Document:

Exhibit
4.6

 

 

 

JUNIOR
SUBORDINATED INDENTURE

 

 

between

 

 

FIRST COMMUNITY
BANCORP

 

 

and

 

 

THE BANK OF NEW
YORK,

as
Trustee

 

 

 

Dated as of
September 3, 2003

 

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  
	
   

  
	
  Definitions and Other
  Provisions of General Application

  
	
   

  	
   

  
	
  SECTION 1.1.

  	
  Definitions

  
	
  SECTION 1.2.

  	
  Compliance Certificate and Opinions

  
	
  SECTION 1.3.

  	
  Forms of Documents Delivered to
  Trustee

  
	
  SECTION 1.4.

  	
  Acts of Holders

  
	
  SECTION 1.5.

  	
  Notices, Etc. to Trustee and Company

  
	
  SECTION 1.6.

  	
  Notice to Holders; Waiver

  
	
  SECTION 1.7.

  	
  Effect of Headings and Table of
  Contents

  
	
  SECTION 1.8.

  	
  Successors and Assigns

  
	
  SECTION 1.9.

  	
  Separability Clause

  
	
  SECTION 1.10.

  	
  Benefits of Indenture

  
	
  SECTION 1.11.

  	
  Governing Law

  
	
  SECTION 1.12.

  	
  RESERVED

  
	
  SECTION 1.13.

  	
  Non-Business Days

  
	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  Security Forms

  
	
   

  
	
  SECTION 2.1.

  	
  Form of Security

  
	
  SECTION 2.2.

  	
  Restricted Legend

  
	
  SECTION 2.3.

  	
  Form of Trustee’s Certificate of
  Authentication

  
	
  SECTION 2.4.

  	
  Temporary Securities

  
	
  SECTION 2.5.

  	
  Definitive Securities

  
	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  The Securities

  
	
   

  
	
  SECTION 3.1.

  	
  Payment of Principal and Interest

  
	
  SECTION 3.2.

  	
  Denominations

  
	
  SECTION 3.3.

  	
  Execution, Authentication, Delivery
  and Dating

  
	
  SECTION 3.4.

  	
  Global Securities

  
	
  SECTION 3.5.

  	
  Registration, Transfer and Exchange
  Generally

  
	
  SECTION 3.6.

  	
  Mutilated, Destroyed, Lost and Stolen
  Securities

  
	
  SECTION 3.7.

  	
  Persons Deemed Owners

  

 

i

 

	
  SECTION 3.8.

  	
  Cancellation

  
	
  SECTION 3.9.

  	
  Deferrals of Interest Payment Dates

  
	
  SECTION 3.10.

  	
  Right of Set-Off

  
	
  SECTION 3.11.

  	
  Agreed Tax Treatment

  
	
  SECTION 3.12.

  	
  CUSIP Numbers

  
	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  
	
  Satisfaction and Discharge

  
	
   

  
	
  SECTION 4.1.

  	
  Satisfaction and Discharge of Indenture

  
	
  SECTION 4.2.

  	
  Application of Trust Money

  
	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  Remedies

  
	
   

  
	
  SECTION 5.1.

  	
  Events of Default

  
	
  SECTION 5.2.

  	
  Acceleration of Maturity; Rescission
  and Annulment

  
	
  SECTION 5.3.

  	
  Collection of Indebtedness and Suits
  for Enforcement by Trustee

  
	
  SECTION 5.4.

  	
  Trustee May File Proofs of Claim

  
	
  SECTION 5.5.

  	
  Trustee May Enforce Claim Without
  Possession of Securities

  
	
  SECTION 5.6.

  	
  Application of Money Collected

  
	
  SECTION 5.7.

  	
  Limitation on Suits

  
	
  SECTION 5.8.

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

  
	
  SECTION 5.9.

  	
  Restoration of Rights and Remedies

  
	
  SECTION 5.10.

  	
  Rights and Remedies Cumulative

  
	
  SECTION 5.11.

  	
  Delay or Omission Not Waiver

  
	
  SECTION 5.12.

  	
  Control by Holders

  
	
  SECTION 5.13.

  	
  Waiver of Past Defaults

  
	
  SECTION 5.14.

  	
  Undertaking for Costs

  
	
  SECTION 5.15.

  	
  RESERVED

  
	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  The Trustee

  
	
   

  	
   

  
	
  SECTION 6.1.

  	
  Corporate Trustee Required

  
	
  SECTION 6.2.

  	
  Certain Duties and Responsibilities

  
	
  SECTION 6.3.

  	
  Notice of Defaults

  
	
  SECTION 6.4.

  	
  Certain Rights of Trustee

  
	
  SECTION 6.5.

  	
  May Hold Securities

  

 

ii

 

	
  SECTION 6.6.

