
provided, that if the Trustee does not receive such instructions from the
Company within ten Business Days after it has delivered such notice or such
reasonably shorter period of time set forth in such notice the Trustee may, but
shall be under no duty to, take such action, or refrain from taking such action,
as the Trustee shall deem advisable and in the best interests of the Holders, in
which event the Trustee shall have no liability except for its own negligence,
bad faith or willful misconduct;

     (c) any request or direction of the Company shall be sufficiently evidenced
by a Company Request or Company Order and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;

     (d) the Trustee may consult with counsel (which counsel may be counsel to
the Trustee, the Company or any of its Affiliates, and may include any of its
employees) and the advice of such counsel or any 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 reliance thereon;

     (e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders or any holder of Preferred Securities pursuant to this Indenture,
unless such Holders (or such holders of Preferred Securities) shall have offered
to the Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses (including reasonable attorneys' fees and expenses) and
liabilities that might be incurred by it in compliance with such request or
direction, including reasonable advances as may be requested by the Trustee;

                                       44
<PAGE>

     (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, direction, consent, order, bond, indenture,
note or other paper or document, but the Trustee in its discretion may make such
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney;

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

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

     (i) except as otherwise expressly provided by this Indenture, the Trustee
shall not be under any obligation to take any action that is discretionary under
the provisions of this Indenture;

     (j) without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with any bankruptcy, insolvency or other proceeding referred to in
clauses (e) or (f) of the definition of Event of Default, such expenses
(including legal fees and expenses of its agents and counsel) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy laws or law relating to creditors rights
generally;

     (k) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate addressing such matter, which,
upon receipt of such request, shall be promptly delivered by the Company;

     (l) the Trustee shall not be charged with knowledge of any default or Event
of Default unless either (i) a Responsible Officer of the Trustee shall have
actual knowledge or (ii) the Trustee shall have received written notice thereof
from the Company or a Holder; and

     (m) in the event that the Trustee is also acting as Paying Agent,
Authenticating Agent or Securities Registrar hereunder, the rights and
protections afforded to the Trustee pursuant to this Article VI shall also be
afforded such Paying Agent, Authenticating Agent, or Securities Registrar.

                                       45
<PAGE>

     SECTION 6.5. May Hold Securities.

     The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Securities Registrar or such other agent.

     SECTION 6.6. Compensation; Reimbursement; Indemnity.

     (a) The Company agrees

          (i) to pay to the Trustee from time to time reasonable compensation
     for all services rendered by it hereunder in such amounts as the Company
     and the Trustee shall agree from time to time (which compensation shall not
     be limited by any provision of law in regard to the compensation of a
     trustee of an express trust);

          (ii) to reimburse the Trustee upon its request for all reasonable
     expenses, disbursements and advances incurred or made by the Trustee in
     accordance with any provision of this Indenture (including the reasonable
     compensation and the expenses and disbursements of its agents and counsel),
     except any such expense, disbursement or advance as may be attributable to
     its negligence, bad faith or willful misconduct; and

          (iii) to the fullest extent permitted by applicable law, to indemnify
     the Trustee (including in its individual capacity) and its Affiliates, and
     their officers, directors, shareholders, agents, representatives and
     employees for, and to hold them harmless against, any loss, damage,
     liability, tax (other than income, franchise or other taxes imposed on
     amounts paid pursuant to (i) or (ii) hereof), penalty, expense or claim of
     any kind or nature whatsoever incurred without negligence, bad faith or
     willful misconduct on its part arising out of or in connection with the
     acceptance or administration of this trust or the performance of the
     Trustee's duties hereunder, including the advancement of funds to cover the
     costs and expenses of defending itself against any claim or liability in
     connection with the exercise or performance of any of its powers or duties
     hereunder.

     (b) To secure the Company's payment obligations in this Section 6.6, the
Company hereby grants and pledges to the Trustee and the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the
Trustee, other than money or property held in trust to pay principal and
interest on particular Securities. Such lien shall survive the satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee.

     (c) The obligations of the Company under this Section 6.6 shall survive the
satisfaction and discharge of this Indenture and the earlier resignation or
removal of the Trustee.

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

                                       46
<PAGE>

     (e) In no event shall the Trustee be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond its
control, including, but not limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by
this Indenture.

     SECTION 6.7. Resignation and Removal; Appointment of Successor.

     (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.8.

     (b) The Trustee may resign at any time by giving written notice thereof to
the Company.

     (c) Unless an Event of Default shall have occurred and be continuing, the
Trustee may be removed at any time by the Company by a Board Resolution. If an
Event of Default shall have occurred and be continuing, the Trustee may be
removed by Act of the Holders of a majority in aggregate principal amount of the
Outstanding Securities, delivered to the Trustee and to the Company.

     (d) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any reason, at a time
when no Event of Default shall have occurred and be continuing, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee, and such
successor Trustee and the retiring Trustee shall comply with the applicable
requirements of Section 6.8. If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any reason, at a time when an Event of Default shall have occurred and be
continuing, the Holders, by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities, shall promptly appoint a
successor Trustee, and such successor Trustee and the retiring Trustee shall
comply with the applicable requirements of Section 6.8. If no successor Trustee
shall have been so appointed by the Company or the Holders and accepted
appointment within sixty (60) days after the giving of a notice of resignation
by the Trustee or the removal of the Trustee in the manner required by Section
6.8, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of such Holder and all others similarly situated, and any
resigning Trustee may, at the expense of the Company, petition any court of
competent jurisdiction for the appointment of a successor Trustee.

     (e) The Company shall give notice to all Holders in the manner provided in
Section 1.6 of each resignation and each removal of the Trustee and each
appointment of a successor Trustee. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.

     SECTION 6.8. Acceptance of Appointment by Successor.

     (a) In case of the appointment hereunder of a successor Trustee, each
successor Trustee so appointed shall execute, acknowledge and deliver to the

                                       47
<PAGE>

Company and to the retiring Trustee an instrument accepting such appointment,
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, trusts and duties
of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.

     (b) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all rights, powers and trusts referred to in paragraph
(a) of this Section 6.8.

     (c) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article VI.

     SECTION 6.9. Merger, Conversion, Consolidation or Succession to Business.

     Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person 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,
that such Person shall be otherwise qualified and eligible under this Article
VI. In case any Securities shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
or as otherwise provided above in this Section 6.9 to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated, and in case any Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor Trustee or in the name of such successor Trustee, and in all
cases the certificate of authentication shall have the full force which it is
provided anywhere in the Securities or in this Indenture that the certificate of
the Trustee shall have.

     SECTION 6.10. Not Responsible for Recitals or Issuance of Securities.

     The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of the Securities or the proceeds thereof.

     SECTION 6.11. Appointment of Authenticating Agent.

     (a) The Trustee may appoint an Authenticating Agent or Agents with respect
to the Securities, which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon original issue and upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
3.6, and Securities so authenticated shall be entitled to the benefits of this

                                       48
<PAGE>

Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, or of any State or Territory thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or state authority. If such Authenticating
Agent publishes reports of condition at least annually pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 6.11 the combined capital and surplus of such Authenticating
Agent 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 6.11, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 6.11.

     (b) Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person succeeding to all or substantially all of the corporate
trust business of an Authenticating Agent shall be the successor Authenticating
Agent hereunder, provided such Person shall be otherwise eligible under this
Section 6.11, without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.

     (c) An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof 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 such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.11, the Trustee may appoint a successor
Authenticating Agent eligible under the provisions of this Section 6.11, which
shall be acceptable to the Company, and shall give notice of such appointment to
all Holders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent.

     (d) The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.11 in such
amounts as the Company and the Authenticating Agent shall agree from time to
time.

     (e) If an appointment of an Authenticating Agent is made pursuant to this
Section 6.11, the Securities may have endorsed thereon, in addition to the
Trustee's certificate of authentication, an alternative certificate of
authentication in the following form:

This represents Securities designated therein and referred to in the within
mentioned Indenture.

Dated:

                                       49
<PAGE>

                                    WILMINGTON TRUST COMPANY, not in its
                                    individual capacity, but solely as Trustee

                                    --------------------------------------------
                                    Authenticating Agent

                                    By:
                                        ----------------------------------------
                                          Authorized Officer

                                  ARTICLE VII

                Holders' Lists and Reports by Trustee and Company

     SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.

     The Company will furnish or cause to be furnished to the Trustee:

     (a) semi-annually, on or before June 30 and December 31 of each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of a date not more than fifteen (15) days prior to
the delivery thereof, and

     (b) at such other times as the Trustee may request in writing, within
thirty (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 fifteen (15) days prior to
the time such list is furnished, in each case to the extent such information is
in the possession or control of the Company and has not otherwise been received
by the Trustee in its capacity as Securities Registrar.

     SECTION 7.2. Preservation of Information, Communications to Holders.

     (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.

     (b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided in the Trust
Indenture Act.

     (c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.

                                       50
<PAGE>

     SECTION 7.3. Reports by Company and Trustee.

     (a) The Company shall furnish to the Holders and to prospective purchasers
of Securities, upon their request, the information required to be furnished
pursuant to Rule 144A(d)(4) under the Securities Act. The Company shall furnish
to the Trustee and, so long as the Property Trustee holds any of the Securities,
the Company shall furnish to the Property Trustee, (i) reports on Federal
Reserve form FR Y-9C, FR Y-9LP and FR Y-6 promptly following their filing with
the Federal Reserve, or (ii) if at such time the Company is no longer required
to file the reports set forth in (i) above, such other similar reports as the
Company may be required to file at such time with the Company's primary federal
banking regulator promptly following their filing with such banking regulator.

     (b) The Company shall furnish to (i) the Holders and to subsequent holders
of Securities, (ii) the Purchaser, (iii) any beneficial owner of the Securities
reasonably identified to the Company (which identification may be made either by
such beneficial owner or by the Purchaser) and (iv) any designee of (i), (ii) or
(iii) above (collectively, the "Report Recipients"), a duly completed and
executed certificate in the form attached hereto as Exhibit A, including the
financial statements referenced in such Exhibit, which certificate and financial
statements shall be so furnished by the Company not later than forty five (45)
days after the end of each of the first three fiscal quarters of each fiscal
year of the Company and not later than ninety (90) days after the end of each
fiscal year of the Company.

     (c) If the Company intends to timely file its annual and quarterly
information with the Securities and Exchange Commission (the "Commission") in
electronic form pursuant to Regulation S T of the Commission using the
Commissioner's Electronic Data Gathering, Analysis and Retrieval ("EDGAR")
system, the Company shall notify the Report Recipients in the manner prescribed
herein of each such timely annual and quarterly filing. The Report Recipients
are hereby authorized and directed to access the EDGAR system for purposes of
retrieving the financial information so filed. The Report Recipients shall have
no duty to search for or obtain any electronic or other filings that the Company
makes with the Commission, regardless of whether such filings are periodic,
supplemental or otherwise. Delivery of reports, information and documents to the
Report Recipients pursuant to this Section 7.3(c) shall be solely for purposes
of compliance with Section 7.3(b) and, if applicable, with Section 314(a) of the
Trust Indenture Act. Only those reports, information and documents timely filed
shall be considered compliant with the delivery requirements of this Section
7.3. A Report Recipient's receipt of such reports, information and documents
shall not constitute notice to it of the content thereof or any matter
determinable from the content thereof, including the Company's compliance with
any of its covenants hereunder, as to which the Report Recipients are entitled
to rely upon Officers' Certificates.

     (d) The Report Recipients agree to hold all information contained in any
financial statements provided to them pursuant to this Section 7.3 which are not
filed with or furnished to the Commission through EDGAR or otherwise made
publicly available by the Company ("Confidential Financial Statements"), in
confidence and will not directly or indirectly, transfer, publish or disclose
any such information, to any other person or entity without the prior written
consent of the Company, except and only to the extent as may be required by law
or judicial process (in which case the Report Recipients shall provide notice of
such compelled disclosure to the Company prior to (or, in the case of an on-site

                                       51
<PAGE>

governmental authority or agency examination, to the extent practicable) such
disclosure); provided that the Report Recipients shall be permitted to use such
information for the purpose of preparing and disclosing aggregate information
that is not specific to the Company. The Company agrees to promptly provide such
Confidential Financial Statements to a prospective purchaser of the Securities
who expressly agrees (orally or in writing) to maintain its confidentiality. The
Company shall place a conspicuous legend as to confidentiality on any
Confidential Financial Statements made available hereunder.

     (e) The Trustee shall receive all reports, certificates and information,
which it is entitled to receive under each of the Operative Documents (as
defined in the Trust Agreement), and deliver to (i) the Purchaser, or its
designee, as identified in writing to the Trustee, all such reports,
certificates or information promptly upon receipt thereof.

                                  ARTICLE VIII

              Consolidation, Merger, Conveyance, Transfer or Lease

     SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.

     The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an entirety
to the Company, unless:

     (a) if the Company shall consolidate with or merge into another Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, the entity formed by such consolidation or into which the Company
is merged or the Person that acquires by conveyance or transfer, or that leases,
the properties and assets of the Company substantially as an entirety shall be
an entity organized and existing under the laws of the United States of America
or any State or Territory thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest (including any
Additional Interest) on all the Securities and the performance of every covenant
of this Indenture on the part of the Company to be performed or observed;

     (b) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time, or both, would
constitute an Event of Default, shall have happened and be continuing; and

     (c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, any such supplemental indenture comply with this Article
VIII and that all conditions precedent herein provided for relating to such
transaction have been complied with; and the Trustee may rely upon such
Officers' Certificate and Opinion of Counsel as conclusive evidence that such
transaction complies with this Section 8.1.

                                       52
<PAGE>

     SECTION 8.2. Successor Company Substituted.

     (a) Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
8.1 and the execution and delivery to the Trustee of the supplemental indenture
described in Section 8.1(a), the successor entity formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein; and in the event of
any such conveyance or transfer, following the execution and delivery of such
supplemental indenture, the Company shall be discharged from all obligations and
covenants under the Indenture and the Securities. (b) Such successor Person may
cause to be executed, and may issue either in its own name or in the name of the
Company, any or all of the Securities issuable hereunder that theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor Person instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities that previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities that such successor Person thereafter shall
cause to be executed and delivered to the Trustee on its behalf. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture.

     (c) In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate to reflect such occurrence.

                                   ARTICLE IX

                             Supplemental Indentures

     SECTION 9.1. Supplemental Indentures without Consent of Holders.

     Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form reasonably satisfactory to
the Trustee, for any of the following purposes:

     (a) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein and in
the Securities; or

     (b) to cure any ambiguity, to correct or supplement any provision herein
that may be defective or inconsistent with any other provision herein, or to
make or amend any other provisions with respect to matters or questions arising
under this Indenture, which shall not be inconsistent with the other provisions
of this Indenture, provided, that such action pursuant to this clause (b) shall
not adversely affect in any material respect the interests of any Holders or the
holders of the Preferred Securities; or

                                       53
<PAGE>

     (c) to add to the covenants, restrictions or obligations of the Company or
to add to the Events of Default, provided, that such action pursuant to this
clause (c) shall not adversely affect in any material respect the interests of
any Holders or the holders of the Preferred Securities; or

     (d) to modify, eliminate or add to any provisions of the Indenture or the
Securities to such extent as shall be necessary to ensure that the Securities
are treated as indebtedness of the Company for United States Federal income tax
purposes, provided, that such action pursuant to this clause (d) shall not
adversely affect in any material respect the interests of any Holders or the
holders of the Preferred Securities.

     SECTION 9.2. Supplemental Indentures with Consent of Holders.

     (a) With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may 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
modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security,

          (i) change the Stated Maturity of the principal or any premium of any
     Security or change the date of payment of any installment of interest
     (including any Additional Interest) on any Security, or reduce the
     principal amount thereof or the rate of interest thereon or any premium
     payable upon the redemption thereof or change the place of payment where,
     or the coin or currency in which, any Security or interest thereon is
     payable, or restrict or impair the right to institute suit for the
     enforcement of any such payment on or after such date, or

          (ii) reduce the percentage in aggregate principal amount of the
     Outstanding Securities, the consent of whose Holders is required for any
     such supplemental indenture, or the consent of whose Holders is required
     for any waiver of compliance with any provision of this Indenture or of
     defaults hereunder and their consequences provided for in this Indenture,
     or

          (iii) modify any of the provisions of this Section 9.2, Section 5.13
     or Section 10.7, except to increase any percentage in aggregate principal
     amount of the Outstanding Securities, the consent of whose Holders is
     required for any reason, or to provide that certain other provisions of
     this Indenture cannot be modified or waived without the consent of the
     Holder of each Security;

provided, further, that, so long as any Preferred Securities remain outstanding,
no amendment under this Section 9.2 shall be effective until the holders of a
majority in Liquidation Amount of the Trust Securities shall have consented to
such amendment; provided, further, that if the consent of the Holder of each
Outstanding Security is required for any amendment under this Indenture, such
amendment shall not be effective until the holder of each Outstanding Trust
Security shall have consented to such amendment.

                                       54
<PAGE>

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

     SECTION 9.3. Execution of Supplemental Indentures.

     In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Trustee shall be entitled to receive, and
shall be fully protected in conclusively relying upon, an Officers' Certificate
and an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture, and that all conditions
precedent herein provided for relating to such action have been complied with.
The Trustee may, but shall not be obligated to, enter into any such supplemental
indenture that affects the Trustee's own rights, duties, indemnities or
immunities under this Indenture or otherwise. Copies of the final form of each
supplemental indenture shall be delivered by the Trustee at the expense of the
Company to each Holder, and, if the Trustee is the Property Trustee, to each
holder of Preferred Securities, promptly after the execution thereof.

     SECTION 9.4. Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture under this Article IX,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

     SECTION 9.5. Reference in Securities to Supplemental Indentures.

     Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.

                                    ARTICLE X

                                    Covenants

     SECTION 10.1. Payment of Principal, Premium and Interest.

     The Company covenants and agrees for the benefit of the Holders of the
Securities that it will duly and punctually pay the principal of and any premium
and interest (including any Additional Interest) on the Securities in accordance
with the terms of the Securities and this Indenture.

                                       55
<PAGE>

     SECTION 10.2. Money for Security Payments to be Held in Trust.

     (a) If the Company shall at any time act as its own Paying Agent with
respect to the Securities, it will, on or before each due date of the principal
of and any premium or interest (including any Additional Interest) on the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest
(including Additional Interest) so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided, and will promptly
notify the Trustee in writing of its failure so to act.

     (b) Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of or
any premium or interest (including any Additional Interest) on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided in the Trust Indenture Act and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its failure so to act.