  	
  Compensation; Reimbursement; Indemnity

  
	
  SECTION 6.7.

  	
  Resignation and Removal; Appointment
  of Successor

  
	
  SECTION 6.8.

  	
  Acceptance of Appointment by Successor

  
	
  SECTION 6.9.

  	
  Merger, Conversion, Consolidation or
  Succession to Business

  
	
  SECTION 6.10.

  	
  Not Responsible for Recitals or
  Issuance of Securities

  
	
  SECTION 6.11.

  	
  Appointment of Authenticating Agent

  
	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  Holder’s
  Lists and Reports by Trustee and Company

  
	
   

  
	
  SECTION 7.1.

  	
  Company to Furnish Trustee Names and
  Addresses of Holders

  
	
  SECTION 7.2.

  	
  Preservation of Information,
  Communications to Holders

  
	
  SECTION 7.3.

  	
  Reports by Company

  
	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  
	
  Consolidation,
  Merger, Conveyance, Transfer or Lease

  
	
   

  
	
  SECTION 8.1.

  	
  Company May Consolidate, Etc.,
  Only on Certain Terms

  
	
  SECTION 8.2.

  	
  Successor Company Substituted

  
	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  
	
  Supplemental
  Indentures

  
	
   

  
	
  SECTION 9.1.

  	
  Supplemental Indentures without
  Consent of Holders

  
	
  SECTION 9.2.

  	
  Supplemental Indentures with Consent
  of Holders

  
	
  SECTION 9.3.

  	
  Execution of Supplemental Indentures

  
	
  SECTION 9.4.

  	
  Effect of Supplemental Indentures

  
	
  SECTION 9.5.

  	
  Reference in Securities to
  Supplemental Indentures

  
	
   

  	
   

  
	
  ARTICLE X

  
	
   

  	
   

  
	
  Covenants

  
	
   

  
	
  SECTION 10.1.

  	
  Payment of Principal, Premium and
  Interest

  
	
  SECTION 10.2.

  	
  Money for Security Payments to be
  Held in Trust

  
	
  SECTION 10.3.

  	
  Statement as to Compliance

  
	
  SECTION 10.4.

  	
  Calculation Agent

  
	
  SECTION 10.5.

  	
  Additional Tax Sums

  
	
  SECTION 10.6.

  	
  Additional Covenants

  
	
  SECTION 10.7.

  	
  Waiver of Covenants

  
	
  SECTION 10.8.

  	
  Treatment of Securities

  

 

iii

 

	
  ARTICLE XI

  
	
   

  
	
  Redemption
  of Securities

  
	
   

  
	
  SECTION 11.1.

  	
  Optional Redemption

  
	
  SECTION 11.2.

  	
  Special Event Redemption

  
	
  SECTION 11.3.

  	
  Election to Redeem; Notice to Trustee

  
	
  SECTION 11.4.

  	
  Selection of Securities to be
  Redeemed

  
	
  SECTION 11.5.

  	
  Notice of Redemption

  
	
  SECTION 11.6.

  	
  Deposit of Redemption Price

  
	
  SECTION 11.7.

  	
  Payment of Securities Called for
  Redemption

  
	
   

  	
   

  
	
  ARTICLE XII

  
	
   

  
	
  Subordination of Securities

  
	
   

  
	
  SECTION 12.1.

  	
  Securities Subordinate to Senior Debt

  
	
  SECTION 12.2.

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

  
	
  SECTION 12.3.

  	
  Payment Permitted If No Default

  
	
  SECTION 12.4.

  	
  Subrogation to Rights of Holders of
  Senior Debt

  
	
  SECTION 12.5.

  	
  Provisions Solely to Define Relative
  Rights

  
	
  SECTION 12.6.

  	
  Trustee to Effectuate Subordination

  
	
  SECTION 12.7.

  	
  No Waiver of Subordination Provisions

  
	
  SECTION 12.8.

  	
  Notice to Trustee

  
	
  SECTION 12.9.

  	
  Reliance on Judicial Order or
  Certificate of Liquidating Agent

  
	
  SECTION 12.10.

  	
  Trustee Not Fiduciary for Holders of
  Senior Debt

  
	
  SECTION 12.11.

  	
  Rights of Trustee as Holder of
  Senior Debt; Preservation of Trustee’s Rights

  
	
  SECTION 12.12.

  	
  Article Applicable to Paying
  Agents

  
	
   

  	
   

  
	
  SCHEDULES

  
	
   

  
	
  Schedule A

  	
  Determination of LIBOR

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Officer’s Certificate

  

 

iv

 

JUNIOR SUBORDINATED
INDENTURE, dated as of September 3, 2003, between FIRST COMMUNITY BANCORP,
a California corporation (the “Company”), and THE BANK OF NEW YORK, a New
York 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 First Community/CA Statutory Trust VI, 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

 

(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.