     (c) The Company will cause each Paying Agent for the Securities other than
the Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 10.2, that such Paying Agent will (i) comply with the provisions of this
Indenture and the Trust Indenture Act applicable to it as a Paying Agent and
(ii) during the continuance of any default by the Company (or any other obligor
upon the Securities) in the making of any payment in respect of the Securities,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
held in trust by such Paying Agent for payment in respect of the Securities.

     (d) The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

     (e) Any money deposited with the Trustee or any Paying Agent, or then held
by the Company in trust for the payment of the principal of and any premium or
interest (including any Additional Interest) on any Security and remaining
unclaimed for two years after such principal and any premium or interest has
become due and payable shall (unless otherwise required by mandatory provision
of applicable escheat or abandoned or unclaimed property law) be paid on Company
Request to the Company, or (if then held by the Company) shall (unless otherwise
required by mandatory provision of applicable escheat or abandoned or unclaimed
property law) be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation

                                       56
<PAGE>

in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than thirty (30) days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

     SECTION 10.3. Statement as to Compliance.

     The Company shall deliver to the Trustee, within one hundred and twenty
(120) days after the end of each fiscal year of the Company ending after the
date hereof, an Officers' Certificate (substantially in the form attached hereto
as Exhibit B) covering the preceding fiscal year, stating whether or not to the
knowledge of the signers thereof the Company is in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder), and if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.

     SECTION 10.4. Calculation Agent.

     (a) The Company hereby agrees that for so long as any of the Securities
remain Outstanding, there will at all times be an agent appointed to calculate
LIBOR in respect of each Interest Payment Date in accordance with the terms of
Schedule A (the "Calculation Agent"). The Company has initially appointed the
Property Trustee as Calculation Agent for purposes of determining LIBOR for each
Interest Payment Date. The Calculation Agent may be removed by the Company at
any time. Except as described in the immediately preceding sentence, so long as
the Property Trustee holds any of the Securities, the Calculation Agent shall be
the Property Trustee. If the Calculation Agent is unable or unwilling to act as
such or is removed by the Company, the Company will promptly appoint as a
replacement Calculation Agent the London office of a leading bank which is
engaged in transactions in Eurodollar deposits in the international Eurodollar
market and which does not control or is not controlled by or under common
control with the Company or its Affiliates. The Calculation Agent may not resign
its duties without a successor having been duly appointed.

     (b) The Calculation Agent shall be required to agree that, as soon as
possible after 11:00 a.m. (London time) on each LIBOR Determination Date (as
defined in Schedule A), but in no event later than 11:00 a.m. (London time) on
the Business Day immediately following each LIBOR Determination Date, the
Calculation Agent will calculate the interest rate and dollar amount (rounded to
the nearest cent, with half a cent being rounded upwards) for the related
Interest Payment Date, and will communicate such rate and amount to the Company,
the Trustee, each Paying Agent and the Depositary. The Calculation Agent will
also specify to the Company the quotations upon which the foregoing rates and
amounts are based and, in any event, the Calculation Agent shall notify the
Company before 5:00 p.m. (London time) on each LIBOR Determination Date that
either: (i) it has determined or is in the process of determining the foregoing
rates and amounts or (ii) it has not determined and is not in the process of
determining the foregoing rates and amounts, together with its reasons therefor.
The Calculation Agent's determination of the foregoing rates and amounts for any
Interest Payment Date will (in the absence of manifest error) be final and
binding upon all parties. For the sole purpose of calculating the interest rate

                                       57
<PAGE>

for the Securities, "Business Day" shall be defined as any day on which dealings
in deposits in Dollars are transacted in the London interbank market.

     SECTION 10.5. Additional Tax Sums.

     So long as no Event of Default has occurred and is continuing, if (a) the
Trust is the Holder of all of the Outstanding Securities and (b) a Tax Event
described in clause (i) or (iii) in the definition of Tax Event in Section 1.1
hereof has occurred and is continuing, the Company shall pay to the Trust (and
its permitted successors or assigns under the related Trust Agreement) for so
long as the Trust (or its permitted successor or assignee) is the registered
holder of the Outstanding Securities, such amounts as may be necessary in order
that the amount of Distributions (including any Additional Interest Amount (as
defined in the Trust Agreement)) then due and payable by the Trust on the
Preferred Securities and Common Securities that at any time remain outstanding
in accordance with the terms thereof shall not be reduced as a result of any
Additional Taxes arising from such Tax Event (additional such amounts payable by
the Company to the Trust, the "Additional Tax Sums"). Whenever in this Indenture
or the Securities there is a reference in any context to the payment of
principal of or interest on the Securities, such mention shall be deemed to
include mention of the payments of the Additional Tax Sums provided for in this
Section 10.5 to the extent that, in such context, Additional Tax Sums are, were
or would be payable in respect thereof pursuant to the provisions of this
Section 10.5 and express mention of the payment of Additional Tax Sums (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Tax Sums in those provisions hereof where such express mention is not
made; provided, that the deferral of the payment of interest pursuant to Section
3.9 on the Securities shall not defer the payment of any Additional Tax Sums
that may be due and payable.

     SECTION 10.6. Additional Covenants.

     (a) The Company covenants and agrees with each Holder of Securities that if
an Event of Default shall have occurred and be continuing or the Company shall
have given notice of its election to begin an Extension Period with respect to
the Securities and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing, it shall not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's Equity Interests, (ii)
vote in favor of or permit or otherwise allow any of its Subsidiaries to declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to or otherwise retire, any of such
Subsidiary's Equity Interests entitling the holders thereof to a stated rate of
return, other than dividends or distributions on Equity Interests issued by any
Subsidiary solely payable to the Company or any Subsidiary thereof (for the
avoidance of doubt, whether such Equity Interests are perpetual or otherwise),
or (iii) make any payment of principal of or any interest or premium on or
repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Securities (other than
(A) repurchases, redemptions or other acquisitions of Equity Interests of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase or similar plan with respect to any Equity
Interests or in connection with the issuance of Equity Interests of the Company

                                       58
<PAGE>

(or securities convertible into or exercisable for such Equity Interests) as
consideration in an acquisition transaction entered into prior to the applicable
Event of Default or Extension Period, (B) as a result of an exchange or
conversion of any class or series of the Company's Equity Interests (or any
Equity Interests of a Subsidiary of the Company) for any class or series of the
Company's Equity Interests or of any class or series of the Company's
indebtedness for any class or series of the Company's Equity Interests, (C) the
purchase of fractional interests in Equity Interests of the Company pursuant to
the conversion or exchange provisions of such Equity Interests or the security
being converted or exchanged, (D) any declaration of a dividend in connection
with any Rights Plan, the issuance of rights, Equity Interests or other property
under any Rights Plan or the redemption or repurchase of rights pursuant
thereto, or (E) any dividend in the form of Equity Interests, warrants, options
or other rights where the dividend Equity Interests or the Equity Interests
issuable upon exercise of such warrants, options or other rights are the same
Equity Interests as those on which the dividend is being paid or rank pari passu
with or junior to such Equity Interests).

     (b) The Company also covenants with each Holder of Securities (i) to hold,
directly or indirectly, one hundred percent (100%) of the Common Securities of
the Trust, provided, that any permitted successor of the Company hereunder may
succeed to the Company's ownership of such Common Securities, (ii) as holder of
such Common Securities, not to voluntarily dissolve, wind-up or liquidate the
Trust other than (A) in connection with a distribution of the Securities to the
holders of the Preferred Securities in liquidation of the Trust or (B) in
connection with certain mergers, consolidations or amalgamations permitted by
the Trust Agreement and (iii) to use its reasonable commercial efforts,
consistent with the terms and provisions of the Trust Agreement, to cause the
Trust to continue to be taxable as a grantor trust and not as a corporation for
United States Federal income tax purposes.

     SECTION 10.7. Waiver of Covenants.

     The Company may omit in any particular instance to comply with any covenant
or condition contained in Section 10.6 if, before or after the time for such
compliance, the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities shall, by Act of such Holders, and at least a
majority of the aggregate Liquidation Amount of the Preferred Securities then
outstanding, by consent of such holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company in respect of any such covenant or condition shall
remain in full force and effect.

     SECTION 10.8. Treatment of Securities.

     The Company will treat the Securities as indebtedness, and the amounts
(other than payments of principal) payable in respect of the principal amount of
such Securities as interest, for all U.S. federal income tax purposes. All
payments in respect of the Securities will be made free and clear of U.S.
withholding tax to any beneficial owner thereof that has provided an Internal
Revenue Service Form W-9 or W-8BEN (or any substitute or successor form)
establishing its U.S. or non-U.S. status for U.S. federal income tax purposes.

                                       59
<PAGE>

                                   ARTICLE XI

                            Redemption of Securities

     SECTION 11.1. Optional Redemption.

     The Company may, at its option, on any Interest Payment Date, on or after
December 30, 2011, redeem the Securities in whole at any time or in part from
time to time, at a Redemption Price equal to one hundred percent (100%) of the
principal amount thereof (or of the redeemed portion thereof, as applicable),
together, in the case of any such redemption, with accrued interest, including
any Additional Interest, to but excluding the date fixed for redemption;
provided, that the Company shall have received the prior approval of the Federal
Reserve with respect to such redemption if then required.

     SECTION 11.2. Special Event Redemption.

     Upon the occurrence and during the continuation of a Special Event, the
Company may, at its option, redeem the Securities, in whole but not in part, at
a redemption price equal to one hundred (100%) percent of the principal amount
thereof, together, in the case of any such redemption, with accrued interest,
including any Additional Interest, to but excluding the date fixed for
redemption (the "Special Event Redemption Price"); provided, that the Company
shall have received the prior approval of the Federal Reserve with respect to
such redemption if then required.

     SECTION 11.3. Election to Redeem; Notice to Trustee.

     The election of the Company to redeem any Securities, in whole or in part,
shall be evidenced by or pursuant to a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, not less than
thirty (30) days and not more than sixty (60) days prior to the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee and the Property Trustee under the Trust Agreement in writing of such
date and of the principal amount of the Securities to be redeemed and provide
the additional information required to be included in the notice or notices
contemplated by Section 11.5. In the case of any redemption of Securities, in
whole or in part, (a) prior to the expiration of any restriction on such
redemption provided in this Indenture or the Securities or (b) pursuant to an
election of the Company which is subject to a condition specified in this
Indenture or the Securities, the Company shall furnish the Trustee with an
Officers' Certificate and an Opinion of Counsel evidencing compliance with such
restriction or condition.

     SECTION 11.4. Selection of Securities to be Redeemed.

     (a) If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected and redeemed on a pro rata basis not
more than sixty (60) days prior to the Redemption Date by the Trustee from the
Outstanding Securities not previously called for redemption, provided, that the
unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.

                                       60
<PAGE>

     (b) The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security that has been or is to be redeemed.

     (c) The provisions of paragraphs (a) and (b) of this Section 11.4 shall not
apply with respect to any redemption affecting only a single Security, whether
such Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

     SECTION 11.5. Notice of Redemption.

     (a) Notice of redemption shall be given not later than the thirtieth (30th)
day, and not earlier than the sixtieth (60th) day, prior to the Redemption Date
to each Holder of Securities to be redeemed, in whole or in part (unless a
shorter notice shall be satisfactory to the Property Trustee under the related
Trust Agreement).

     (b) With respect to Securities to be redeemed, in whole or in part, each
notice of redemption shall state:

          (i) the Redemption Date;

          (ii) the Redemption Price or, if the Redemption Price cannot be
     calculated prior to the time the notice is required to be sent, the
     estimate of the Redemption Price, as calculated by the Company, together
     with a statement that it is an estimate and that the actual Redemption
     Price will be calculated on the fifth Business Day prior to the Redemption
     Date (and if an estimate is provided, a further notice shall be sent of the
     actual Redemption Price on the date that such Redemption Price is
     calculated);

          (iii) if less than all Outstanding Securities are to be redeemed, the
     identification (and, in the case of partial redemption, the respective
     principal amounts) of the particular Securities to be redeemed;

          (iv) that on the Redemption Date, the Redemption Price will become due
     and payable upon each such Security or portion thereof, and that any
     interest (including any Additional Interest) on such Security or such
     portion, as the case may be, shall cease to accrue on and after said date;
     and

          (v) the place or places where such Securities are to be surrendered
     for payment of the Redemption Price.

     (c) Notice of redemption of Securities to be redeemed, in whole or in part,
at the election of the Company shall be given by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the Company
and shall be irrevocable. The notice if mailed in the manner provided above
shall be conclusively presumed to have been duly given, whether or not the

                                       61
<PAGE>

Holder receives such notice. In any case, a failure to give such notice by mail
or any defect in the notice to the Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.

     SECTION 11.6. Deposit of Redemption Price.

     Prior to 10:00 a.m., New York City time, on the Redemption Date specified
in the notice of redemption given as provided in Section 11.5, the Company will
deposit with the Trustee or with one or more Paying Agents (or if the Company is
acting as its own Paying Agent, the Company will segregate and hold in trust as
provided in Section 10.2) an amount of money sufficient to pay the Redemption
Price of, and any accrued interest (including any Additional Interest) on, all
the Securities (or portions thereof) that are to be redeemed on that date.

     SECTION 11.7. Payment of Securities Called for Redemption.

     (a) If any notice of redemption has been given as provided in Section 11.5,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment specified in
such notice, the Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable Redemption Price, together with
accrued interest (including any Additional Interest) to the Redemption Date.

     (b) Upon presentation of any Security redeemed in part only, the Company
shall execute and upon receipt thereof the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities, of authorized denominations, in aggregate principal amount equal to
the unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms.

     (c) If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and any premium on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.

                                  ARTICLE XII

                           Subordination of Securities

     SECTION 12.1. Securities Subordinate to Senior Debt.

     The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article XII, the payment of the
principal of and any premium and interest (including any Additional Interest) on
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all Senior Debt.

                                       62
<PAGE>

     SECTION 12.2. No Payment When Senior Debt in Default; Payment Over of
Proceeds Upon Dissolution, Etc.

     (a) In the event and during the continuation of any default by the Company
in the payment of any principal of or any premium or interest on any Senior Debt
(following any grace period, if applicable) when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by declaration
of acceleration or otherwise, then, upon written notice of such default to the
Company by the holders of such Senior Debt or any trustee therefor, unless and
until such default shall have been cured or waived or shall have ceased to
exist, no direct or indirect payment (in cash, property, securities, by set-off
or otherwise) shall be made or agreed to be made on account of the principal of
or any premium or interest (including any Additional Interest) on any of the
Securities, or in respect of any redemption, repayment, retirement, purchase or
other acquisition of any of the Securities.

     (b) In the event of a bankruptcy, insolvency or other proceeding described
in clause (d) or (e) of the definition of Event of Default (each such event, if
any, herein sometimes referred to as a "Proceeding"), all Senior Debt (including
any interest thereon accruing after the commencement of any such proceedings)
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made to any Holder of any of the
Securities on account thereof. Any payment or distribution, whether in cash,
securities or other property (other than securities of the Company or any other
entity provided for by a plan of reorganization or readjustment the payment of
which is subordinate, at least to the extent provided in these subordination
provisions with respect to the indebtedness evidenced by the Securities, to the
payment of all Senior Debt at the time outstanding and to any securities issued
in respect thereof under any such plan of reorganization or readjustment), which
would otherwise (but for these subordination provisions) be payable or
deliverable in respect of the Securities shall be paid or delivered directly to
the holders of Senior Debt in accordance with the priorities then existing among
such holders until all Senior Debt (including any interest thereon accruing
after the commencement of any Proceeding) shall have been paid in full.

     (c) In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Debt, the Holders of the Securities, together with the
holders of any obligations of the Company ranking on a parity with the
Securities, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
and premium, if any, and interest (including any Additional Interest) on the
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any Equity
Interests or any obligations of the Company ranking junior to the Securities and
such other obligations. If, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of the Company or any other entity
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Securities, to the payment of
all Senior Debt at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment) shall be received
by the Trustee or any Holder in contravention of any of the terms hereof and
before all Senior Debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Debt at the time outstanding in accordance with the priorities then existing

                                       63

<PAGE>

among such holders for application to the payment of all Senior Debt remaining
unpaid, to the extent necessary to pay all such Senior Debt (including any
interest thereon accruing after the commencement of any Proceeding) in full. In
the event of the failure of the Trustee or any Holder to endorse or assign any
such payment, distribution or security, each holder of Senior Debt is hereby
irrevocably authorized to endorse or assign the same.

     (d) The Trustee and the Holders, at the expense of the Company, shall take
such reasonable action (including the delivery of this Indenture to an agent for
any holders of Senior Debt or consent to the filing of a financing statement
with respect hereto) as may, in the opinion of counsel designated by the holders
of a majority in principal amount of the Senior Debt at the time outstanding, be
necessary or appropriate to assure the effectiveness of the subordination
effected by these provisions.

     (e) The provisions of this Section 12.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.

     (f) The securing of any obligations of the Company, otherwise ranking on a
parity with the Securities or ranking junior to the Securities, shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.

     SECTION 12.3. Payment Permitted If No Default.

     Nothing contained in this Article XII or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company, at any time, except during
the pendency of the conditions described in paragraph (a) of Section 12.2 or of
any Proceeding referred to in Section 12.2, from making payments at any time of
principal of and any premium or interest (including any Additional Interest) on
the Securities or (b) the application by the Trustee of any moneys deposited
with it hereunder to the payment of or on account of the principal of and any
premium or interest (including any Additional Interest) on the Securities or the
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge (in accordance with Section 12.8) that
such payment would have been prohibited by the provisions of this Article XII,
except as provided in Section 12.8.

     SECTION 12.4. Subrogation to Rights of Holders of Senior Debt.

     Subject to the payment in full of all amounts due or to become due on all
Senior Debt, or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, the Holders of
the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Debt pursuant to the provisions
of this Article XII (equally and ratably with the holders of all indebtedness of
the Company that by its express terms is subordinated to Senior Debt of the
Company to substantially the same extent as the Securities are subordinated to
the Senior Debt and is entitled to like rights of subrogation by reason of any
payments or distributions made to holders of such Senior Debt) to the rights of
the holders of such Senior Debt to receive payments and distributions of cash,

                                       64
<PAGE>

property and securities applicable to the Senior Debt until the principal of and
any premium and interest (including any Additional Interest) on the Securities
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article XII, and no payments made
pursuant to the provisions of this Article XII to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt, and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.

     SECTION 12.5. Provisions Solely to Define Relative Rights.

     The provisions of this Article XII are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article XII or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of and any
premium and interest (including any Additional Interest) on the Securities as
and when the same shall become due and payable in accordance with their terms,
(b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than their rights in relation to
the holders of Senior Debt or (c) prevent the Trustee or the Holder of any
Security (or to the extent expressly provided herein, the holder of any
Preferred Security) from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, including filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article XII
of the holders of Senior Debt to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.

     SECTION 12.6. Trustee to Effectuate Subordination.

     Each Holder of a Security by his or her acceptance thereof 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 provided in this
Article XII and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.

     SECTION 12.7. No Waiver of Subordination Provisions.

     (a) No right of any present or future holder of any Senior Debt 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 be
otherwise charged with.

     (b) Without in any way limiting the generality of paragraph (a) of this
Section 12.7, the holders of Senior Debt may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to such Holders of the Securities

                                       65
<PAGE>

and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of such Holders of the Securities to the
holders of Senior Debt, 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, Senior Debt, or otherwise amend or supplement in any manner Senior Debt
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding, (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt, (iii) release any Person
liable in any manner for the payment of Senior Debt and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.

     SECTION 12.8. Notice to Trustee.

     (a) The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article XII 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 to or by the Trustee
in respect of the Securities, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or a holder
of Senior Debt or from any trustee, agent or representative therefor; provided,
that if the Trustee shall not have received the notice provided for in this
Section 12.8 at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, the
payment of the principal of and any premium on or interest (including any
Additional Interest) on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.

     (b) The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or herself to be a holder of
Senior Debt (or a trustee, agent, representative or attorney-in-fact therefor)
to establish that such notice has been given by a holder of Senior Debt (or a
trustee, agent, representative or attorney-in-fact therefor). 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 Senior Debt to participate in
any payment or distribution pursuant to this Article XII, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt 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 XII, 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 12.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.

         Upon any payment or distribution of assets of the Company referred to
in this Article XII, the Trustee and the Holders of the Securities shall be
entitled to conclusively rely upon any order or decree entered by any court of
competent jurisdiction in which such Proceeding is pending, or a certificate of
the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee

                                       66
<PAGE>

for the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt 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
XII.

     SECTION 12.10. Trustee Not Fiduciary for Holders of Senior Debt.

     The Trustee, in its capacity as trustee under this Indenture, shall not owe
or be deemed to owe any fiduciary duty to the holders of Senior Debt and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article XII or otherwise.

     SECTION 12.11. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.

     The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XII with respect to any Senior Debt that may at any
time be held by it, to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder. With respect to the holders of Senior Debt of the Company, the Trustee
undertakes to perform only such of its obligations as are specifically set forth
in this Article XII, and no implied covenants or obligations with respect to the
holders of such Senior Debt shall be read into this Indenture against the
Trustee. Nothing in this Article XII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.6.

     SECTION 12.12. Article Applicable to Paying Agents.

     If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article XII shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XII in addition to or in place of the Trustee; provided,
that Sections 12.8 and 12.11 shall not apply to the Company or any Affiliate of
the Company if the Company or such Affiliate acts as Paying Agent.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed signature page of this Indenture by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.

                                       67

<PAGE>

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

                                         TEMECULA VALLEY BANCORP INC.

                                         By:   /s/ Stephen H. Wacknitz
                                               ----------------------------
                                               Stephen H. Wacknitz
                                               Chairman, Chief Executive Officer
                                               and President

                                         WILMINGTON TRUST COMPANY, not in its
                                         individual capcity, but soley as
                                         Trustee

                                         By:   /s/ W. T. Morris II
                                               ---------------------------------
                                               W. Thomas Morris, II
                                               Assistant Vice President

<PAGE>

                                                                      Schedule A

                             DETERMINATION OF LIBOR

     With respect to the Securities, the London interbank offered rate ("LIBOR")
shall be determined by the Calculation Agent in accordance with the following
provisions (in each case rounded to the nearest .000001%):

(1)      On the second LIBOR Business Day (as defined below) prior to an
Interest Payment Date (except, with respect to the first interest payment
period, on September 25, 2006 (each such day, a "LIBOR Determination Date"),
LIBOR for any given security shall, for the following interest payment period,
equal the rate, as obtained by the Calculation Agent from Bloomberg Financial
Markets Commodities News, for three-month U.S. Dollar deposits in Europe, which
appears on Dow Jones Telerate Page 3750 (as defined in the International Swaps
and Derivatives Association, Inc. 1991 Interest Rate and Currency Exchange
Definitions), or such other page as may replace such Page 3750, as of 11:00 a.m.
(London time) on such LIBOR Determination Date.

(2)      If, on any LIBOR Determination Date, such rate does not appear on Dow
Jones Telerate Page 3750 or such other page as may replace such Page 3750, the
Calculation Agent shall determine the arithmetic mean of the offered quotations
of the Reference Banks (as defined below) to leading banks in the London
interbank market for three-month U.S. Dollar deposits in Europe in an amount
determined by the Calculation Agent by reference to requests for quotations as
of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made
by the Calculation Agent to the Reference Banks. If, on any LIBOR Determination
Date, at least two of the Reference Banks provide such quotations, LIBOR shall
equal such arithmetic mean of such quotations. If, on any LIBOR Determination
Date, only one or none of the Reference Banks provide such quotations, LIBOR
shall be deemed to be the arithmetic mean of the offered quotations that leading
banks in the City of New York selected by the Calculation Agent are quoting on
the relevant LIBOR Determination Date for three-month U.S. Dollar deposits in
Europe in an amount determined by the Calculation Agent by reference to the
principal London offices of leading banks in the London interbank market;
provided that, if the Calculation Agent is required but is unable to determine a
rate in accordance with at least one of the procedures provided above, LIBOR
shall be LIBOR as determined on the previous LIBOR Determination Date.

(3)      As used herein: "Reference Banks" means four major banks in the London
interbank market selected by the Calculation Agent; and "LIBOR Business Day"
means a day on which commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) in London.

                                  Schedule A-1

<PAGE>

                                                                       Exhibit A

                     Form of Financial Officer's Certificate

         The undersigned, the [Chief Financial Officer] [Treasurer] [Assistant
Treasurer] hereby certifies, pursuant to Section 7.3(b) of the Junior
Subordinated Indenture, dated as of September 27, 2006, between Temecula Valley
Bancorp Inc. (the "Company") and Wilmington Trust Company, as trustee, that, as
of _______, 20__, the Company had the following ratios and balances:

BANK HOLDING COMPANY
As of [Quarterly Financial Dates]

Tier 1 Risk Weighted Assets                                                    %
                                                                     ----------
Ratio of Double Leverage                                                       %
                                                                     ----------
Non-Performing Assets to Loans and OREO                                        %
                                                                     ----------
Tangible Common Equity as a Percentage of Tangible Assets                      %
                                                                     ----------
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                                                     %
                                                                     ----------
Double Leverage (exclude trust preferred as equity)                            %
                                                                     ----------
Total Assets                                                       $
                                                                     ----------
Year to Date Income                                                $
                                                                     ----------

* A table describing the quarterly report calculation procedures is attached.

[FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash
flows, and notes thereto, together with the report of the independent
accountants thereon) of the Company and its consolidated subsidiaries for the
three years ended _______, 20___.]

[FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income
statement) of the Company and its consolidated subsidiaries for the fiscal
quarter and [six/nine] month period ended _______, 20___.]

The financial statements fairly present in all material respects, in accordance
with U.S. generally accepted accounting principles ("GAAP"), the financial
position of the Company and its consolidated subsidiaries, and the results of

                                   Exhibit A-1

<PAGE>

operations and changes in financial condition as of the date, and for the [___
quarter interim] [annual] period ended _______, 20__, and such financial
statements have been prepared in accordance with GAAP consistently applied
throughout the period involved (except as otherwise noted therein).

     IN WITNESS WHEREOF, the undersigned has executed this Financial Officer's
Certificate as of this _____ day of _____________, 20__

                                     -------------------------------------------
                                     Name:
                                     Title:

                                     Temecula Valley Bancorp Inc.
                                     27710 Jefferson Avenue #A100
                                     Temecula, CA 92590
                                     Tel: (951) 506-1050

                                   Exhibit A-2

<PAGE>

<TABLE>
<CAPTION>
                              Financial Definitions

----------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                      <C>
   Report Item         Corresponding FRY-9C or LP Line Items with Line Item            Description of Calculation
                                     corresponding Schedules
----------------------------------------------------------------------------------------------------------------------
Tier 1 Risk            BHCK7206                                                 Tier 1 Risk Ratio: Core Capital
Weighted Assets        Schedule HC-R                                            (Tier 1)/ Risk-Adjusted Assets
----------------------------------------------------------------------------------------------------------------------
Ratio of Double        (BHCP0365)/(BCHCP3210)                                   Total equity investments in
Leverage               Schedule PC in the LP                                    subsidiaries divided by the total
                                                                                equity capital. This field is
                                                                                calculated at the parent company
                                                                                level. "Subsidiaries" include bank,
                                                                                bank holding company, and non-bank
                                                                                subsidiaries.
----------------------------------------------------------------------------------------------------------------------
Non-Performing Assets  (BHCK5525-BHCK3506+BHCK5526-                             Total Nonperforming Assets
to Loans and OREO      BHCK3507+BHCK2744/(BHCK2122+BHCK2744)                    (NPLs+Foreclosed Real Estate+Other
                       Schedules HC-C, HC-M & HC-N                              Nonaccrual & Repossessed
                                                                                Assets)/Total Loans+Foreclosed Real
                                                                                Estate
----------------------------------------------------------------------------------------------------------------------
Tangible Common        (BHDM3210-BHCK3163)/(BHCK2170-BHCK3163)                  (Equity Capital - Goodwill)/(Total
Equity as a                                                                     Assets - Goodwill)
Percentage of          Schedule HC
Tangible Assets
----------------------------------------------------------------------------------------------------------------------
Ratio of Reserves to   (BHCK3123+BHCK3128)/(BHCK5525-                           Total Loan Loss and Allocated
Non-Performing Loans   BHCK3506+BHCK5526-BHCK3507)                              Transfer Risk Reserves/ Total
                                                                                Nonperforming Loans
                       Schedules HC & HC-N & HC-R                               (Nonaccrual + Restructured)
----------------------------------------------------------------------------------------------------------------------
Ratio of Net           (BHCK4635-BHCK4605)/(BHCK3516)                           Net charge offs for the period as a
Charge-Offs to Loans                                                            percentage of average loans.
                       Schedules HI-B & HC-K
----------------------------------------------------------------------------------------------------------------------
Return on Average      (BHCK4340/BHCK3368)                                      Net Income as a percentage of Assets.
Assets (annualized)
                       Schedules HI & HC-K
----------------------------------------------------------------------------------------------------------------------
Net Interest Margin    (BHCK4519/(BHCK3515+BHCK3365+BHCK3516+                   (Net Interest Income Fully Taxable
(annualized)           BHCK3401+BHCKB985)                                       Equivalent, if available/Average
                                                                                Earning Assets)
                       Schedules HI Memorandum and HC-K
----------------------------------------------------------------------------------------------------------------------
Efficiency Ratio       (BHCK4093)/(BHCK4519+BHCK4079)                           (Non-interest Expense)/(Net Interest
                                                                                Income Fully Taxable Equivalent, if
                       Schedule HI                                              available, plus Non-interest Income)
----------------------------------------------------------------------------------------------------------------------
Ratio of Loans to      (BHCKB528+BHCK5369)/(BHCK2170)                           Total Loans & Leases (Net of
Assets                                                                          Unearned Income & Gross of
                       Schedule HC                                              Reserve)/Total Assets
----------------------------------------------------------------------------------------------------------------------
Ratio of Loans to      (BHCKB528+BHCK5369)/(BHDM6631+BHDM6636+                  Total Loans & Leases (Net of
Deposits               BHFN6631+BHFN6636)                                       Unearned Income & Gross of
                                                                                Reserve)/Total Deposits (Includes
                       Schedule HC                                              Domestic and Foreign Deposits)
----------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
   Report Item         Corresponding FRY-9C or LP Line Items with Line Item            Description of Calculation
                                     corresponding Schedules
----------------------------------------------------------------------------------------------------------------------
<S>                    <C>                                                      <C>
Total Assets           (BHCK2170)                                               The sum of total assets. Includes
                                                                                cash and balances due from
                       Schedule HC                                              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             (BHCK4300)                                               The sum of income (loss) before
                                                                                extraordinary items and other
                       Schedule HI                                              adjustments and extraordinary items;
                                                                                and other adjustments, net of income
                                                                                taxes.
----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       2

<PAGE>

                                                                       Exhibit B

                                     FORM OF
                              OFFICERS' CERTIFICATE
                                      UNDER
                                  SECTION 10.3

     Pursuant to Section 10.3 of the Junior Subordinated Indenture, dated as
of September 27, 2006 (as amended or supplemented from time to time, the
"Indenture"), between Temecula Valley Bancorp Inc., as issuer (the "Company"),
and Wilmington Trust Company, as trustee, each of the undersigned hereby
certifies that, to the knowledge of the undersigned, the Company is not in
default in the performance or observance of any of the terms, provisions or
conditions contained in the Indenture (without regard to any period of grace or
requirement of notice provided under the Indenture), for the fiscal year ending
on ________, 20__ [, except as follows: specify each such default and the nature
and status thereof].

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

     IN WITNESS WHEREOF, the undersigned have executed this Officers'
Certificate as of ___________, 20__.

                               -------------------------------------------------
                               Name:

                               Title: [Must be the Chairman of the Board,
                                      a Vice Chairman of the Board, the
                                      Chief Executive Officer, the
                                      President, or a Vice President] of
                                      Temecula Valley Bancorp Inc.

                               -------------------------------------------------
                               Name:
                               Title: [Must be the Chief Financial Officer,
                                      the Treasurer, an Assistant Treasurer,
                                      the Secretary or an Assistant
                                      Secretary] of Temecula Valley Bancorp Inc.Exhibit 10.46

                               PURCHASE AGREEMENT

                                      AMONG

                          TEMECULA VALLEY BANCORP INC.,

                        TEMECULA VALLEY STATUTORY TRUST V

                                       AND

                                   TWE, LTD.,

                                  AS PURCHASER

                                ----------------

                         Dated as of September 27, 2006

                                ----------------

<PAGE>

                               PURCHASE AGREEMENT
                    ($12,000,000 TRUST PREFERRED SECURITIES)

     THIS  PURCHASE  AGREEMENT,  dated as of September 27, 2006, is entered into
among,  Temecula Valley Bancorp Inc., a California  corporation (the "Company"),
Temecula Valley Statutory Trust V, a Delaware statutory trust (the "Trust," and,
together with the Company,  the "Sellers"),  and TWE, Ltd., an exempted  company
incorporated  under  the laws of the  Cayman  Islands  (including  any  assignee
thereof, the "Purchaser").

                                   WITNESSETH:

     WHEREAS,  the  Sellers  propose  to issue  and sell  12,000  Floating  Rate
Preferred  Securities of the Trust, having a stated liquidation amount of $1,000
per preferred  security,  bearing a variable  rate of interest per annum,  reset
quarterly,  equal to LIBOR (as defined in the Indenture (as defined below)) plus
1.60% (the "Preferred Securities");

     WHEREAS, the entire proceeds from the sale of the Preferred Securities will
be combined  with the entire  proceeds from the sale by the Trust to the Company
of its common  securities  (the  "Common  Securities"),  and will be used by the
Trust to  purchase  $12,372,000  in  principal  amount of the  unsecured  junior
subordinated notes of the Company (the "Junior Subordinated Notes");

     WHEREAS,  the Preferred  Securities and the Common  Securities of the Trust
will be issued  pursuant to the Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of the Closing Date (as defined below), among the Company,
as depositor,  Wilmington Trust Company,  as property trustee (in such capacity,
the  "Property  Trustee"),  and as  Delaware  trustee  (in  such  capacity,  the
"Delaware  Trustee"),   the  Administrative  Trustees  named  therein  (in  such
capacities, the "Administrative Trustees"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust;

     WHEREAS,  the  Preferred  Securities  will  be  fully  and  unconditionally
guaranteed on a subordinated  basis by the Company with respect to distributions
and amounts payable upon liquidation,  redemption or repayment (the "Guarantee")
pursuant and subject to the Guarantee Agreement (the "Guarantee Agreement"),  to
be dated as of the Closing Date and  executed  and  delivered by the Company and
Wilmington Trust Company,  as guarantee trustee (the "Guarantee  Trustee"),  for
the benefit from time to time of the holders of the Preferred Securities; and

     WHEREAS,  the Junior Subordinated Notes will be issued pursuant to a Junior
Subordinated Indenture, dated as of the Closing Date (the "Indenture"),  between
the  Company,  and  Wilmington  Trust  Company,  as  indenture  trustee (in such
capacity, the "Indenture Trustee").

     NOW,  THEREFORE,  in consideration of the mutual  agreements and subject to
the terms and conditions herein set forth, the parties hereto agree as follows:

          Section  1.  Definitions.   The  Preferred   Securities,   the  Common
Securities and the Junior Subordinated Notes are collectively referred to herein
as  the  "Securities."  This  Purchase  Agreement,   the  Indenture,  the  Trust
Agreement,  the Guarantee Agreement and the Securities are collectively referred
to herein as the "Operative Documents." All other capitalized terms used but not

                                       2
<PAGE>

defined in this Purchase  Agreement shall have the meanings  ascribed thereto in
the Indenture.

          Section 2. Purchase and Sale of the Preferred Securities.

          2.1   The Sellers  agree to sell to the Purchaser,  and the  Purchaser
agrees to purchase from the Sellers,  the Preferred  Securities for an aggregate
amount (the  "Purchase  Price") equal to  $12,000,000.  In  connection  with the
purchase  of the  Preferred  Securities,  the  Company  shall  pay no fee to its
introducing agent (the  "Introducing  Agent") for services rendered (the "Fee").
The Purchaser  shall be responsible for the following  expenses:  (i) any rating
agency costs and expenses,  and (ii) the Fee payable to the  Introducing  Agent;
provided that the  Introducing  Agent has an agreement with the  Purchaser;  but
shall  not be  responsible  for any fees and  expenses  set  forth in  Section 7
hereof,  unless  otherwise  provided  therein.  The Trust shall use the Purchase
Price,  together  with the proceeds from the sale of the Common  Securities,  to
purchase the Junior Subordinated Notes.

          2.2   Delivery   or  transfer of,  and   payment  for,  the  Preferred
Securities  shall be made at 11:00 A.M.  New York City time,  on  September  27,
2006,  or such later date (not later than  October 27,  2006) as the parties may
designate  (such  date  and  time of  delivery  and  payment  for the  Preferred
Securities  being herein called the "Closing  Date").  On the Closing Date,  the
Preferred Securities shall be transferred and delivered to the Purchaser, or its
designee,  against the payment of the Purchase Price to the Sellers made by wire
transfer in immediately  available funds to a U.S. account designated in writing
by the Company.