 

“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.

 

“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 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).

 

“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 Depository 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

 

“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 or regulation
(including any announced prospective change) or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than insubstantial risk that
within ninety (90) days of the date of such opinion, the aggregate principal
amount of the 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 principal amount of
the Securities as Tier 1 Capital shall not constitute the basis for a Capital
Disqualification Event if such inability results from the Company having such
Securities outstanding in an amount that for any reason (other than a
regulatory action which would have the effect of disqualifying any Securities
for treatment as Tier 1 Capital under applicable capital adequacy guidelines
that had previously been so qualified) is in excess of the amount which may now
or hereafter qualify for treatment as Tier 1 Capital under applicable capital
adequacy guidelines.

 

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

 

“Common Stock” means the
common stock, no par value per share, 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 101 Barclay Street, New York, New York 10286,
Attention: Corporate Trust Administration.

 

“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)

 

3

 

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.

 

“Depository 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.

 

“Event of Default” has the
meaning specified in Section 5.1.

 

“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.

 

4

 

“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 United 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 The Bank of New York, 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 15th, June 15th, September 15th and December 15th of
each year, commencing on December 15, 2003, during the term of this
Indenture.

 

“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

 

5

 

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.

 

“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.

 

“Notice of Default” means a
written notice of the kind specified in Section 5.1(c).

 

“Office of Thrift Supervision”
means the Office of Thrift Supervision, as from time to time constituted or, if
at any time after the execution of this Indenture such Office is not existing
and performing the duties now assigned to it, then the body performing such
duties at such time.

 

“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.

 

“Operative Documents” means
the Trust Agreement, the Indenture, the Purchase Agreement, the Guarantee
Agreement and the Securities.

 

“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.

 

“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

 

6

 

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, 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.

 

“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

 

7

 

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 agreement, dated as of the date hereof, between the Company and the Trust
and Trapeza CDO IV, LLC.

 

“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 Trust Officer or Assistant Trust
Officer, or any other officer of the Corporate Trust Department of the Trustee
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
Common Stock of rights entitling the holders thereof to subscribe for or
purchase shares of any class or series of capital stock of the Company which
rights (i) are deemed to be transferred with such shares of such Common Stock and
(ii) are also issued in respect of future issuances of such Common Stock, 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.

 

“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

 

8

 

Preferred 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 obligation which is junior in right of payment to the Preferred
Securities; 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
Indenture, including, without limitation, the debt securities of the Company
issued under the Indenture, dated September 7, 2000, between the Company
and State Street Bank and Trust Company, as trustee; the debt securities of the
Company issued under the Indenture, dated November 28, 2001, between the
Company and Wilmington Trust Company, as trustee; the debt securities of the
Company issued under the Indenture, dated December 18, 2001, between the
Company and State Street Bank and Trust Company, as trustee; the debt
securities of the Company issued under the Indenture, dated June 26, 2002,
between the Company and State Street Bank and Trust Company, as trustee; and
the debt securities of the Company issued under the Indenture, dated
August 15, 2003, between the Company and U.S. Bank National Association,
as trustee.

 

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

 

“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
September 15, 2033.

 

“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 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

 

9

 

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 Bank of New York (Delaware) 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.

 

(b)                                 Every
certificate 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;

 

10

 

(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 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.

 

11

 

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 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

 

12

 

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. to Trustee and Company.

 

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:

 

(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, or

 

13

 

(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 120 Wilshire Blvd.,
Santa Monica, California 90401, Facsimile: (310) 451-4555, Attn: Chief
Financial Officer or at any other address previously furnished in writing to
the Trustee by the Company.

 

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.

 

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.

 

14

 

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.  RESERVED.

 

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 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.

 

ARTICLE II

 

Security Forms

 

SECTION 2.1.  Form of Security.

 

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

 

First Community
Bancorp

 

Floating Rate
Junior Subordinated Note due 2033

 

	
  No.                        

  	
   

  	
  $                         

  

 

First Community Bancorp,
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
                       ,
or registered assigns, the principal sum of
$                 
Dollars [if
the

 

15

 

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
September 15, 2033.  The Company
further promises to pay interest on said principal sum from September 3,
2003, 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 15th, June 15th, September 15th and
December 15th of each year, commencing on December 15, 2003, 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 the rate equal to LIBOR plus 3.05% per annum, provided,
that, the applicable interest rate shall not exceed 12.0% through
the Interest Payment Date in September, 2008, 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,
further,
that any overdue principal, premium 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 the rate equal to
LIBOR plus 3.05% per annum (provided, that, the applicable interest
rate on such overdue principal, premium or Additional Tax Sums and any overdue
installment of interest shall not exceed 12.0% through the Interest Payment
Date in September, 2008), 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 shall be computed on the basis of a 360-day year and the actual number
of days elapsed in the relevant interest period. The amount of interest payable
for any full interest period shall be computed by dividing the applicable rate
per annum by four. 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 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 on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.