          2.3   Delivery of the  Preferred  Securities  shall  be  made  at such
location, and in such names and denominations,  as the Purchaser shall designate
in advance of the  Closing  Date.  The  Company  and the Trust agree to have the
Preferred  Securities  available for inspection and checking by the Purchaser in
New York,  New York, not later than 2:00 P.M. New York time, on the business day
prior  to the  Closing  Date.  The  closing  for the  purchase  and  sale of the
Preferred  Securities shall occur at the offices of Thacher Proffitt & Wood LLP,
Two World Financial Center, New York, New York 10281, or such other place as the
parties hereto shall agree.

          2.4   The Preferred Securities shall be sold by the Trust, directly or
indirectly,  to the  Purchaser  without  registration  of  any of the  Preferred
Securities,  the Junior  Subordinated Notes under the Securities Act of 1933, as
amended (the  "Securities  Act"),  or any other  applicable  securities  laws in
reliance upon  exemptions from the  registration  requirements of the Securities
Act and other  applicable  securities  laws.  The Sellers and the Purchaser have
entered  into  this  Agreement  to set  forth  their  understanding  as to their
relationship and their respective rights, duties and obligations.

          2.5   Upon original issuance  thereof,  the Preferred  Securities  and
Junior  Subordinated  Notes certificates shall each contain a legend as required
pursuant to any of the Operative  Documents,  including  without  limitation,  a
legend stating that the offer,  sale or transfer of the Preferred  Securities or
the Junior  Subordinated Notes, as the case may be, will be made only (a) to the
issuer  thereof,  (b) to a person that the  transferor  reasonably  believe is a
"qualified  institutional  buyer" (as defined in Rule 144A under the  Securities

                                       3
<PAGE>

Act) in a  transaction  meeting  the  requirements  of Rule  144A,  or (c) to an
institutional  "accredited investor" within the meaning of subparagraph (a) (1),
(2),  (3) or (7) of Rule 501  under the  Securities  Act that is  acquiring  the
Preferred  Securities or the Junior  Subordinated Notes, as the case may be, for
its own  account,  or for the  account  of such an  "accredited  investor,"  for
investment  purposes and not with a view to, or for offer or sale in  connection
with, any distribution  thereof in violation of the Securities Act, in each case
in accordance  with any  applicable  securities  laws of any state of the United
States or any  other  applicable  jurisdiction  and,  in the case of (c)  above,
subject to the right of the Trust and/or the Company, as applicable,  to require
an opinion of counsel and other information satisfactory to each of them.

          Section 3.   Closing Conditions. The  obligations of the parties under
this Agreement on the Closing Date are subject to the following conditions:

          3.1   Accuracy of Representations and Warranties.  The representations
and warranties  contained in this  Agreement,  and the statements of the Sellers
made in any certificates pursuant to this Agreement, shall be accurate as of the
date of delivery of the Preferred Securities.

          3.2   Opinions  of  Counsel. On  the Closing Date, the Purchaser shall
have received the following  favorable opinions or certificate,  as the case may
be, each dated as of the Closing  Date:  (a) from  Thacher  Proffitt & Wood LLP,
special   counsel  for  the   Purchaser   and  addressed  to  the  Purchaser  in
substantially the form set forth on Exhibit A-1 attached hereto and incorporated
herein by this reference, (b) an opinion from McAndrews, Allen & Matson, counsel
for the Sellers,  addressed to the Purchaser in substantially the form set forth
on Exhibit A-2 attached hereto and  incorporated  herein by this reference,  (c)
from  Thacher  Proffitt & Wood LLP,  special tax counsel for the  Purchaser  and
addressed to the  Purchaser in  substantially  the form set forth on Exhibit A-3
attached  hereto and  incorporated  herein by this  reference,  (d) from Morris,
James,  Hitchens  &  Williams  LLP,  special  Delaware  counsel to the Trust and
addressed to the Purchaser and the Sellers,  in substantially the form set forth
on Exhibit A-4 attached hereto and  incorporated  herein by this reference,  and
(e) from  Morris,  James,  Hitchens  &  Williams  LLP,  special  counsel  to the
Indenture Trustee,  the Property Trustee, the Delaware Trustee and the Guarantee
Trustee and  addressed to the Purchaser and the Sellers,  in  substantially  the
form set forth on Exhibit A-5 attached  hereto and  incorporated  herein by this
reference.  Each  certificate or opinion  addressed to the Purchaser shall state
that the first  entity,  if any,  to which the  Purchaser  transfers  any of the
Preferred  Securities,  and, if such transferee is a warehouse entity,  the next
subsequent  transferee  that is not a  warehouse  entity  (each,  a  "Subsequent
Purchaser") shall be entitled to rely on such opinion.

          3.3   Officer's Certificate. The Company  shall have  furnished to the
Purchaser a certificate of the Company,  signed by its Chief Executive  Officer,
President or an Executive  Vice  President and by the Chief  Financial  Officer,
Treasurer  or  Assistant  Treasurer  of the  Company,  and the Trust  shall have
furnished  to  the  Purchaser  a  certificate   of  the  Trust,   signed  by  an
Administrative  Trustee of the Trust,  in each case dated the Closing Date, and,
in the case of the Company,  as to 3.3.1 and 3.3.2 below and, in the case of the
Trust, as to 3.3.1 below:

     3.3.1 the  representations  and  warranties in this  Agreement are true and
correct  on and as of the  Closing  Date with the same  effect as if made on the

                                       4
<PAGE>

Closing  Date,  and the  Company  and  the  Trust  have  complied  with  all the
agreements  and  satisfied  all the  conditions  on either  of their  part to be
performed or satisfied at or prior to the Closing Date; and

     3.3.2  since  the date of the  Interim  Financial  Statements  (as  defined
below), there has been no material adverse change in the condition (financial or
other),  earnings,  business,  prospects  or  assets  of  the  Company  and  its
subsidiaries,  taken  as a  whole,  whether  or not  arising  from  transactions
occurring in the ordinary course of business.

          3.4   No Subsequent  Change.  Subsequent  to  the  execution  of  this
Agreement,  there shall not have been any change, or any development involving a
prospective  change,  in  or  affecting  the  condition  (financial  or  other),
earnings,  business,  prospects  or assets of the Company and its  subsidiaries,
whether or not occurring in the ordinary course of business, the effect of which
is,  in the  Purchaser's  judgment,  so  material  and  adverse  as to  make  it
impractical  or  inadvisable  to  proceed  with the  purchase  of the  Preferred
Securities.

          3.5   Purchase  Permitted  by  Applicable Laws; Legal  Investment. The
purchase  of and payment  for the  Preferred  Securities  as  described  in this
Agreement  shall (a) not be prohibited  by any  applicable  law or  governmental
regulation,  (b) not subject the Purchaser to any penalty or, in the  reasonable
judgment of the  Purchaser,  other onerous  conditions  under or pursuant to any
applicable law or governmental regulation,  and (c) be permitted by the laws and
regulations of the jurisdictions to which the Purchaser is subject.

          3.6   Consents and  Permits.  The  Company  and the Trust  shall  have
received  all  consents,  permits  and other  authorizations,  and made all such
filings and declarations,  as may be required from any person or entity pursuant
to any law, statute,  regulation or rule (federal, state, local and foreign), or
pursuant to any agreement,  order or decree to which the Company or the Trust is
a party or to which  either is  subject,  in  connection  with the  transactions
contemplated by this Agreement.

          3.7   Information. Prior to or on the Closing Date,  the Sellers shall
have  furnished  to the  Purchaser  and its counsel  such  further  information,
certificates,  opinions  and  documents  as the  Purchaser  or its  counsel  may
reasonably request.

     Each  certificate  signed by any trustee of the Trust or any officer of the
Company and  delivered to the  Purchaser or its counsel in  connection  with the
Operative  Documents and the transactions  contemplated hereby and thereby shall
be deemed to be a  representation  and warranty of the Trust and/or the Company,
as the  case  may be,  and not by such  trustee  or  officer  in any  individual
capacity.

          Section 4.  Representations and Warranties of the Sellers. The Sellers
jointly and  severally  represent  and warrant to the  Purchaser  as of the date
hereof and as of the Closing Date as follows:

          4.1   Securities Laws Matters:

          (a)   Neither the Company nor the Trust, nor any of their "Affiliates"
(as defined in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person acting on any of their behalf  (except for the  Introducing

                                       5
<PAGE>

Agent,  as to which  neither the Company nor the Trust make any  representation)
has, directly or indirectly,  made offers or sales of any security, or solicited
offers  to  buy  any  security,  under  circumstances  that  would  require  the
registration under the Securities Act of any of the Securities.

          (b)   Neither  the Company nor the Trust, nor any of their Affiliates,
nor any person  acting on its or their behalf  (except for the Purchaser and the
Introducing  Agent,  as to which  neither  the  Company  nor the Trust  make any
representation)  has (i) offered for sale or  solicited  offers to purchase  the
Securities,  (ii)  engaged  in any  form  of  general  solicitation  or  general
advertising (within the meaning of Regulation D) in connection with any offer or
sale  of any of the  Securities,  or  (iii)  engaged  in any  "directed  selling
efforts"   within  the  meaning  of  Regulation  S  under  the   Securities  Act
("Regulation S") with respect to the Securities.

          (c)  The Securities (i) are not and have not been listed on a national
securities exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or quoted on a U.S. automated interdealer
quotation  system  and  (ii) are not of an  open-end  investment  company,  unit
investment trust or face-amount certificate company that are, or are required to
be, registered under Section 8 of the Investment Company Act of 1940, as amended
(the  "Investment  Company  Act"),  and the  Securities  otherwise  satisfy  the
eligibility   requirements  of  Rule  144A(d)(3)  promulgated  pursuant  to  the
Securities Act ("Rule 144A(d)(3)").

          (d)   Neither the Company nor the Trust is, and, immediately following
consummation of the transactions  contemplated hereby and the application of the
net  proceeds  therefrom,  neither  the  Company  nor  the  Trust  will  be,  an
"investment  company" or an entity  "controlled" by an "investment  company," in
each case within the meaning of Section 3(a) of the Investment Company Act.

          (e)   Neither the Company nor  the Trust  has paid or agreed to pay to
any person or entity, directly or indirectly, any fees or other compensation for
soliciting another to purchase any of the Securities,  except for the Fee and/or
any other fee payable to the Company's  Introducing Agent;  provided,  that such
Introducing Agent has an agreement with the Purchaser.

          4.2   Standing and Qualification of the Trust. The Trust has been duly
created and is validly  existing in good standing as a statutory trust under the
Delaware Statutory Trust Act, 12 Del. C. ss.3801,  et seq. (the "Statutory Trust
Act") with all requisite  power and authority to own property and to conduct the
business it transacts and proposes to transact and to enter into and perform its
obligations  under the Operative  Documents to which it is a party. The Trust is
duly qualified to transact  business as a foreign entity and is in good standing
in each jurisdiction in which such qualification is necessary,  except where the
failure to so qualify or be in good standing  would not have a material  adverse
effect on the condition (financial or otherwise),  earnings, business, prospects
or assets of the  Trust,  whether or not  occurring  in the  ordinary  course of
business.  The Trust is not a party to, or  otherwise  bound by,  any  agreement
other than the  Operative  Documents.  The Trust is, and under  current law will
continue to be,  classified  for federal  income tax purposes as a grantor trust
and  not  as  an  association  or  publicly  traded  partnership  taxable  as  a
corporation.

                                       6
<PAGE>

          4.3   Trust Agreement. The Trust Agreement has been duly authorized by
the Company  and, on the Closing Date  specified in Section 2.2,  will have been
duly  executed and delivered by the Company and the  Administrative  Trustees of
the Trust,  and,  assuming  due  authorization,  execution  and  delivery by the
Property Trustee and the Delaware  Trustee,  will be a legal,  valid and binding
obligation of the Company and the Administrative  Trustees,  enforceable against
them in accordance with its terms, subject to applicable bankruptcy,  insolvency
and similar laws affecting creditors' rights generally and to general principles
of equity.  Each of the  Administrative  Trustees of the Trust is an employee of
the  Company  or one of its  subsidiaries  and has been duly  authorized  by the
Company to execute and  deliver the Trust  Agreement.  To the  knowledge  of the
Company and the Trust,  the Trust is not in  violation  of any  provision of the
Statutory Trust Act.

          4.4   Guarantee Agreement  and the Indenture. The  Guarantee Agreement
and the Indenture  have been duly  authorized by the Company and, on the Closing
Date, will have been duly executed and delivered by the Company,  and,  assuming
due authorization,  execution and delivery by the Guarantee Trustee, in the case
of the  Guarantee,  and by the Indenture  Trustee in the case of the  Indenture,
will be a legal, valid and binding obligation of the Company enforceable against
it in accordance with its terms,  subject to applicable  bankruptcy,  insolvency
and similar laws affecting creditors' rights generally and to general principles
of equity.

          4.5   Preferred  Securities  and  Common  Securities.   The  Preferred
Securities and the Common Securities have been duly authorized by the Trust and,
when issued and delivered  against  payment  therefor on the Closing Date to the
Purchaser  in  accordance  with  this  Agreement,  in the case of the  Preferred
Securities,  and to  the  Company  in  accordance  with  the  Common  Securities
Subscription  Agreement  between  the  Company  and the  Trust,  dated as of the
Closing  Date,  in the case of the Common  Securities,  will be validly  issued,
fully paid and nonassessable and will represent undivided  beneficial  interests
in the assets of the Trust  entitled  to the  benefits  of the Trust  Agreement,
enforceable  against  the Trust in  accordance  with  their  terms,  subject  to
applicable  bankruptcy,  insolvency and similar laws affecting creditors' rights
generally and to general principles of equity. The issuance of the Securities is
not subject to preemptive or other similar  rights.  On the Closing Date, all of
the issued and  outstanding  Common  Securities  will be  directly  owned by the
Company free and clear of any pledge,  security  interest,  claim, lien or other
encumbrance (each, a "Lien").

          4.6   Junior  Subordinated  Notes.  The Junior Subordinated Notes have
been duly  authorized  by the Company and, on the Closing  Date,  will have been
duly  executed and  delivered to the  Indenture  Trustee for  authentication  in
accordance with the Indenture and, when authenticated in the manner provided for
in the  Indenture  and  delivered  to the  Trust  against  payment  therefor  in
accordance with the Junior Subordinated Note Subscription  Agreement between the
Company and the Trust,  dated as of the Closing  Date,  will  constitute  legal,
valid and binding  obligations  of the Company  entitled to the  benefits of the
Indenture  enforceable  against  the  Company in  accordance  with their  terms,
subject  to  applicable  bankruptcy,   insolvency  and  similar  laws  affecting
creditors' rights generally and to general principles of equity.

          4.7   Purchase Agreement.  This  Agreement  has been duly  authorized,
executed and delivered by the Company and the Trust and  constitutes  the legal,

                                       7
<PAGE>

valid and binding obligation of the Company and the Trust,  enforceable  against
the Company and the Trust in  accordance  with its terms,  subject to applicable
bankruptcy,  insolvency and similar laws affecting  creditors'  rights generally
and to general principles of equity.

          4.8   Defaults. Neither the  issue and  sale of the Common Securities,
the Preferred  Securities or the Junior  Subordinated Notes, nor the purchase of
the Junior  Subordinated  Notes by the Trust,  the execution and delivery of and
compliance  with the  Operative  Documents  by the Company or the Trust,  to the
extent a party thereto, the consummation of the transactions contemplated herein
or therein,  or the use of the proceeds  therefrom,  (i) will  conflict  with or
constitute a breach of, or a default under,  the Trust  Agreement or the charter
or bylaws of the Company or any subsidiary of the Company or any applicable law,
statute,  rule, regulation,  judgment,  order, writ or decree of any government,
governmental authority, agency or instrumentality or court, domestic or foreign,
having jurisdiction over the Trust or the Company or any of its subsidiaries, or
their respective properties or assets (collectively,  "Governmental  Entities"),
(ii) will  conflict with or constitute a violation or breach of, or a default or
Repayment  Event  (as  defined  below)  under,  or  result  in the  creation  or
imposition of any Lien upon any property or assets of the Trust,  the Company or
any of its  subsidiaries  pursuant to any contract,  indenture,  mortgage,  loan
agreement,  note, lease or other agreement or instrument to which (A) the Trust,
the Company or any of its  subsidiaries is a party or by which it or any of them
may be bound, or (B) any of the property or assets of any of them is subject, or
any judgment,  order or decree of any court,  Governmental Entity or arbitrator,
except,  in the  case  of  this  clause  (ii),  for  such  conflicts,  breaches,
violations,  defaults,  Repayment  Events (as defined  below) or Liens which (X)
would not, singly or in the aggregate,  adversely affect the consummation of the
transactions  contemplated by the Operative  Documents and (Y) would not, singly
or in the aggregate,  have a material adverse effect on the condition (financial
or otherwise), earnings, business, liabilities, prospects and assets (taken as a
whole) or business  prospects  of the Company  and its  subsidiaries  taken as a
whole,  whether or not occurring in the ordinary course of business (a "Material
Adverse Effect") or (iii) require the consent, approval,  authorization or order
of any court or Governmental  Entity.  As used herein, a "Repayment Event" means
any event or  condition  which gives the holder of any note,  debenture or other
evidence of  indebtedness  (or any person  acting on such  holder's  behalf) the
right to require the repurchase,  redemption or repayment of all or a portion of
such  indebtedness by the Trust or the Company or any of its subsidiaries  prior
to its scheduled maturity.

          4.9   Organization, Standing and  Qualification  of the  Company.  The
Company has been duly  incorporated  and is validly existing as a corporation in
good standing under the laws of California,  with all requisite  corporate power
and authority to own,  lease and operate its properties and conduct the business
it  transacts  and  proposes  to  transact,  and is duly  qualified  to transact
business and is in good standing as a foreign  corporation in each  jurisdiction
where the nature of its activities requires such qualification, except where the
failure of the Company to be so qualified would not, singly or in the aggregate,
have a Material Adverse Effect.

          4.10  Subsidiaries of the Company.  The Company  has  no  subsidiaries
that are material to its business,  financial  condition or earnings  other than
those  subsidiaries  listed in  Schedule I  attached  hereto  (the  "Significant
Subsidiaries").  Each  Significant  Subsidiary  has been duly  organized  and is
validly  existing and in good  standing  under the laws of the  jurisdiction  in
which it is chartered or organized,  with all  requisite  power and authority to
own its  properties  and  conduct  the  business it  transacts  and  proposes to

                                       8
<PAGE>

transact. Each Significant Subsidiary is duly qualified to transact business and
is in good standing as a foreign entity in each jurisdiction where the nature of
its activities requires such qualification, except where the failure of any such
Significant Subsidiary to be so qualified would not, singly or in the aggregate,
have a Material Adverse Effect.

          4.11  Government Licenses;  Laws.  Each of the Trust,  the Company and
each of its subsidiaries hold all necessary approvals,  authorizations,  orders,
licenses, certificates and permits (collectively,  "Government Licenses") of and
from Governmental  Entities necessary to conduct its respective  business as now
being conducted,  and neither the Trust, the Company nor any of its subsidiaries
has  received  any  notice  of   proceedings   relating  to  the  revocation  or
modification of any such Government  License,  except where the failure to be so
licensed  or  approved  or the  receipt of an  unfavorable  decision,  ruling or
finding, would not, singly or in the aggregate,  have a Material Adverse Effect;
all of the  Government  Licenses are valid and in full force and effect,  except
where the  invalidity or the failure of such  Government  Licenses to be in full
force and effect, would not, singly or in the aggregate, have a Material Adverse
Effect;  and the  Company  and  its  subsidiaries  are in  compliance  with  all
applicable laws, rules,  regulations,  judgments,  orders, decrees and consents,
except  where  the  failure  to be in  compliance  would  not,  singly or in the
aggregate, have a Material Adverse Effect.

          4.12  Stock. All of the issued and outstanding shares of capital stock
of the Company and each of its subsidiaries  are validly issued,  fully paid and
nonassessable;  all  of  the  issued  and  outstanding  capital  stock  of  each
subsidiary  of  the  Company  is  owned  by the  Company,  directly  or  through
subsidiaries,  free and clear of any Lien, claim or equitable right; and none of
the issued and  outstanding  capital stock of the Company or any  subsidiary was
issued in violation of any  preemptive or similar rights arising by operation of
law, under the charter or by-laws of such entity or under any agreement to which
the Company or any of its subsidiaries is a party.

          4.13  Property. Each of the Trust,  the Company and each subsidiary of
the  Company has good and  marketable  title to all of its  respective  real and
personal  properties,  in each case  free and  clear of all  Liens and  defects,
except for those that would  not,  singly or in the  aggregate,  have a Material
Adverse Effect;  and all of the leases and subleases under which the Trust,  the
Company or any subsidiary of the Company holds  properties are in full force and
effect,  except  where the  failure of such leases and  subleases  to be in full
force and effect would not, singly or in the aggregate,  have a Material Adverse
Effect and none of the Trust,  the Company or any  subsidiary of the Company has
any notice of any claim of any sort that has been asserted by anyone  adverse to
the rights of the Trust,  the Company or any subsidiary of the Company under any
such leases or subleases,  or affecting or questioning the rights of such entity
to the continued  possession of the leased or subleased  premises under any such
lease or  sublease,  except for such  claims  that  would not,  singly or in the
aggregate, have a Material Adverse Effect.

          4.14  Conflicts, Authorizations and Approvals. Neither the Company nor
any of its subsidiaries is (i) in violation of its respective charter, bylaws or
similar  organizational  documents  or (ii) in  default  in the  performance  or
observance of any obligation,  agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument  to which either the Company or any such  subsidiary is a party or by

                                       9
<PAGE>

which it or any of them may be bound or to which any of the  property  or assets
of any of them is  subject,  except,  in the case of  clause  (ii),  where  such
default would not, singly or in the aggregate,  have a Material  Adverse Effect.
No  filing  with,  or  authorization,   approval,   consent,   license,   order,
registration,  qualification or decree of, any Governmental  Entity,  other than
those  that  have  been made or  obtained,  is  necessary  or  required  for the
performance by the Trust or the Company of their  respective  obligations  under
the Operative Documents, as applicable, or the consummation by the Trust and the
Company of the transactions contemplated by the Operative Documents.

          4.15  Holding Company Registration and Deposit Insurance.  The Company
is duly  registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended (the "Bank Holding Company Act"), and the regulations of the
Board of Governors of the Federal  Reserve System (the "Federal  Reserve"),  and
the deposit  accounts of the Company's  subsidiary  depository  institutions are
insured by the Federal  Deposit  Insurance  Corporation  ("FDIC") to the fullest
extent  permitted  by law and the rules  and  regulations  of the  FDIC,  and no
proceeding for the termination of such insurance is pending or, to the knowledge
of the Company or the Trust after due inquiry, threatened.

          4.16  Financial Statements.

          (a)   The audited  consolidated  financial  statements  (including the
notes thereto) and schedules of the Company and its consolidated subsidiaries at
and for  the  three  fiscal  years  ended  December  31,  2005  (the  "Financial
Statements") and the interim unaudited  consolidated financial statements of the
Company and its  consolidated  subsidiaries at and for the six months ended June
30, 2006 (the "Interim Financial  Statements") provided to the Purchaser are the
most recently available audited and unaudited  consolidated financial statements
of the  Company  and its  consolidated  subsidiaries,  respectively,  and fairly
present in all material  respects,  in accordance with U.S.  generally  accepted
accounting  principles  ("GAAP"),  the financial position of the Company and its
consolidated  subsidiaries,  and  the  results  of  operations  and  changes  in
financial  condition  as of the dates  and for the  periods  therein  specified,
subject, in the case of Interim Financial  Statements,  to year-end  adjustments
(which are expected to consist  solely of normal  recurring  adjustments).  Such
consolidated financial statements and schedules have been prepared in accordance
with GAAP  consistently  applied  throughout  the  periods  involved  (except as
otherwise noted therein).

          (b)   The Company's  report  on  FRY-9C,  dated  June  30,  2006  (the
"FRY-9C"), provided to the Purchaser is the most recently available such report,
and the  information  therein  fairly  presents  in all  material  respects  the
financial  position of the Company and its subsidiaries.  None of the Company or
any  of  its  subsidiaries  has  been  requested  by a  Governmental  Entity  to
republish, restate or refile any regulatory or financial report.

          (c)   Since  the  respective  dates  of  the  Financial Statements and
Interim Financial Statements and the FRY-9C, there has not been (A) any material
adverse  change or  development  with  respect to the  condition  (financial  or
otherwise),  earnings, business, assets or business prospects of the Company and
its  subsidiaries,  taken as a whole,  whether or not  occurring in the ordinary
course of business or (B) any  dividend or  distribution  of any kind  declared,
paid or made by the Company on any class of its capital stock other than regular
quarterly dividends on the Company's common stock.

                                       10
<PAGE>

          (d)   The accountants  of the  Company  who  certified  the  Financial
Statements  are   independent   public   accountants  of  the  Company  and  its
subsidiaries  within  the  meaning  of the  Securities  Act  and the  rules  and
regulations of the Securities and Exchange Commission ("SEC") thereunder.

          4.17  Regulatory  Enforcement Matters.  None of the Trust, the Company
nor any of its subsidiaries,  nor any of their respective  officers,  directors,
employees  or  representatives,  is subject or is party to, or has  received any
notice  from any  Regulatory  Agency (as  defined  below)  that any of them will
become   subject  or  party  to  any   investigation   with   respect   to,  any
cease-and-desist  order, agreement,  civil monetary penalty,  consent agreement,
memorandum of understanding or other regulatory  enforcement action,  proceeding
or  order  with  or by,  or is a  party  to any  commitment  letter  or  similar
undertaking  to, or is subject to any  directive  by, or has been a recipient of
any supervisory letter from, or has adopted any board resolutions at the request
or  suggestion  of, any  Regulatory  Agency  that,  in any such case,  currently
restricts in any material  respect the conduct of their  business or that in any
material manner relates to their capital adequacy,  their credit policies, their
management or their business (each, a "Regulatory  Action"),  nor has the Trust,
the Company or any of its  subsidiaries  been advised by any  Regulatory  Agency
that it is considering  issuing or requesting any such  Regulatory  Action;  and
there is no  unresolved  violation,  criticism or  exception  by any  Regulatory
Agency with respect to any report or statement  relating to any  examinations of
the Trust, the Company or any of its subsidiaries,  except where such unresolved
violation,  criticism or exception would not, singly or in the aggregate, have a
Material  Adverse  Effect.  If the  Company is a bank  holding  company  that is
subject to the Bank Holding Company Act, it is a "well-run" bank holding company
that  satisfies the criteria of the Federal  Reserve's  regulations at 12 C.F.R.
ss.225.14(c).   Each  of  the  Company's   subsidiaries  that  is  a  depository
institution,   the   accounts   of  which  are   insured  by  the  FDIC  (i)  is
"well-capitalized"  within the  meaning  of 12 U.S.C.  ss.1831o  and  applicable
implementing regulations thereunder;  and (ii) is not, and has not been notified
by any Regulatory Agency that it is, in "troubled  condition" within the meaning
of 12 U.S.C. ss.1831i and applicable  implementing  regulations  thereunder.  As
used  herein,  the term  "Regulatory  Agency"  means any federal or state agency
charged with the supervision or regulation of depositary institutions or holding
companies of depositary institutions,  or engaged in the insurance of depositary
institution deposits, or any court, administrative agency or commission or other
governmental  agency,   authority  or  instrumentality   having  supervisory  or
regulatory  authority  with  respect  to the  Trust,  the  Company or any of its
subsidiaries.

          4.18  No Undisclosed  Liabilities. None of the Trust,  the Company nor
any of its  subsidiaries has any material  liability,  whether known or unknown,
whether asserted or unasserted,  whether absolute or contingent, whether accrued
or unaccrued,  whether liquidated or unliquidated,  and whether due or to become
due,  including  any  liability for taxes (and there is no past or present fact,
situation,  circumstance,  condition  or other  basis for any  present or future
action, suit, proceeding,  hearing, charge,  complaint,  claim or demand against
the  Company or its  subsidiaries  that could give rise to any such  liability),
except for (i) liabilities set forth in the Financial  Statements or the Interim
Financial  Statements  and  (ii)  normal  fluctuations  in  the  amount  of  the
liabilities  referred to in clause (i) above occurring in the ordinary course of
business of the Trust, the Company and all of its subsidiaries since the date of
the most recent balance sheet included in such Financial Statements.

                                       11
<PAGE>

          4.19  Litigation. There is no action,  suit or proceeding before or by
any Governmental Entity,  arbitrator or court,  domestic or foreign, now pending
or, to the  knowledge of the Company or the Trust after due inquiry,  threatened
against or affecting the Trust or the Company or any of its subsidiaries, except
for such actions, suits or proceedings that, if adversely determined, would not,
singly  or  in  the  aggregate,   adversely   affect  the  consummation  of  the
transactions  contemplated by the Operative Documents or have a Material Adverse
Effect;  and the aggregate of all pending legal or  governmental  proceedings to
which the Trust or the Company or any of its subsidiaries is a party or of which
any of their  respective  properties  or assets is subject,  including  ordinary
routine litigation  incidental to the business,  are not expected to result in a
Material Adverse Effect.

          4.20  No Labor Disputes.  No labor  dispute with the  employees of the
Trust, the Company or any of its subsidiaries exists or, to the knowledge of the
executive officers of the Trust or the Company, is imminent,  except those which
would not, singly or in the aggregate, have a Material Adverse Effect.

          4.21  Filings with  the SEC. The  documents of the  Company filed with
the SEC in accordance with the Exchange Act, from and including the commencement
of the fiscal year covered by the  Company's  most recent  Annual Report on Form
10-K,  at the time they were or hereafter  are filed by the Company with the SEC
(collectively, the "1934 Act Reports"), complied and will comply in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the SEC  thereunder  (the "1934 Act  Regulations"),  and did not, and, at the
date of this  Agreement  and on the Closing Date, do not and will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein,  in the light of
the  circumstances  under which they were made, not  misleading;  and other than
such  instruments,  agreements,  contracts  and other  documents as are filed as
exhibits to the Company's Annual Report on Form 10-K,  Quarterly Reports on Form
10-Q or  Current  Reports  on Form 8-K,  there are no  instruments,  agreements,
contracts or documents of a character  described in Item 601 of  Regulation  S-K
promulgated  by the SEC to which the  Company  or any of its  subsidiaries  is a
party. The Company is in compliance with all currently  applicable  requirements
of the  Exchange  Act and the  1934  Act  Regulations  that  were  added  by the
Sarbanes-Oxley Act of 2002.

          4.22  Deferral of Interest Payments on Junior Subordinated  Notes. The
Company has no present  intention  to exercise  its option to defer  payments of
interest on the Junior  Subordinated  Notes as provided  in the  Indenture.  The
Company  believes that the likelihood that it would exercise its rights to defer
payments  of  interest  on the  Junior  Subordinated  Notes as  provided  in the
Indenture at any time during which the Junior Subordinated Notes 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,
acquire or make a  liquidation  payment  with  respect to, any of the  Company's
capital  stock and on the  Company's  ability to make any payments of principal,
interest  or  premium  on,  or  repay,  repurchase  or  redeem,  any of its debt
securities  that rank pari passu in all  respects  with or junior in interest to
the Junior Subordinated Notes.

          4.23 Tax Returns. The Company and each of the Significant Subsidiaries
have timely and duly filed all Tax Returns  (defined below) required to be filed

                                       12
<PAGE>

by them, and all such Tax Returns are true, correct and complete in all material
respects.  The Company and each of the Significant  Subsidiaries have timely and
duly paid in full all material Taxes required to be paid by them (whether or not
such amounts are shown as due on any Tax Return).  There are no federal,  state,
or other Tax audits or deficiency  assessments  proposed or pending with respect
to the  Company or any of the  Significant  Subsidiaries,  and no such audits or
assessments are threatened.  As used herein, the terms "Tax" or "Taxes" mean (i)
all federal, state, local, and foreign taxes, and other assessments of a similar
nature  (whether  imposed  directly  or  through  withholding),   including  any
interest,  additions to tax, or  penalties  applicable  thereto,  imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts arising
as a result of being a member of any affiliated, consolidated, combined, unitary
or similar  group,  as a successor  to another  person or by  contract.  As used
herein, the term "Tax Returns" means all federal,  state, local, and foreign Tax
returns,  declarations,  statements,  reports, schedules, forms, and information
returns  and any  amendments  thereto  filed or  required  to be filed  with any
Governmental Entity.

          4.24  Taxes. The Trust is not subject to United States  federal income
tax with respect to income received or accrued on the Junior Subordinated Notes,
interest payable by the Company on the Junior  Subordinated  Notes is deductible
by the  Company,  in whole or in part,  for  United  States  federal  income tax
purposes,  and the Trust is not,  or will not be within  ninety (90) days of the
date hereof,  subject to more than a de minimis amount of other taxes, duties or
other  governmental  charges.  There are no  rulemaking  or similar  proceedings
before the United States Internal Revenue Service or comparable federal,  state,
local or foreign  government  bodies which  involve or affect the Company or any
subsidiary, which, if the subject of an action unfavorable to the Company or any
subsidiary, could result in a Material Adverse Effect.

          4.25  Books  and Records.  The  books,  records and  accounts  of  the
Company  and its  subsidiaries  accurately  and fairly  reflect,  in  reasonable
detail, the transactions in, and dispositions of, the assets of, and the results
of operations of, the Company and its subsidiaries.  The Company and each of its
subsidiaries  maintains a system of internal  accounting  controls sufficient to
provide  reasonable  assurances that (i) transactions are executed in accordance
with  management's  general or specific  authorizations,  (ii)  transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
accordance  with GAAP and to  maintain  asset  accountability,  (iii)  access to
assets is permitted  only in accordance  with  management's  general or specific
authorization and (iv) the recorded  accountability  for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

          4.26  Insurance.  The Company  and the  Significant  Subsidiaries  are
insured by insurers of recognized financial  responsibility  against such losses
and risks and in such amounts in all material  respects as are  customary in the
businesses in which they are engaged or propose to engage after giving effect to
the transactions  contemplated  hereby,  including,  but not limited to, real or
personal  property owned or leased against theft,  damage,  destruction,  act of
vandalism  and all other risks  customarily  insured  against.  All  policies of
insurance  and  fidelity  or surety  bonds  insuring  the  Company or any of the
Significant Subsidiaries,  the Company's or Significant Subsidiaries' respective
businesses,  assets,  employees,  officers and  directors  are in full force and
effect.  The Company and each of the Significant  Subsidiaries are in compliance
with the  terms of such  policies  and  instruments  in all  material  respects.

                                       13
<PAGE>

Neither the Company nor any Significant Subsidiary has reason to believe that it
will not be able to renew  its  existing  insurance  coverage  as and when  such
coverage  expires or to obtain similar  coverage from similar insurers as may be
necessary  to  continue  its  business  at a cost that would not have a Material
Adverse  Effect.  Within the past  twelve  months,  neither  the Company nor any
Significant  Subsidiary  has been  denied any  insurance  coverage  which it has
sought or for which it has applied.

          4.27  Corporate Funds.  The Company and its subsidiaries or any person
acting  on  behalf  of the  Company  and  its  subsidiaries  including,  without
limitation,  any  director,  officer,  agent or employee  of, the Company or its
subsidiaries  has not,  directly or  indirectly,  while  acting on behalf of the
Company  and  its  subsidiaries  (i)  used  any  corporate  funds  for  unlawful
contributions,  gifts,  entertainment  or other  unlawful  expenses  relating to
political  activity;  (ii) made any  unlawful  payment to  foreign  or  domestic
government officials or employees or to foreign or domestic political parties or
campaigns  from  corporate  funds;  (iii)  violated any provision of the Foreign
Corrupt  Practices  Act of 1977,  as  amended;  or (iv) made any other  unlawful
payment.

          4.28  OSHA Compliance. Neither the Company nor any of its subsidiaries
is in  violation  of  any  federal  or  state  law  or  regulation  relating  to
occupational  safety  and  health  and the  Company  and its  subsidiaries  have
received  all  permits,  licenses  or other  approvals  required  of them  under
applicable  federal and state  occupational  safety and health and environmental
laws and regulations to conduct their respective businesses, and the Company and
each of its  subsidiaries  is in compliance with all terms and conditions of any
such  permit,  license  or  approval,  except  any  such  violation  of  law  or
regulation,  failure to receive required permits, licenses or other approvals or
failure to comply with the terms and  conditions  of such  permits,  licenses or
approvals  which  would  not,  singly or in the  aggregate  result in a Material
Adverse Effect.

          4.29  Information.  The  information  provided  by the Company and the
Trust pursuant to this Agreement does not, as of the date hereof,  and will not,
as of the Closing Date,  contain any untrue statement of a material fact or omit
to state any material  fact  necessary to make the  statements  therein,  in the
light of the circumstances under which they were made, not misleading.