 

So long as no Event of
Default 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

 

16

 

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 the rate equal
to LIBOR plus 3.05% per annum (provided, that, the applicable interest
rate shall not exceed 12.0% through the Interest Payment Date in September,
2008), 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 and
(iii) no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security.  The Company
shall give the Holder of this Security and the Trustee written notice of its
election to begin any such Extension Period at least one Business Day prior to
the next succeeding Interest Payment Date on which interest on this Security
would be payable but for such deferral or, so long as this Security is held by
the Trust, at least one Business Day prior to the earlier of (i) the next
succeeding date on which Distributions on the Preferred Securities of First
Community/CA Statutory Trust VI would be payable but for such deferral and (ii)
the date on which the Property Trustee of such Trust is required to give notice
to any securities exchange or other applicable self-regulatory organization or
to holders of such Preferred Securities of the record date for the payment of
such Distributions.

 

During any such Extension
Period, the Company shall not, unless waived by the requisite Holders of the
Securities and the requisite holders of the Preferred Securities in accordance
with the Indenture (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 capital stock or (ii) 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 shares of capital stock 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 plan or (3) the
issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company’s
capital stock (or any capital stock of a Subsidiary of the Company) for any class
or series of the Company’s capital stock or of any class or series of the
Company’s indebtedness for any class or series of the Company’s capital stock,
(c) the purchase of fractional interests in shares of the Company’s capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged, (d) any declaration of a dividend
in connection

 

17

 

with any Rights Plan, the issuance of rights, stock or other property
under any Rights Plan, or the redemption or repurchase of rights pursuant
thereto or (e) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).

 

Payment of principal of,
premium, if any, and interest on this Security 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 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 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 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 3, 2003 (the “Indenture”),
between the Company and The Bank of New York, 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.

 

18

 

All terms used in this
Security that are defined in the Indenture or in the Amended and Restated Trust
Agreement, dated as of September 3, 2003 (as modified, amended or
supplemented from time to time, the “Trust Agreement”), relating to First
Community/CA Statutory Trust VI (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 September 15, 2008 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 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 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 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.

 

19

 

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 therein, the Holder of,
and any Person that acquires a beneficial interest in, this Security agree
that, for United States federal, state and 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 New 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 caused this instrument to be duly executed.

 

	
   

  	
  First Community Bancorp

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

20

 

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 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, (III) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING
OF SUBPARAGRAPH (a) (1), (2), (3) OR (7)

 

21

 

OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR (V) PURSUANT TO AN EXEMPTION FROM 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) OR (V), SUBJECT TO THE RIGHT OF THE COMPANY TO REQUIRE AN OPINION
OF COUNSEL 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. 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. 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.

 

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, 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, IS NOT PROHIBITED BY
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH
PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND

 

22

 

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

 

THIS 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 (THE “FDIC”).”

 

(b)                                 The
above legend 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 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.

 

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

 

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

 

This is one of the
Securities designated therein referred to in the within-mentioned Indenture.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK, 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

 

23

 

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.

 

ARTICLE III

 

The Securities

 

SECTION 3.1.  Payment of Principal and Interest.

 

(a)                                  The
unpaid principal amount of the Securities shall bear interest at the rate of
LIBOR plus 3.05% per annum until paid or duly provided for, provided,
that, the applicable interest rate shall not exceed 12.0% through
the interest payment date in September, 2008, 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 the rate equal to LIBOR plus 3.05% per annum (provided,
that, the applicable interest rate on such overdue principal,
premium or Additional Tax Sums and any overdue installment of interest shall
not exceed 12.0% through the Interest Payment Date in September, 2008) 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.

 

24

 

(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 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 on which the
Securities may be listed and, upon such notice as may be required by such
exchange (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. Interest payments for the Securities
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

 

25

 

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 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.

 

(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.

 

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 $10,310,000 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 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.

 

(b)                                 The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced or impressed thereon and
attested by its Secretary or one of its Assistant Secretaries. 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

 

26

 

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 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 Securities registered, 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

 

27

 

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 Depository 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.

 

(e)                                  Securities
distributed to holders of Book-Entry Preferred Securities (as defined in the
applicable 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 Depository 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.

 

28

 

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

 

(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 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

 

29

 

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 (g) 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 save
each of them harmless, the Company shall execute and 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.