          Section  5.  Representations  and  Warranties  of the  Purchaser.  The
Purchaser represents and warrants to, and agrees with, the Company and the Trust
as follows:

          5.1   The Purchaser understands  and  acknowledges  that the Preferred
Securities,  the Junior  Subordinated  Notes and the Guarantee (i) have not been
registered  under the Securities  Act, or any other  applicable  securities law,
(ii) are being offered for sale by the Trust or the Company, as the case may be,
in transactions  not requiring  registration  under the Securities Act and (iii)
may not be offered,  sold,  pledged or otherwise  transferred  by the  Purchaser
except in compliance with the registration requirements of the Securities Act or
any other applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.

          5.2   The Purchaser is purchasing the Preferred Securities for its own
account  and not with a view to, or for offer or sale in  connection  with,  any

                                       14
<PAGE>

distribution  thereof in violation  of the  Securities  Act or other  applicable
securities  laws,  subject to any requirement of law that the disposition of its
property be at all times within its control and subject to its ability to resell
such Preferred Securities pursuant to an effective  registration statement under
the Securities Act or under Rule 144A or any other  exemption from  registration
available under the Securities Act or any other  applicable  securities law. The
Purchaser  understands  that no public  market  exists for any of the  Preferred
Securities, and that it is unlikely that a public market will ever exist for the
Preferred Securities.

          5.3   The Purchaser  represents and warrants that (a) it has consulted
with  its own  legal,  regulatory,  tax,  business,  investment,  financial  and
accounting  advisers  in  connection  herewith  to  the  extent  it  has  deemed
necessary;  (b) it has had a  reasonable  opportunity  to ask  questions  of and
receive  answers from  officers and  representatives  of the Sellers  concerning
their respective  financial condition and results of operations and the purchase
of the Preferred  Securities  and any such  questions  have been answered to its
satisfaction;  (c) it has had the  opportunity to review all publicly  available
records and filings  concerning  the Sellers and it has carefully  reviewed such
records and filings that it considers relevant to making an investment decision;
and (d) it has made its own  investment  decisions  based upon its own judgment,
due diligence  and advice from such advisers as it has deemed  necessary and not
upon any view expressed by the Sellers.

          5.4   The  Purchaser  is (i) an  institutional  "accredited  investor"
within  the  meaning  of  subparagraph  (a)(1),  (2),  (3) or (7) of Rule 501 of
Regulation  D under the  Securities  Act,  and (ii) a  "qualified  institutional
buyer" within the meaning of Rule 144A under the Securities Act.

          Section 6.  Covenants of the Sellers.  The Sellers  covenant and agree
with the Purchaser as follows:

          6.1   Compliance  with  Representations  and  Warranties.  During  the
period from the date of this  Agreement to the Closing  Date,  the Sellers shall
use their best  efforts and take all action  necessary or  appropriate  to cause
their representations and warranties contained in Section 4 hereof to be true as
of the Closing Date,  after giving effect to the  transactions  contemplated  by
this Agreement, as if made on and as of the Closing Date.

          6.2   Sale and Registration of Securities. Neither the Company nor the
Trust will, nor will either of them permit any of their  Affiliates to, nor will
any of them  permit any person  acting on its or their  behalf  (other  than the
Introducing Agent and its affiliates) to, directly or indirectly, (i) resell any
Preferred  Securities that have been acquired by any of them,  (ii) sell,  offer
for sale or  solicit  offers to buy or  otherwise  negotiate  in  respect of any
security (as defined in the  Securities  Act) that would or could be  integrated
with the sale of the  Preferred  Securities in any manner that would require the
registration of the Securities  under the Securities Act or (iii) make offers or
sales of any such Security,  or solicit  offers to buy any such Security,  under
any circumstances  that would require the registration of any of such Securities
under the Securities Act.

          6.3  Clearing and Settlement. The Company and the Trust will cooperate
with the  Purchaser  (or any  holder of the  Preferred  Securities)  and use all

                                       15
<PAGE>

commercially  reasonable efforts to make the Preferred  Securities  eligible for
clearance and settlement as book-entry  securities through the facilities of the
Depository  Trust  Company  ("DTC")  and listed for  trading  through the PORTAL
Market ("PORTAL"), and will execute, deliver and comply with all representations
made to, and  agreements  with,  DTC and PORTAL.  This  Section 6.3 will survive
delivery of and payment for the Preferred Securities.

          6.4   Integration. Neither the  Company nor the Trust will,  until one
hundred  eighty (180) days following the Closing Date,  without the  Purchaser's
prior  written  consent,  offer,  sell,  contract  to sell,  grant any option to
purchase or otherwise  dispose of,  directly or  indirectly,  (i) any  Preferred
Securities or other  securities of the Trust other than as  contemplated by this
Agreement or (ii) any other  securities  convertible  into,  or  exercisable  or
exchangeable for, any Preferred Securities or other securities of the Trust.

          6.5   Qualification  of Securities.  The  Company  and the Trust  will
arrange for the  qualification  of the Preferred  Securities  for sale under the
laws of such jurisdictions as the Purchaser may designate and will maintain such
qualifications  in  effect  so long as  required  for the sale of the  Preferred
Securities.  The Company or the Trust,  as the case may be, will promptly advise
the Purchaser of the receipt by the Company or the Trust, as the case may be, of
any  notification  with respect to the  suspension of the  qualification  of the
Preferred  Securities  for  sale  in  any  jurisdiction  or  the  initiation  or
threatening of any proceeding for such purpose.

          6.6   Use of Proceeds.  The Trust shall use the proceeds from the sale
of the  Preferred  Securities  and the Common  Securities to purchase the Junior
Subordinated Notes from the Company.

          6.7   Investment Company.  So  long  as  any  of  the  Securities  are
outstanding,  (i) the  Securities  shall not be listed on a national  securities
exchange  registered  under  Section 6 of the  Exchange  Act or quoted in a U.S.
automated  interdealer  quotation system, (ii) neither the Company nor the Trust
shall be an open-end  investment  company,  unit investment trust or face-amount
certificate company that is, or is required to be, registered under Section 8 of
the Investment  Company Act, and, the  Securities  shall  otherwise  satisfy the
eligibility  requirements  of Rule  144A(d)(3) and (iii) neither the Company nor
the Trust shall  engage,  or permit any  subsidiary  to engage,  in any activity
which would cause it or any subsidiary to be an  "investment  company" under the
provisions of the Investment Company Act.

          6.8   Solicitation  and Advertising. Neither the Company nor the Trust
will,  nor will  either of them  permit  any of their  Affiliates  or any person
acting on their behalf (other than the Introducing Agent and its affiliates), to
(i) engage in any "directed  selling efforts" within the meaning of Regulation S
under the Securities Act or (ii) engage in any form of "general  solicitation or
general advertising" (within the meaning of Regulation D) in connection with any
offer or sale of any of the Securities.

          6.9  Compliance with Rule 144A(d)(4) under the Securities Act. So long
as any of the Securities are outstanding and are "restricted  securities" within
the meaning of Rule 144(a)(3) under the Securities Act, the Sellers will, during
any period in which they are not subject to and in compliance with Section 13 or
15(d) of the  Exchange  Act, or the  Sellers are not exempt from such  reporting

                                       16
<PAGE>

requirements  pursuant  to and in  compliance  with  Rule  12g3-2(b)  under  the
Exchange Act,  provide to each holder of such restricted  securities and to each
prospective  purchaser  (as  designated  by  such  holder)  of  such  restricted
securities,  upon  the  request  of such  holder  or  prospective  purchaser  in
connection with any proposed transfer,  any information  required to be provided
by Rule  144A(d)(4)  under the Securities  Act, if applicable.  The  information
provided  by the  Sellers  pursuant  to this  Section  6.9 will not, at the date
thereof,  contain any untrue  statement of a material  fact or omit to state any
material  fact  necessary  to make  the  statements  therein,  in  light  of the
circumstances under which they were made, not misleading. If the Company and the
Trust are required to register  under the Exchange  Act,  such reports  filed in
compliance  with Rule  12g3-2(b)  shall be  sufficient  information  as required
above.  This  covenant is intended to be for the benefit of the  Purchaser,  the
holders of the  Securities,  and the prospective  purchasers  designated by such
holders, from time to time, of the Securities.

          6.10  Reports.

          (i)  The Company shall furnish to (i) the Purchaser and any subsequent
holder  of the  Securities,  and (ii)  any  beneficial  owner of the  Securities
reasonably identified to the Company (which identification may be made by either
such  beneficial  owner  or  by  the  Purchaser)   (collectively,   the  "Report
Recipients"),  a duly  completed and executed  certificate  in the form attached
hereto as Exhibit B,  including  the  financial  statements  referenced  in such
Exhibit, which certificate and financial statements shall be so furnished by the
Company or the Trust not later than  forty-five  (45) days after the end of each
of the first  three  fiscal  quarters of each fiscal year of the Company and not
later than ninety (90) days after the end of each fiscal year of the Company. If
the Company intends to file its annual and quarterly information with the SEC in
electronic  form  pursuant  to  Regulation  S T  of  the  Commission  using  the
Commissioner's  Electronic  Data  Gathering,  Analysis and  Retrieval  ("EDGAR")
system,  the Company shall notify the Report Recipients in the manner prescribed
herein of each such  annual and  quarterly  filing.  The Report  Recipients  are
hereby  authorized  and  directed  to access the EDGAR  system for  purposes  of
retrieving the financial  information so filed. The Report Recipients shall have
no duty to search for or obtain any electronic or other filings that the Company
makes with the  Commission,  regardless  of whether such  filings are  periodic,
supplemental or otherwise. Delivery of reports, information and documents to the
Report Recipients  pursuant to this Section 6.10 shall be solely for purposes of
compliance  with this Section  6.10,  and only those  reports,  information  and
documents  timely  filed  shall  be  considered   compliant  with  the  delivery
requirements of this Section 6.10. A Report Recipient's receipt of such reports,
information  and  documents  shall not  constitute  notice to it of the  content
thereof or any matter  determinable  from the  content  thereof,  including  the
Company's compliance with any of its covenants hereunder.

          (ii)  The Report Recipients agree to hold all information contained in
any  financial  statements  provided to them pursuant to this Section 6.10 which
are not filed with or furnished  to the  Commission  through  EDGAR or otherwise
made publicly available by the Company ("Confidential Financial Statements"), in
confidence  and will not directly or indirectly,  transfer,  publish or disclose
any such  information,  to any other person or entity  without the prior written
consent of the Company,  except and only to the extent as may be required by law
or judicial process (in which case the Report Recipients shall provide notice of
such compelled disclosure to the Company prior to (or, in the case of an on-site
governmental  authority or agency  examination,  to the extent practicable) such
disclosure);  provided that the Report Recipients shall be permitted to use such

                                       17
<PAGE>

information  for the purpose of preparing and disclosing  aggregate  information
that is not specific to the Company. The Company agrees to promptly provide such
Confidential  Financial  Statements to a prospective  purchaser of the Preferred
Securities  who  expressly  agrees  (orally  or  in  writing)  to  maintain  its
confidentiality.   The  Company   shall  place  a   conspicuous   legend  as  to
confidentiality  on  any  Confidential   Financial   Statements  made  available
hereunder.

          Section 7.  Payment of  Expenses.  The Company  hereby  covenants  and
agrees that it shall pay or cause to be paid (directly or by reimbursement)  all
costs and expenses incident to the performance of the obligations of the Sellers
under this Agreement,  whether or not the transactions  contemplated  herein are
consummated  or this  Agreement  is  terminated,  including  (i) all  costs  and
expenses  incident  to the  authorization,  issuance,  sale and  delivery of the
Preferred  Securities  and any taxes payable in connection  therewith;  (ii) the
fees and expenses of qualifying  the Preferred  Securities  under the securities
laws of the several jurisdictions as provided in Section 6.5; (iii) the fees and
expenses  of the  counsel,  the  accountants  and any other  experts or advisors
retained by the Company or the Trust,  which counsel fees and expenses  incurred
in connection with the closing of the transactions  contemplated  hereby,  in an
amount up to $10,000,  shall be reimbursed by the Purchaser on the Closing Date;
and; (iv) the fees and all  reasonable  expenses of the Guarantee  Trustee,  the
Property  Trustee,  the Delaware  Trustee,  the Indenture  Trustee and any other
trustee or paying agent appointed under the Operative Documents, except that any
acceptance fee and annual  administrative  fees of any such trustee and the fees
and  disbursements  of counsel to such trustees  incurred in connection with the
closing of the transactions  contemplated  hereby shall be paid by the Purchaser
on the Closing Date.

                                       18
<PAGE>

          Section 8. Indemnification & Contribution.

          8.1   Indemnification.

     8.1.1 The Company and the Trust agree  jointly and  severally  to indemnify
and hold harmless the  Purchaser,  a Subsequent  Purchaser and their  respective
affiliates  (collectively,   the  "Indemnified  Parties")  and  the  Indemnified
Parties' respective  directors,  officers,  employees and agents and each person
who  "controls"  the  Indemnified  Parties  within  the  meaning  of either  the
Securities Act or the Exchange Act against any and all losses,  claims,  damages
or  liabilities,  joint  or  several,  to which  they or any of them may  become
subject  under the  Securities  Act, the Exchange Act or other  federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims,  damages or liabilities (or actions in respect  thereof) arise out of or
are based  upon (i) any  untrue  statement  or  alleged  untrue  statement  of a
material  fact  contained  in any  information  or  documents  furnished or made
available to the Purchaser by or on behalf of the Company,  (ii) the omission or
alleged  omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,  or (iii) the breach
or alleged breach of any representation,  warranty or agreement of either Seller
contained  herein,  and agrees to  reimburse  each such  Indemnified  Party,  as
incurred,  for any  legal  or  other  expenses  reasonably  incurred  by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability  or  action.  This  indemnity  agreement  will be in  addition  to any
liability which the Company or the Trust may otherwise have.

     8.1.2 Promptly  after receipt by an Indemnified  Party under this Section 8
of notice of the commencement of any action,  such Indemnified  Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, promptly notify the indemnifying party in writing of the commencement
thereof;  but the  failure  so to  notify  the  indemnifying  party (i) will not
relieve the  indemnifying  party from liability under Section 8.1.1 above unless
and  to  the  extent  that  such  failure  results  in  the  forfeiture  by  the
indemnifying  party of material  rights and  defenses  and (ii) will not, in any
event,  relieve the  indemnifying  party from any obligations to any Indemnified
Party other than the indemnification obligation provided in Section 8.1.1 above.
The Purchaser  shall be entitled to appoint counsel to represent the Indemnified
Party in any action for which  indemnification  is sought. An indemnifying party
may participate at its own expense in the defense of any such action;  provided,
however,  that  counsel to the  indemnifying  party shall not  (except  with the
consent of the Indemnified  Party) also be counsel to the Indemnified  Party. In
no event shall the indemnifying  parties be liable for fees and expenses of more
than one counsel  (in  addition to any local  counsel)  separate  from their own
counsel  for all  Indemnified  Parties  in  connection  with any one  action  or
separate but similar or related actions in the same jurisdiction  arising out of
the same general  allegations or circumstances.  An indemnifying party will not,
without  the  prior  written  consent  of the  Indemnified  Parties,  settle  or
compromise  or consent to the entry of any judgment  with respect to any pending
or  threatened   claim,   action,   suit  or  proceeding  in  respect  of  which
indemnification  may be sought hereunder (whether or not the Indemnified Parties
are actual or  potential  parties to such  claim,  action,  suit or  proceeding)
unless such settlement,  compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising out of such claim,  action,
suit or proceeding.

          8.2   Contribution.

                                       19
<PAGE>

     8.2.1  In  order  to  provide  for  just  and  equitable   contribution  in
circumstances under which the indemnification provided for in Section 8.1 hereof
is for any reason held to be  unenforceable  for the  benefit of an  Indemnified
Party in  respect  of any  losses,  liabilities,  claims,  damages  or  expenses
referred to  therein,  then each  indemnifying  party  shall  contribute  to the
aggregate  amount of such  losses,  liabilities,  claims,  damages and  expenses
incurred by such  Indemnified  Party, as incurred,  (i) in such proportion as is
appropriate to reflect the relative benefits received by the Sellers, on the one
hand, and the Purchaser,  on the other hand, from the offering of the Securities
or (ii) if the allocation  provided by clause (i) is not permitted by applicable
law, in such  proportion  as is  appropriate  to reflect  not only the  relative
benefits  referred to in clause (i) above,  but also the  relative  fault of the
Sellers,  on the one hand, and the  Purchaser,  on the other hand, in connection
with the  statements,  omissions  or  breaches,  which  resulted in such losses,
liabilities,  claims,  damages  or  expenses,  as  well  as any  other  relevant
equitable considerations.

     8.2.2 The relative benefits  received by the Sellers,  on the one hand, and
the  Purchaser,  on the other  hand,  in  connection  with the  offering  of the
Securities shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the  Securities  (before  deducting  expenses)
received  by the  Sellers  and the Fee  received  by the  Purchaser  bear to the
aggregate of such net proceeds and the Fee.

     8.2.3 The  Sellers  and the  Purchaser  agree that it would not be just and
equitable if  contribution  pursuant to this Section 8.2 were  determined by pro
rata allocation or by any other method of allocation which does not take account
of the  equitable  considerations  referred to above in this  Section  8.2.  The
aggregate amount of losses,  liabilities,  claims, damages and expenses incurred
by an  Indemnified  Party and  referred  to above in this  Section  8.2 shall be
deemed  to  include  any legal or other  expenses  reasonably  incurred  by such
Indemnified  Party  in   investigating,   preparing  or  defending  against  any
litigation,  or any  investigation or proceeding by any  governmental  agency or
body,  commenced  or  threatened,  or any claim  whatsoever  based upon any such
untrue or alleged untrue  statement,  omission or alleged  omission or breach or
alleged breach.

     8.2.4 Notwithstanding any provision of this Section 8 to the contrary,  the
Purchaser shall not be required to contribute any amount in excess of the amount
of the Fee.

     8.2.5 No person guilty of fraudulent  misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to  contribution  from
any person who was not guilty of such fraudulent misrepresentation.

     8.2.6 For purposes of this Section 8.2,  each person,  if any, who controls
the Purchaser  within the meaning of Section 15 of the Securities Act or Section
20 of the  Exchange  Act  and  the  respective  partners,  directors,  officers,
employees and agents of the Purchaser or any such controlling  person shall have
the same  rights to  contribution  as the  Purchaser,  while  each  officer  and
director of the Company,  each trustee of the Trust and each person, if any, who
controls the Company  within the meaning of Section 15 of the  Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Sellers.

                                       20
<PAGE>

          8.3   Additional Remedies. The indemnity and  contribution  agreements
contained  in this Section 8 are in addition to any  liability  that the Sellers
may otherwise have to any Indemnified Party.