 

30

 

(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 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 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 the rate equal to LIBOR plus 3.05% per annum (provided,
that, the applicable interest rate shall not exceed 12.0% through
the Interest Payment Date in September, 2008), 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

 

31

 

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 and (iii) no Extension Period shall extend beyond the
Stated Maturity of the principal of the Securities.  The Company shall give the Holders of the Securities and the
Trustee written notice of its election to begin any such Extension Period at
least one Business Day prior to the next succeeding Interest Payment Date on
which interest on the Securities would be payable but for such deferral or, so
long as any Securities are held by the Trust, at least one Business Day prior
to the earlier of (i) the next succeeding date on which Distributions on the
Preferred Securities of such Trust would be payable but for such deferral and
(ii) the date on which the Property Trustee of such Trust is required to give
notice to any securities exchange or other applicable self-regulatory
organization or to holders of such Preferred Securities of the record date for
the payment of such Distributions.

 

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

 

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

 

32

 

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 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;

 

33

 

(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
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 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 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 sixty
(60) days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least twenty five percent (25%) in aggregate

 

34

 

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;

 

(d)                                 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 ninety (90) consecutive days; or

 

(e)                                  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 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.

 

(f)                                    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 occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than twenty five percent (25%) in aggregate 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, 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 (as defined in the Trust Agreement) 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

 

35

 

the Trustee as hereinafter provided in this Article V, the
Holders of a majority in aggregate 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:

 

(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 (as defined in the
Trust Agreement) 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

 

36

 

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.

 

(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

 

37

 

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.

 

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.

 

38

 

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) or Section 5.1(b),
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 (as defined in the Trust Agreement) 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.

 

39

 

SECTION 5.12.  Control by Holders.

 

The Holders of not less
than a majority in aggregate principal amount of the Outstanding 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

 

(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 or the action or
proceeding so directed may not lawfully be taken.

 

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 a majority in aggregate Liquidation
Amount (as defined in the Trust Agreement) 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

 

40

 

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.

 

SECTION 5.15.  RESERVED.

 

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.

 

41

 

(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, 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 of 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 upon which such judgment was
made;

 

(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
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 except as otherwise agreed with the Company 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 by 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

 

42

 

the notice is in the interest of holders of Securities; and provided,
that in the case of any default of the character specified in Section 5.1(c),
no such notice to Holders shall be given until at least sixty (60) 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 pursuant to this Indenture, unless such Holders 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;

 

43

 

(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 (d) or (e) 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 Event of Default unless
either (i) a Responsible Officer of the Trustee shall have actual knowledge or
(ii) the Trustee shall have received 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.

 

44

 

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 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 reasonable 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 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.

 

45

 

(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 Company and
to the retiring

 

46

 

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

 

47

 

of this 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 is one of the
Securities designated therein referred to in the within mentioned Indenture.

 

Dated:

 

48

 

	
   

  	
  [THE BANK OF NEW YORK],
  not in its individual capacity, but solely as Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Authenticating Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  	
   

  

 

ARTICLE VII

 

Holder’s 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.

 

49

 

SECTION 7.3.  Reports by Company.

 

(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, reports on Form FR Y-9C, FR Y-9LP and FR Y-6 promptly
following their filing with the Federal Reserve.

 

(b)                                 The
Company shall furnish to Trapeza Manager, Inc. (at 507 Carew Tower, 441 Vine
Street, Cincinnati, Ohio 45202, or such other address as designated by Trapeza
Manager, Inc.) 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.

 

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
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

 

50

 

Officers’ Certificate and Opinion of Counsel as conclusive evidence
that such transaction complies with this Section 8.1.

 

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 any other
provisions with respect to matters or questions arising under this Indenture,
which shall not be inconsistent with

 

51

 

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

 

(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 (as
defined in the Trust Agreement) 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

 

52

 

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.

 

(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 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.

 

53

 

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 12:00 noon,
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 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 trusts
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

 

54

 

Day and of general circulation 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 covering the preceding calendar 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 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.  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 (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 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.

 

55

 

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 shares of the Company’s capital stock,
or (ii) 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 shares of capital stock of
the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of
capital stock of the Company (or securities convertible into or exercisable for
such capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Extension Period, (B) as a result of an exchange or
conversion of any class or series of the Company’s capital stock (or any
capital stock of a Subsidiary of the Company) for any class or series of the
Company’s capital stock or of any class or series of the Company’s indebtedness
for any class or series of the Company’s capital stock, (C) the purchase of
fractional interests in shares of the Company’s capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (D) any declaration of a dividend in connection with
any Rights Plan, the issuance of rights, stock or other property under any
Rights Plan or the redemption or repurchase of rights pursuant thereto,

 

56

 

or (E) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).

 

(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
(as defined in the Trust Agreement) 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 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-8BEN (or any substitute or successor form) establishing its non-U.S. status
for U.S. federal income tax purposes.