          8.4   Additional Indemnification. The Company shall indemnify and hold
harmless  the Trust  against  all loss,  liability,  claim,  damage and  expense
whatsoever, as due from the Trust under Sections 8.1 through 8.3 hereof.

          Section 9. Rights and Responsibilities of Purchaser.

          9.1   Reliance. In  performing  its duties under this  Agreement,  the
Purchaser shall be entitled to rely upon any notice,  signature or writing which
it shall in good faith  believe to be genuine and to be signed or presented by a
proper  party  or  parties.   The  Purchaser  may  rely  upon  any  opinions  or
certificates  or other  documents  delivered by the Sellers or their  counsel or
designees to the Purchaser.

          9.2   Rights of Purchaser. In connection with the  performance  of its
duties under this Agreement,  the Purchaser shall not be liable for any error of
judgment or any action  taken or omitted to be taken  unless the  Purchaser  was
grossly  negligent  or engaged in willful  misconduct  in  connection  with such
performance or non-performance. No provision of this Agreement shall require the
Purchaser  to  expend  or risk its own funds or  otherwise  incur any  financial
liability in connection with the performance of any of its duties hereunder.

          Section  10.   Termination.   This  Agreement   shall  be  subject  to
termination in the absolute discretion of the Purchaser,  by notice given to the
Company  and the  Trust  prior to  delivery  of and  payment  for the  Preferred
Securities,  if prior to such time (i) a downgrading  shall have occurred in the
rating  accorded  the  Company's  debt  securities  or  preferred  stock  by any
"nationally recognized statistical rating organization," as that term is used by
the SEC in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, or such organization
shall have publicly  announced that it has under  surveillance  or review,  with
possible negative  implications,  its rating of the Company's debt securities or
preferred  stock,  (ii) the Trust  shall be unable  to sell and  deliver  to the
Purchaser at least $12,000,000  stated aggregate  liquidation value of Preferred
Securities,  (iii) the  Company  or any of its  subsidiaries  that is an insured
depository  institution  shall cease to be  "adequately-capitalized"  within the
meaning of 12 U.S.C. Section 1831 and applicable regulations adopted thereunder,
or any formal  administrative  or  judicial  action is taken by any  appropriate
federal  banking agency  against the Company or any such insured  subsidiary for
unsafe and unsound banking practices, or violations of law, (iv) a suspension or
material  limitation in trading in securities  generally  shall have occurred on
the New York Stock Exchange,  (v) a suspension or material limitation in trading
in any of the  Company's  securities  shall have  occurred  on the  exchange  or
quotation system upon which the Company's  securities are traded, if any, (vi) a
general  moratorium on commercial  banking  activities  shall have been declared
either by federal or California  authorities  or (vii) there shall have occurred
any outbreak or escalation of  hostilities,  or declaration by the United States
of a national  emergency or war or other  calamity or crisis the effect of which
on  financial  markets  is such  as to make  it,  in the  Purchaser's  judgment,
impracticable  or  inadvisable  to proceed  with the offering or delivery of the
Preferred Securities.

                                       21
<PAGE>

          Section 11. Miscellaneous.

          11.1  Disclosure  Schedule.  The term  "Disclosure  Schedule," as used
herein,  means the schedule,  if any, attached to this Agreement that sets forth
items the disclosure of which is necessary or appropriate as an exception to one
or more  representations  or  warranties  contained  in  Section 4  hereof.  The
Disclosure Schedule shall be arranged in paragraphs corresponding to the section
numbers  contained in Section 4.  Nothing in the  Disclosure  Schedule  shall be
deemed  adequate to disclose an exception to a  representation  or warranty made
herein unless the Disclosure  Schedule  identifies the exception with reasonable
particularity  and describes the relevant  facts in reasonable  detail.  Without
limiting the generality of the immediately preceding sentence,  the mere listing
(or inclusion of a copy) of a document or other item in the Disclosure  Schedule
shall not be deemed  adequate to disclose an  exception to a  representation  or
warranty  made herein unless the  representation  or warranty has to do with the
existence  of the  document or other item  itself.  Information  provided by the
Company in response to any due diligence  questionnaire shall not be deemed part
of the Disclosure  Schedule and shall not be deemed to be an exception to one or
more  representations  or  warranties  contained in Section 4 hereof unless such
information is  specifically  included on the Disclosure  Schedule in accordance
with the provisions of this Section 11.1.

          11.2  Notices.  All  communications  hereunder  will be in writing and
effective only on receipt,  and will be mailed,  delivered by hand or courier or
sent by facsimile and confirmed:

If to the Purchaser, to:

                             TWE, Ltd.
                             c/o Maples Finance Limited
                             P.O. Box 1093 GT
                             Queensgate House
                             South Church Street
                             George Town
                             Grand Cayman, Cayman Islands
                             Facsimile: (345) 945-7100
                             Telephone: (345) 945-7099
                             Attention: The Directors

with a copy to:

                             Thacher Proffitt & Wood LLP
                             Two World Financial Center
                             New York, New York 10281
                             Facsimile:  (212) 912-7751
                             Telephone:  (212) 912-7400
                             Attention:  Mark I. Sokolow, Esq.

if to the Sellers, to:

                                       22
<PAGE>

                             Temecula Valley Bancorp Inc.
                             Temecula Valley Statutory Trust V
                             27710 Jefferson Avenue #A100
                             Temecula, CA 92590
                             Facsimile: (951) 694-9141
                             Telephone:  (951) 694-9040
                             Attention:  Chairman, Chief Executive Officer and
                                         President

with a copy to:

                             McAndrews, Allen & Matson
                             1100 South Coast Highway, Suite 308
                             Laguna Beach, CA 92651
                             Facsimile: (949) 497-0291
                             Telephone:  (949) 497-0292
                             Attention: Stephanie E. Allen

     All such notices and communications shall be deemed to have been duly given
(i) at the time delivered by hand, if personally  delivered,  (ii) five business
days after being deposited in the mail, postage prepaid,  if mailed,  (iii) when
answered back, if telexed, (iv) the next business day after being telecopied, or
(v) the next  business  day  after  timely  delivery  to a  courier,  if sent by
overnight  air  courier  guaranteeing  next-day  delivery.  From and  after  the
Closing,  the  foregoing  notice  provisions  shall be  superseded by any notice
provisions  of  the  Operative  Documents  under  which  notice  is  given.  The
Purchaser,   the  Sellers,  and  their  respective  counsel,  may  change  their
respective notice addresses,  from time to time, by written notice to all of the
foregoing persons.

          11.3  Parties in Interest, Successors and Assigns. This Agreement will
inure to the  benefit  of and be  binding  upon the  parties  hereto  and  their
respective  successors and permitted assigns.  Nothing expressed or mentioned in
this  Agreement  is intended or shall be construed to give any person other than
the parties hereto and the affiliates,  directors,  officers,  employees, agents
and  controlling  persons  referred  to in Section 8 hereof,  their  successors,
assigns,  heirs and legal  representatives,  and any Subsequent  Purchaser,  any
right or obligation hereunder.  None of the rights or obligations of the Company
or the Trust under this  Agreement may be assigned,  whether by operation of law
or otherwise,  without the  Purchaser's  prior written  consent.  The rights and
obligations of the Purchaser  under this  Agreement may be assigned  without the
Company's  or the  Trust's  consent;  provided  that the  assignee  assumes  the
obligations of the Purchaser under this Agreement.

          11.4  Recourse  Limited. No recourse  shall be had to any  subscriber,
officer,  director,   employee,  trustee,  equity  holder,  certificate  holder,
incorporator  or agent of the  Purchaser  or its  successors  or assigns for any
obligations hereunder. The Sellers, severally and jointly, further agree (i) not
to take any action in respect of any claims  hereunder  against any  subscriber,
officer,  director,   employee,  trustee,  equity  holder,  certificate  holder,
incorporator  or agent of the Purchaser or any of its successors or assigns that
is an investment vehicle issuing collateralized debt obligations and (ii) not to
institute against any successor or assign of the Purchaser that is an investment
vehicle issuing  collateralized  debt  obligations  any insolvency,  bankruptcy,

                                       23
<PAGE>

reorganization, liquidation or similar proceedings in any jurisdiction until one
year and one day or, if longer, the applicable preference period then in effect,
as the case may be, shall have elapsed  since the final  payments to the holders
of the securities issued by such investment vehicle.

          11.5  Amendments. This Agreement may not be modified, amended, altered
or supplemented,  except upon the execution and delivery of a written  agreement
by each of the parties hereto.

          11.6  Counterparts  and Facsimile.  This  Agreement may be executed by
any one or more of the  parties  hereto in any number of  counterparts,  each of
which  shall  be  deemed  to be an  original,  but all such  counterparts  shall
together constitute one and the same instrument.  This Agreement may be executed
by any one or more of the parties  hereto by facsimile  which shall be effective
as delivery of a manually executed counterpart hereof.

          11.7  Headings. The headings in this Agreement are for  convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          11.8  Governing  Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
AND  ENFORCED  IN  ACCORDANCE  WITH THE LAW OF THE  STATE  OF NEW  YORK  WITHOUT
REFERENCE TO  PRINCIPLES  OF CONFLICTS OF LAW (OTHER THAN SECTION  5-1401 OF THE
GENERAL OBLIGATIONS LAW).

          11.9  Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR
AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS AGREEMENT MAY
BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK,  IN AND FOR THE
COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY,  GENERALLY  AND  UNCONDITIONALLY,  THE  JURISDICTION  OF THE AFORESAID
COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT.

          11.10 Entire  Agreement.  This Agreement,  together with the Operative
Documents and the other documents  delivered in connection with the transactions
contemplated by this Agreement, is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive  statement of the
agreement  and  understanding  of the  parties  hereto in respect of the subject
matter  contained  herein  and  therein.  There are no  restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  This  Agreement,  together with the Operative  Documents and the other
documents  delivered in connection  with the  transaction  contemplated  by this
Agreement,  supersedes  all prior  agreements  and  understandings  between  the
parties with respect to such subject matter.

          11.11  Severability.  In  the  event  that  any  one  or  more  of the
provisions contained herein, or the application thereof in any circumstances, is

                                       24
<PAGE>

held  invalid,  illegal or  unenforceable  in any respect  for any  reason,  the
validity,  legality  and  enforceability  of any such  provision  in every other
respect and of the remaining  provisions hereof shall not be in any way impaired
or affected, it being intended that all of the Purchaser's rights and privileges
shall be enforceable to the fullest extent permitted by law.

          11.12   Survival.   The   respective   agreements,    representations,
warranties,  indemnities  and other  statements of the Company and the Trust and
their respective  officers or trustees and of the Purchaser set forth in or made
pursuant to this Agreement  will remain in full force and effect,  regardless of
any  investigation  made by or on behalf of the  Purchasers,  the Company or the
Trust or any of their respective  officers,  directors,  trustees or controlling
persons, and will survive delivery of and payment for the Preferred  Securities.
The  provisions  of  Sections  2.1, 7 and 8 shall  survive  the  termination  or
cancellation of this Agreement.

                     Signatures appear on the following page

                                       25
<PAGE>

     IN WITNESS WHEREOF, this Purchase Agreement has been entered into as of the
date first written above.

                                        TEMECULA VALLEY BANCORP INC.

                                        By: /s/ Stephen H. Wacknitz
                                            ------------------------------------
                                            Stephen H. Wacknitz
                                            Chairman, Chief  Executive Officer
                                            and President

                                            TEMECULA VALLEY STATUTORY TRUST V,
                                            By: TEMECULA VALLEY BANCORP INC.,
                                            as Depositor

                                        By: /s/ Donald A. Pitcher
                                            ------------------------------------
                                            Donald A. Pitcher
                                            Executive Vice President, Chief
                                            Financial Officer and Secretary

                                            TWE, LTD., as Purchaser,
                                            By: Trapeza Capital Management, LLC,
                                            as Portfolio Manager

                                        By: /s/ John M. Stein
                                            ------------------------------------
                                            John M. Stein
                                            Managing Director

                                       26
<PAGE>

                                                                 Schedule [I/II]

                        List of Significant Subsidiaries

Temecula Valley Bank

                                       27
<PAGE>

                                                                     EXHIBIT A-1

                   FORM OF THACHER PROFFITT & WOOD LLP OPINION

         Pursuant to Section 3.2(a) of the Purchase Agreement, Thacher Proffitt
& Wood LLP, special counsel for the Purchaser, shall deliver an opinion to the
effect that:

(i)  the  Company  and each  Significant  Subsidiary  is validly  existing  as a
     corporation in good standing under the laws of the jurisdiction in which it
     is chartered or organized;

(ii) the Company has  corporate  power and authority to (a) execute and deliver,
     and to perform its obligations  under, the Operative  Documents to which it
     is a party and (b) issue and perform its obligations under the Notes;

(iii) neither  the  issue  and  sale of the  Common  Securities,  the  Preferred
      Securities or the Junior Subordinated Notes, nor the purchase by the Trust
      of the Junior Subordinated  Notes,  nor the execution and delivery of, and
      compliance with, the Operative  Documents to which each is a party by, the
      Company  or  the   Trust,  nor  the   consummation  of   the  transactions
      contemplated thereby  will  constitute  a breach or violation of the Trust
      Agreement or the charter or by-laws of the Company;

(iv) the Amended and Restated Trust Agreement has been duly authorized, executed
     and  delivered  by the  Company  and duly  executed  and  delivered  by the
     Administrative Trustees;

(v)  each of the Guarantee and the Indenture has been duly authorized,  executed
     and  delivered  by the Company and,  assuming it has been duly  authorized,
     executed and delivered by the Guarantee Trustee and the Indenture  Trustee,
     respectively,  constitutes  a legal,  valid and binding  obligation  of the
     Company,  enforceable  against  the Company in  accordance  with its terms,
     subject to applicable  bankruptcy,  insolvency  and similar laws  affecting
     creditors' rights generally and to general principles of equity;

(vi) the Junior Subordinated Notes have been duly authorized and executed by the
     Company  and  delivered  to the  Indenture  Trustee for  authentication  in
     accordance  with the Indenture and, when  authenticated  in accordance with
     the provisions of the Indenture and delivered to the Trust against  payment
     therefor,  will  constitute  legal,  valid and binding  obligations  of the
     Company  entitled to the benefits of the Indenture and enforceable  against
     the  Company  in  accordance  with  their  terms,   subject  to  applicable
     bankruptcy,   insolvency  and  similar  laws  affecting  creditors'  rights
     generally and to general principles of equity;

(vii) the Trust is not, and, following the issuance of the Preferred  Securities
      and  the  consummation of  the  transactions contemplated by the Operative
      Documents and the  application  of the proceeds  therefrom, the Trust will
      not   be,  an  "investment  company"  or  an  entity  "controlled"  by  an
      "investment company," in each case within the  meaning  of  the Investment
      Company Act;

(viii) assuming  (a) the accuracy of the  representations  and  warranties,  and
       compliance with the  agreements  contained in  the Purchase Agreement and
       (b) that the Preferred Securities  are sold in a manner  contemplated by,
       and in accordance with the Purchase Agreement and the Amended and

                                      A-1-1

<PAGE>

       Restated  Trust  Agreement,  it  is not necessary in  connection with the
       offer, sale and delivery of the Preferred  Securities by the Trust to the
       Purchaser,  to register any of the Securities under the Securities Act or
       to  require  qualification  of the  Indenture  under  the Trust Indenture
       Act of 1939, as amended;

(ix) the Purchase Agreement has been duly authorized,  executed and delivered by
     the Company and the Trust; and,

(x)  the Indenture  constitutes a valid and binding  instrument of the Indenture
     Trustee,  enforceable  against the Indenture Trustee in accordance with its
     terms,  except as rights to indemnity and  contribution  thereunder  may be
     limited  under  applicable  law  or  public  policy,  and  subject  to  the
     qualifications  that (i) enforcement  thereof may be limited by bankruptcy,
     insolvency, receivership, reorganization, liquidation, voidable preference,
     moratorium or other laws  (including the laws of fraudulent  conveyance and
     transfer) or judicial  decisions  affecting the  enforcement  of creditors'
     rights generally or the  reorganization of financial  institutions and (ii)
     the  enforceability of the Indenture  Trustee's  obligations  thereunder is
     subject  to  general  principles  of equity  (regardless  of  whether  such
     enforceability  is  considered  in a proceeding in equity or at law) and to
     the effect of certain laws and judicial decisions upon the availability and
     enforceability  of certain  remedies,  including  the  remedies of specific
     performance and self-help.

In  rendering  such  opinions,  such  counsel  may (A) state that its opinion is
limited to the laws of the State of New York, the Delaware  General  Corporation
Law and the federal laws of the United States;  (B) as to matters  involving the
application of laws of any jurisdiction other than the State of New York and the
Delaware General  Corporation Law or the federal laws of the United States,  (i)
rely,  to the extent  deemed  proper and  specified  in such  opinion,  upon the
opinion of other  counsel of good  standing  believed to be reliable and who are
satisfactory to the Purchaser or (ii) assume such law is  substantially  similar
to the law of the State of New York and, (C) as to matters of fact,  rely to the
extent deemed proper, on certificates of responsible officers of the Company and
public officials.