 

ARTICLE XI

 

Redemption of Securities

 

SECTION 11.1.  Optional Redemption.

 

The Company may, at its
option, on any Interest Payment Date, on or after September 15, 2008,
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;

 

57

 

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 percent (100%) 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; 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 forty five (45) days and not more than seventy five (75) 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 not more than sixty (60) days prior to the
Redemption Date by the Trustee from the Outstanding Securities not previously
called for redemption, by 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 or each Security, 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.

 

(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

 

58

 

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 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 12:00 noon, 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

 

59

 

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 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.

 

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

 

60

 

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 any
premium 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 capital stock 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 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

 

61

 

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, 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.

 

62

 

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 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.

 

63

 

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 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 be deemed to owe any
fiduciary duty to the holders of Senior Debt and shall not be liable to any
such holders if it

 

64

 

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.

 

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.

 

* * * *

 

65

 

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

 

	
   

  	
  FIRST COMMUNITY BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mathew P. Wagner

  	
   

  
	
   

  	
   

  	
  Mathew P. Wagner

  	
   

  
	
   

  	
   

  	
  President and Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK,

  not in its individual capacity, but solely as

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Van K. Brown

  	
   

  
	
   

  	
   

  	
  Van K. Brown

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  

 

Indenture

 

66

 

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
August 29, 2003) (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 Eurodollar deposits that 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 Eurodollar deposits 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 Eurodollar deposits 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.

 

 

A-1

 

Exhibit A

 

Officer’s
Certificate

 

The undersigned, the [Chief
Financial Officer] [Treasurer] [Executive Vice President] hereby certifies,
pursuant to Section 7.3(b) of the Junior Subordinated Indenture, dated as
of September 3, 2003, among First Community Bancorp (the “Company”) and
The Bank of New York, as trustee, that, as of [date], [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 provided on page   

 

[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] ended [date],
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 operations and changes in
financial condition as of the date, and for the [    
quarter interim] [annual] period ended [date], 20   , and such
financial 

 

A-1

 

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:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  First Community Bancorp

  
	
   

  	
  120 Wilshire Blvd.

  
	
   

  	
  Santa Monica,
  California 90401

  
	
   

  	
  (31) 451-4555

  

 

A-2

 

Financial Definitions

 

	
  Report Item

  	
   

  	
  Corresponding
  FRY-9C or LP Line Items with Line

  Item corresponding Schedules

  	
   

  	
  Description
  of Calculation

  
	
  Tier 1 Risk

  Weighted Assets

  	
   

  	
  BHCK7206

  Schedule HC-R

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Double

  Leverage

  	
   

  	
  (BHCP0365)/(BCHCP3210)

  Schedule PC in the LP

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Performing

  Assets to Loans

  and OREO

  	
   

  	
  (BHCK5525-BHCK3506+BHCK5526-

  BHCK3507+BHCK2744)/(BHCK2122+BHCK2744)

  Schedules HC-C, HC-M & HC-N

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tangible

  Common Equity

  as a Percentage of

  Tangible Assets

  	
   

  	
  (BHDM3210-BHCK3163)/(BHCK2170-BHCK3163)

  

  Schedule HC

  	
   

  	
  (Equity Capital – Goodwill)/(Total Assets – Goodwill)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Reserves

  to Non-

  Performing Loans

  	
   

  	
  (BHCK3123+BHCK3128)/(BHCK5525-

  BHCK3506+BHCK5526-BHCK3507)

  

  Schedules HC & HC-N & HC-R

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Net

  Charge-Offs to

  Loans

  	
   

  	
  (BHCK4635-BHCK4605)/(BHCK3516)

  

  Schedules HC-B & HC-K

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Return on

  Average Assets

  (annualized)

  	
   

  	
  (BHCK4340/BHCK3368)

  

  Schedules HI & HC-K

  	
   

  	
  Net Income as a percentage of Assets.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Interest

  Margin

  (annualized)

  	
   

  	
  (BHCK4519)/(BHCK3515+BHCK3365+BHCK3516+BHCK3401+BHCKB985)

  

  Schedules HI Memorandum and HC-K

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Efficiency Ratio

  	
   

  	
  (BHCK4093)/(BHCK4519+BHCK4079)

  

  Schedule HI

  	
   

  	
  (Non-interest Expense)/(Net Interest Income Fully Taxable Equivalent,
  if available, plus Non-interest Income)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Loans to

  Assets

  	
   

  	
  (BHCKB528+BHCK5369)/(BHCK2170)

  

  Schedule HC

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ratio of Loans to

  Deposits

  	
   

  	
  (BHCKB528+BHCK5369)/(BHDM6631+BHDM6636+BHFN6631+BHFN6636)

  

  Schedule HC

  	
   

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

  

 

1

 

	
  Total Assets

  	
   

  	
  (BHCK2170)

  

  Schedule HC

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Income

  	
   

  	
  (BHCK4300)

  

  Schedule HI

  	
   

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

  

 

2Exhibit
10.3

 

AMENDED AND RESTATED

REVOLVING CREDIT AGREEMENT

 

Dated as of
August 15, 2003

 

This Amended and Restated Revolving Credit Agreement
(this “Agreement”) is by and between FIRST COMMUNITY BANCORP, a
corporation formed under the laws of the State of California (“Borrower”),
and THE
NORTHERN TRUST COMPANY, an Illinois banking corporation (“Lender”),
with a banking office at 50 South LaSalle Street, Chicago, Illinois  60675.

 

RECITALS

 

WHEREAS,
Borrower and Lender entered into a Revolving Credit Agreement dated as of
June 26, 2000, as amended by a First Amendment thereto dated as of
January 12, 2001, a Second Amendment and Waiver thereto dated as of
June 25, 2001, a Third Amendment and Waiver thereto dated as of
February 12, 2002 and a Fourth Amendment and Waiver thereto dated as of
February 11, 2003 (said Revolving Credit Agreement, as amended, the “Prior
Credit Agreement”);

 

WHEREAS,
pursuant to the Prior Credit Agreement, Lender has made certain revolving loans
(collectively, the “Prior Loans”) to Borrower which Prior Loans are
evidenced by that certain Revolving Credit Note of Borrower dated as of
February 12, 2002 in the original principal amount of $12,500,000 (the “Prior
Note”);

 

WHEREAS,
all obligations of Borrower under the Prior Credit Agreement have been secured
by that certain Pledge Agreement dated as of June 26, 2000, as amended by
a First Amendment thereto dated as of January 12, 2001, a Second Amendment
thereto dated as of February 12, 2002 and a Third Amendment thereto dated
as of February 11, 2003 (said Pledge Agreement, as amended, the “Prior
Pledge Agreement”); and

 

WHEREAS,
Borrower and Lender desire that, on the terms and conditions herein,
(i) the Prior Credit Agreement be amended and restated into this
Agreement, (ii) the Prior Loans be converted into Loans (as defined
hereinafter) under this Agreement, (iii) the Prior Note be amended and
restated into the Note (as defined hereinafter) and all outstanding Prior Loans
thereunder as of the date hereof be continuing and deemed outstanding under the
Note, (iv) Lender make available its Commitment (as defined hereinafter)
to Borrower pursuant to which Borrower may request Loans and (v) the Prior
Pledge Agreement be amended and restated into the Pledge Agreement (as defined
hereinafter) and the pledge of, and security interest granted in, certain
collateral under the Prior Pledge Agreement continue under the Pledge
Agreement, except for any such collateral expressly released by Lender;

 

NOW,
THEREFORE, in consideration of the premises, the following
mutual agreements and for other good and valuation consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree that
the Prior Credit Agreement be amended and restated to read in its entirety, as
follows:

 

 

SECTION 1.  LOANS

 

SECTION 1.1.                                         RESTRUCTURING.  On the date that all of the conditions in Section 6.1
of this Agreement are satisfied, and at the time on such date that the
restructuring contemplated by this Agreement occurs, (a) the Prior Loans
shall be converted into Loans under this Agreement and be evidenced by the
Note, (b) the security interests and liens granted by Borrower under the
Prior Pledge Agreement and the documents delivered in connection therewith
shall continue in full force and effect under the Pledge Agreement.  None of the Prior Loans shall be deemed to
have been repaid as a result of the restructuring described in this Section 1.1.  None of the liens of Borrower granted to
Lender pursuant to the Prior Pledge Agreement shall be terminated as a result
of the restructuring described in this Section 1.1 except as
otherwise expressly released by Lender.

 

SECTION 1.2.                                         REVOLVING
CREDIT LOANS.  Subject to
the terms and conditions of this Agreement, Lender agrees to make loans to
Borrower, from time to time from the date of this Agreement through
August 14, 2004 (the “Maturity Date”), at such times and in such
amounts, not to exceed TWELVE MILLION FIVE HUNDRED THOUSAND AND NO/100 UNITED
STATES DOLLARS ($12,500,000.00) (the “Commitment”) at any one time
outstanding, as Borrower may request (the “Loan(s)”).  During such period Borrower may borrow,
repay and reborrow hereunder.  Each
borrowing shall be in the amount of at least $100,000 or the remaining unused
amount of the Commitment.