                                      A-1-2

<PAGE>

                                                                     EXHIBIT A-2

                         FORM OF COMPANY COUNSEL OPINION
                            OR OFFICERS' CERTIFICATE

     Pursuant to Section  3.2(b) of the Purchase  Agreement,  either (i) counsel
for the Company  shall  deliver an opinion,  or (ii) the [General  Counsel/Chief
Legal Officer] of the Company shall deliver an opinion, or, (iii) if the Company
does not have a General  Counsel or Chief Legal  Officer,  the [Chief  Executive
Officer/President/Executive     Vice    President]    and    [Chief    Financial
Officer/Treasurer/Assistant Treasurer] of the Company shall provide an Officers'
Certificate, to the effect that:

(i)  all of  the  issued  and  outstanding  shares  of  capital  stock  of  each
     Significant Subsidiary are owned of record by the Company, and the issuance
     of the Preferred Securities and the Common Securities is not subject to any
     contractual preemptive rights known to such [counsel/officer];

(ii) no consent,  approval,  authorization or order of any court or governmental
     authority is required for the issue and sale of the Common Securities,  the
     Preferred  Securities or the Junior Subordinated Notes, the purchase by the
     Trust of the Junior  Subordinated  Notes, the execution and delivery of and
     compliance with the Operative  Documents by the Company or the Trust or the
     consummation of the transactions  contemplated in the Operative  Documents,
     except such  approvals  (specified in such  [opinion/certificate])  as have
     been obtained;

(iii) to the knowledge of such  [counsel/officer],  there is no action,  suit or
      proceeding  before  or by  any  government, governmental  instrumentality,
      arbitrator  or  court,  domestic  or  foreign,  now  pending or threatened
      against  or  affecting  the  Trust  or  the  Company  or  any  Significant
      Subsidiary   that   could   adversely  affect   the  consummation  of  the
      transactions  contemplated  by  the  Operative  Documents  or could have a
      Material Adverse Effect;

(iv) the Company is duly  registered  as a bank holding  company  under the Bank
     Holding Company Act and the  regulations  thereunder of the Federal Reserve
     Board,  and the deposit  accounts of the Company's  banking  subsidiary are
     insured by the FDIC to the fullest  extent  permitted  by law and the rules
     and  regulations of the FDIC, and no proceeding for the termination of such
     insurance are pending or, to such person's knowledge, threatened;

(v)  The  execution,  delivery and  performance of the Operative  Documents,  as
     applicable,  by the  Company  and the  Trust  and the  consummation  by the
     Company and the Trust of the  transactions  contemplated  by the  Operative
     Documents,  as  applicable,  (a) will not  result in any  violation  of the
     charter or bylaws of the Company,  the charter or bylaws of any Significant
     Subsidiary,  the Amended and Restated Trust Agreement or the Certificate of
     Trust,  and (b) will not conflict with, or result in a breach of any of the
     terms or provisions  of, or  constitute a default (or an event which,  with
     notice or lapse of time or both,  would  constitute  a default)  under,  or
     result in the creation or  imposition of any lien,  charge and  encumbrance
     upon any assets or properties of the Company or any Significant  Subsidiary
     under,  (A) any  agreement,  indenture,  mortgage  or  instrument  that the
     Company or any  Significant  Subsidiary is a party to or by which it may be

                                      A-2-1

<PAGE>

     bound or to which any of its assets or  properties  may be subject,  or (B)
     any existing applicable law, rule or administrative regulation [for General
     Counsel  only:  except  that I  express  no  opinion  with  respect  to the
     securities  laws of the State of  Delaware]  of any  court or  governmental
     agency or authority having jurisdiction over the Company or any Significant
     Subsidiary or any of their respective assets or properties,  except in case
     of (b), where any such violation,  conflict,  breach, default, lien, charge
     or  encumbrance,  would not have a material  adverse  effect on the assets,
     properties,  business,  results of operations or financial condition of the
     Company and its subsidiaries, taken as whole.

     All terms used but not defined  herein shall have the meanings  assigned to
them in the Purchase Agreement. A Subsequent Purchaser shall be entitled to rely
on this [opinion/certificate].

     [Applies only to in-house  counsel  opinion] [In rendering  such  opinions,
such  counsel  may (A) state that the above is limited to the laws of the States
of  [Jurisdiction  of bar  admission],  (B) rely as to matters  of fact,  to the
extent deemed proper, on certificates of responsible officers of the Company and
public officials.]

                                      A-2-2

<PAGE>

                                                                     EXHIBIT A-3

                           FORM OF TAX COUNSEL OPINION

     Pursuant to Section 3.2(c) of the Purchase  Agreement,  Thacher  Proffitt &
Wood LLP, special tax counsel for the Purchaser, shall deliver an opinion to the
effect that:

(i)  the Trust will be classified  for United States federal income tax purposes
     as a  grantor  trust  and  not  as  an  association  or a  publicly  traded
     partnership taxable as a corporation; and

(ii) for United  States  federal  income tax purposes,  the Junior  Subordinated
     Notes will constitute indebtedness of the Company.

     In rendering such opinions,  such counsel may (A) state that its opinion is
limited to the laws of the State of New York and the federal  laws of the United
States and (B) rely as to  matters of fact,  to the  extent  deemed  proper,  on
certificates of responsible officers of the Company and public officials.

                                      A-3-1

<PAGE>

                                                                     EXHIBIT A-4

                     FORM OF DELAWARE COUNSEL TRUST OPINION

     Pursuant  to  Section  3.2(d) of the  Purchase  Agreement,  Morris,  James,
Hitchens & Williams LLP, special  Delaware counsel for the Trust,  shall deliver
an opinion to the effect that:

(i)  The Trust has been duly created and is validly existing in good standing as
     a statutory  trust under the Delaware  Statutory Trust Act, and all filings
     required  under  the laws of the  State of  Delaware  with  respect  to the
     creation and valid  existence  of the Trust as a statutory  trust have been
     made.

(ii) Under the Delaware  Statutory  Trust Act and the Amended and Restated Trust
     Agreement,  the Trust has the trust power and authority (i) to own property
     and conduct its  business,  all as  described  in the Amended and  Restated
     Trust  Agreement,   (ii)  to  execute  and  deliver,  and  to  perform  its
     obligations  under, each of the Purchase  Agreement,  the Common Securities
     Subscription   Agreement,   the  Junior   Subordinated   Note  Subscription
     Agreement, the Preferred Securities and the Common Securities, and (iii) to
     purchase and hold the Junior Subordinated Notes.

(iii) Under the Delaware  Statutory Trust Act, the  certificate  attached to the
      Amended and Restated Trust Agreement as Exhibit C is an  appropriate  form
      of certificate  to  evidence  ownership  of the Preferred Securities.  The
      Preferred Securities have been duly authorized by the Amended and Restated
      Trust  Agreement and,  when  issued in  accordance  with the  Amended  and
      Restated  Trust  Agreement  and  delivered  against  payment  therefor  in
      accordance  with the Amended and Restated Trust Agreement and the Purchase
      Agreement, the Preferred Securities will be validly issued and (subject to
      the   qualifications  set  forth  in  this   paragraph)   fully  paid  and
      nonassessable  and will  represent undivided  beneficial  interests in the
      assets of the Trust, and the Preferred Security Holders  will be  entitled
      to  the  benefits  of  the  Amended  and  Restated  Trust  Agreement.  The
      Preferred  Security  Holders  as  beneficial  owners of the Trust, will be
      entitled  to  the  same  limitation  of  personal  liability  extended  to
      stockholders  of  private  corporations  for  profit  organized  under the
      General Corporation Law of the  State of Delaware.  The Preferred Security
      Holders may be obligated to make payments or provide indemnity or security
      as set forth in the Amended and Restated Trust Agreement.

(iv) The Common Securities have been duly authorized by the Amended and Restated
     Trust  Agreement  and,  when  issued in  accordance  with the  Amended  and
     Restated  Trust  Agreement  and  delivered  against  payment  therefore  in
     accordance  with the Amended and Restated  Trust  Agreement  and the Common
     Securities  Subscription  Agreement,   will  be  validly  issued  and  will
     represent  undivided  beneficial  interests in the assets of the Trust, and
     the Common  Security Holder will be entitled to the benefits of the Amended
     and Restated Trust Agreement.

(v)  Under the Delaware  Statutory  Trust Act and the Amended and Restated Trust
     Agreement,  the issuance of the Preferred and the Common  Securities is not
     subject to preemptive or other similar rights.

                                      A-4-1

<PAGE>

(vi) Under the Delaware  Statutory  Trust Act and the Amended and Restated Trust
     Agreement,  the  execution  and  delivery  by the  Trust  of  the  Purchase
     Agreement,  the Common  Securities  Subscription  Agreement  and the Junior
     Subordinated Note Subscription Agreement,  and the performance by the Trust
     of its obligations  thereunder,  have been duly authorized by all necessary
     trust action on the part of the Trust.

(vii) The Amended and Restated Trust  Agreement  constitutes a legal,  valid and
      binding obligation of the Company and  the  Trustees,  enforceable against
      the Company and the Trustees in accordance with its terms.

(viii) The issuance and sale by the Trust of the  Preferred  Securities  and the
       Common Securities, the purchase  by the Trust of  the Junior Subordinated
       Notes,  the  execution,  delivery  and  performance  by  the Trust of the
       Purchase Agreement,  the Common Securities Subscription Agreement and the
       Junior Subordinated Note Subscription Agreement,  the consummation by the
       Trust of the transactions  contemplated  by  the  Purchase Agreement, the
       Common Securities Subscription Agreement and the Junior Subordinated Note
       Subscription Agreement,  and compliance by the Trust with its obligations
       thereunder  are  not prohibited  by  (i)  the Certificate of Trust or the
       Amended and Restated Trust  Agreement,  or (ii) any law or  regulation of
       the State of Delaware applicable to the Trust.

(ix) No filing  with,  or  authorization,  approval,  consent,  license,  order,
     registration,  qualification  or decree of, any Delaware  court or Delaware
     governmental  authority or Delaware agency is required solely in connection
     with the  issuance  and  sale by the  Trust of the  Trust  Securities,  the
     purchase  by the Trust of the Junior  Subordinated  Notes,  the  execution,
     delivery and performance by the Trust of the Purchase Agreement, the Common
     Securities   Subscription   Agreement  and  the  Junior  Subordinated  Note
     Subscription  Agreement,  the consummation by the Trust of the transactions
     contemplated  by the Purchase  Agreement,  and compliance by the Trust with
     its obligations thereunder.

(x)  The Preferred Security Holders (other than those Preferred Security Holders
     who  reside  or are  domiciled  in the  State  of  Delaware)  will  have no
     liability  for income  taxes  imposed by the State of Delaware  solely as a
     result of their participation in the Trust and the Trust will not be liable
     for any income tax imposed by the State of Delaware.

     In rendering such opinions,  such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware and (B) rely as to matters of fact,
to the extent deemed proper,  on  certificates  of  responsible  officers of the
Company and public officials.

                                      A-4-2

<PAGE>

                                                                     EXHIBIT A-5

                         FORM OF TRUSTEE COUNSEL OPINION

     Pursuant  to  Section  3.2(e) of the  Purchase  Agreement,  Morris,  James,
Hitchens & Williams LLP, special counsel for the Property Trustee, the Guarantee
Trustee,  the  Delaware  Trustee and the  Indenture  Trustee,  shall  deliver an
opinion to the effect that:

(i)  Wilmington  Trust Company is duly  incorporated  and validly  existing as a
     Delaware  banking  corporation in good standing under the laws of the State
     of Delaware  with trust powers and its  principal  place of business in the
     State of Delaware.

(ii) Wilmington  Trust  Company has requisite  corporate  power and authority to
     execute and deliver,  and to perform its obligations under, the Amended and
     Restated Trust Agreement, the Guarantee Agreement and the Indenture.

(iii) The execution,  delivery,  and performance by Wilmington  Trust Company of
      the Amended and Restated Trust Agreement, the Guarantee  Agreement and the
      Indenture have been duly authorized by all necessary  corporate  action on
      the part of Wilmington  Trust Company,  and the Amended and Restated Trust
      Agreement, the  Guarantee  Agreement  and the  Indenture  have  been  duly
      executed and delivered by Wilmington Trust Company.

(iv) The Amended and  Restated  Trust  Agreement  is a legal,  valid and binding
     obligation of Wilmington  Trust  Company,  enforceable  against  Wilmington
     Trust Company, in accordance with its terms.

(v)  No  approval,  authorization  or other  action  by,  or  filing  with,  any
     governmental  authority or agency under any law or  regulation of the State
     of Delaware or the United  States of America  governing the trust powers of
     Wilmington  Trust  Company  is  required  solely  in  connection  with  the
     execution,  delivery and  performance  by  Wilmington  Trust Company of the
     Amended and Restated  Trust  Agreement,  the  Guarantee  Agreement  and the
     Indenture,  except  for the  filing of the  Certificate  of Trust  with the
     Secretary of State, which Certificate of Trust has been duly filed with the
     Secretary of State.

(vi) The execution,  delivery and  performance of the Amended and Restated Trust
     Agreement,  the Guarantee  Agreement and the Indenture by Wilmington  Trust
     Company are not prohibited by (i) the Charter or Bylaws of Wilmington Trust
     Company,  (ii) any law or regulation of the State of Delaware or the United
     States of America  governing the trust powers of Wilmington  Trust Company,
     or  (iii)  to our  knowledge  (based  and  relying  solely  on the  Officer
     Certificates),  any  agreements or instruments  to which  Wilmington  Trust
     Company  is a party or by which  Wilmington  Trust  Company is bound or any
     judgment or order applicable to Wilmington Trust Company.

(vii) The Junior  Subordinated  Notes  delivered  on the date  hereof  have been
      authenticated  by due execution thereof and delivered by Wilmington  Trust
      Company,  as Indenture  Trustee, in accordance with the Company Order. The

                                      A-5-1
<PAGE>

      Preferred Securities  delivered on the date hereof have been authenticated
      by due  execution thereof and delivered by Wilmington  Trust  Company,  as
      Property Trustee, in accordance with the Trust Order.

     In rendering such opinions,  such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware  and the federal laws of the United
States governing the trust powers of Wilmington Trust Company and (B) rely as to
matters of fact, to the extent deemed  proper,  on  certificates  of responsible
officers of Wilmington Trust Company and public officials.

                                      A-5-2

<PAGE>

                                                                       Exhibit B

                          FORM OF OFFICER'S CERTIFICATE

     The undersigned,  the [Chief Financial Officer] [Treasurer] [Executive Vice
President] hereby certifies, pursuant to Section 6.10 of the Purchase Agreement,
dated as of September 27, 2006, that as of _________,  20___ the Company had the
following ratios and balances:

BANK HOLDING COMPANY

As of [Quarterly Financial Dates]

Tier 1 Risk Weighted Assets                                                   %
                                                                   -----------
Ratio of Double Leverage                                                      %
                                                                   -----------
Non-Performing Assets to Loans and OREO                                       %
                                                                   -----------
Tangible Common Equity as a Percentage of Tangible Assets                     %
                                                                   -----------
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                                                    %
                                                                   -----------
Double Leverage (exclude trust preferred as equity)                           %
                                                                   -----------
Total Assets                                                      $
                                                                   -----------
Year to Date Income                                               $
                                                                   -----------

* A table describing the quarterly report calculation procedures is attached.

[FOR FISCAL YEAR END:  Attached  hereto are the audited  consolidated  financial
statements  (including the balance sheet, income statement and statement of cash
flows,  and  notes  thereto,   together  with  the  report  of  the  independent
accountants  thereon) of the Company and its  consolidated  subsidiaries for the
three years ended _______, 20__.]

[FOR FISCAL  QUARTER END:  Attached  hereto are the unaudited  consolidated  and
consolidating  financial  statements  (including  the  balance  sheet and income
statement)  of the  Company  and its  consolidated  subsidiaries  for the fiscal
quarter and [six/nine] month period ended _______, 20___.]

                                       B-1

<PAGE>

The financial statements fairly present in all material respects,  in accordance
with U.S.  generally  accepted  accounting  principles  ("GAAP"),  the financial
position of the Company and its  consolidated  subsidiaries,  and the results of
operations  and changes in financial  condition as of the date, and for the [___
quarter  interim]  [annual]  period  ended  _______,  20__,  and such  financial
statements  have been  prepared in  accordance  with GAAP  consistently  applied
throughout the period involved (expect as otherwise noted therein).

     IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate
as of this _____ day of _____________, 20__

                                               ---------------------------------
                                               Name:
                                               Title:
                                               Temecula Valley Bancorp Inc.
                                               27710 Jefferson Avenue #A100
                                               Temecula, CA 92590
                                               Tel: (951) 694-9040

                                       B-2

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                              FINANCIAL DEFINITIONS

                              BANK HOLDING COMPANY

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     Report Item         Corresponding FRY-9C or LP Line Items with Line Item               Description of Calculation
                                        corresponding Schedules
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<S>                     <C>                                                      <C>
Tier 1 Risk Weighted    BHCK7206                                                 Tier 1 Risk Ratio: Core Capital (Tier 1)/
Assets                                                                           Risk-Adjusted Assets
                        Schedule HC-R
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Ratio of Double         (BHCP0365)/(BCHCP3210)                                   Total equity investments in subsidiaries divided
Leverage                                                                         by the total equity capital. This field is
                        Schedule PC in the LP                                    calculated at the parent company level.
                                                                                 "Subsidiaries" include bank, bank holding
                                                                                 company, and non-bank subsidiaries.
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Non-Performing Assets   (BHCK5525-BHCK3506+BHCK5526-                             Total Nonperforming Assets (NPLs+Foreclosed Real
to Loans and OREO       BHCK3507+BHCK2744/(BHCK2122+BHCK2744)                    Estate+Other Nonaccrual & Repossessed
                                                                                 Assets)/Total Loans+Foreclosed Real Estate
                        Schedules HC-C, HC-M & HC-N
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Tangible Common         (BHDM3210-BHCK3163)/(BHCK2170-BHCK3163)                  (Equity Capital - Goodwill)/(Total Assets -
Equity as a                                                                      Goodwill)
Percentage of           Schedule HC
Tangible Assets
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Ratio of Reserves to    (BHCK3123+BHCK3128)/(BHCK5525-                           Total Loan Loss and Allocated Transfer Risk
Non-Performing Loans    BHCK3506+BHCK5526-BHCK3507)                              Reserves/Total Nonperforming Loans (Nonaccrual
                                                                                 + Restructured)
                        Schedules HC & HC-N & HC-R
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Ratio of Net            (BHCK4635-BHCK4605)/(BHCK3516)                           Net charge offs for the period as a percentage
Charge-Offs to Loans                                                             of average loans.
                        Schedules HI-B & HC-K
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Return on Average       (BHCK4340/BHCK3368)                                      Net Income as a percentage of Assets.
Assets (annualized)
                        Schedules HI & HC-K
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Net Interest Margin     (BHCK4519/(BHCK3515+BHCK3365+BHCK3516+                   (Net Interest Income Fully Taxable Equivalent,
(annualized)            BHCK3401+BHCKB985)                                       if available/Average Earning Assets)

                        Schedules HI Memorandum and HC-K
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Efficiency Ratio        (BHCK4093)/(BHCK4519+BHCK4079)                           (Non-interest Expense)/(Net Interest Income
                                                                                 Fully Taxable Equivalent, if available, plus
                        Schedule HI                                              Non-interest Income)
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Ratio of Loans to       (BHCKB528+BHCK5369)/(BHCK2170)                           Total Loans & Leases (Net of Unearned Income &
Assets                                                                           Gross of Reserve)/Total Assets
                        Schedule HC
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Ratio of Loans to       (BHCKB528+BHCK5369)/(BHDM6631+BHDM6636+                  Total Loans & Leases (Net of Unearned Income &
Deposits                BHFN6631+BHFN6636)                                       Gross of Reserve)/Total Deposits (Includes
                                                                                 Domestic and Foreign Deposits)
                        Schedule HC
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<S>                     <C>                                                      <C>
Total Assets            (BHCK2170)                                               The sum of total assets. Includes cash and
                                                                                 balances due from depository institutions;
                        Schedule HC                                              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.
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