 

SECTION 1.3.                                         REVOLVING
CREDIT NOTE.  The Loans
shall be evidenced by a promissory note (the “Note”), substantially in
the form of Exhibit A, with appropriate insertions, dated the date
hereof, payable to the order of Lender and in the original principal amount of
the Commitment.  Lender may at any time
and from time to time at Lender’s sole option attach a schedule (grid) to
the Note and endorse thereon notations with respect to each Loan specifying the
date and principal amount thereof, the Interest Period (as defined below) (if
applicable), the applicable interest rate and rate option, and the date and
amount of each payment of principal and interest made by Borrower with respect
to each such Loan.  Lender’s
endorsements as well as its records relating to the Loans shall be rebuttably
presumptive evidence of the outstanding principal and interest on the Loans,
and, in the event of inconsistency, shall prevail over any records of Borrower
and any written confirmations of the Loans given by Borrower.  The principal of the Note shall be payable
on or before the Maturity Date. 

 

SECTION 1.4.                                         EXTENSION OF MATURITY DATE.  Borrower may request an extension of the
Maturity Date by submitting a request for an extension to Lender (an “Extension
Request”) no more than sixty (60) days prior to the current Maturity
Date.  The Extension Request must
specify the new Maturity Date requested by Borrower and the date (which must be
at least thirty (30) days after the Extension Request is delivered to Lender)
as of which Lender must respond to the Extension Request (the “Extension
Date”).  The new Maturity Date shall
be no more than 364 days after the Maturity Date in effect at the time the
Extension Request is received, including such Maturity Date as one of the days
in the calculation of the days elapsed. 
Promptly upon receipt of an Extension Request, Lender shall endeavor in
good faith to notify the

 

2

 

Other Banks (as hereinafter defined) of the contents
thereof (provided it shall not be liable to Borrower, the Other Banks, or any
other Person for its failure to do so). 
If Lender fails to respond to an Extension Request by the Extension
Date, Lender shall be deemed to have denied the Extension Request.  If Lender, in its sole discretion, decides
to approve the Extension Request, Lender shall deliver its written consent to
Borrower, and endeavor in good faith to notify the Other Banks of such
extension no later than the Extension Date (provided it shall not be liable to
Borrower, the Other Banks, or any other Person for its failure to do so).  If and only if the consent of each of the
Other Banks to the same new Maturity Date is received by Borrower and Lender on
or before the Extension Date, the Maturity Date specified in the Extension
Request shall become effective at the expiration of the existing Maturity Date.

 

SECTION 2.  INTEREST AND FEES

 

SECTION 2.1.                                         INTEREST
RATE.  Borrower agrees to
pay interest on the unpaid principal amount of the Loans from time to time
outstanding hereunder at the following rates per year:

 

(a)                                  Before
maturity of any Loan, whether by acceleration or otherwise, at the option of
Borrower, subject to the terms hereof at a rate equal to:

 

(i)                                     The
“Prime-Based Rate,” which shall mean the Prime Rate (as hereinafter
defined) minus seventy-five hundredths of one percent (-0.75%) per annum;

 

(ii)                                  “LIBOR,”
which shall mean the sum of (A) that fixed rate of interest per year for
deposits with Interest Periods of 1, 3 or 6 months (which Interest Period
Borrower shall select subject to the terms stated herein) in United States
Dollars offered to Lender in or through the London interbank market at or about
10:00 A.M., London time, two days (during which banks are generally open in
both Chicago and London) before the rate is to take effect in an amount
corresponding to the amount of the requested Loan or portion thereof and for
the London deposit Interest Period requested, divided  by one
minus any applicable reserve requirement (expressed as a decimal) on Eurodollar
deposits of the same amount and Interest Period as determined by Lender in its
sole discretion, plus (B) one and one-half percent (+1.50%) per annum;
or

 

(iii)                               “Federal Funds Rate,”
which shall mean the sum of (A) the weighted average of the rates on overnight
Federal funds transactions, with members of the Federal Reserve System only,
arranged by Federal funds brokers, plus (B) one and one-half percent
(1.50%) per annum.  The Federal Funds
Rate shall be determined by Lender on the basis of reports by Federal funds
brokers to, and published daily by, the Federal Reserve Bank of New York in the
Composite Closing Quotations for U.S. Government Securities.  If such publication is unavailable or the
Federal Funds Rate is not set forth therein, the Federal Funds Rate shall be
determined on the basis of any other source reasonably selected by Lender.  The Federal Funds Rate applicable each day
shall be the Federal Funds Rate reported as applicable to Federal funds
transactions on that date.  In the case
of Saturday, Sunday or a legal holiday, the Federal Funds Rate shall be the
rate

 

3

 

applicable to Federal funds transactions on the
immediately preceding day for which the Federal Funds Rate is reported.

 

(b)                                 After
the maturity of any Loan, whether by acceleration or otherwise, such Loan shall
bear interest until paid at a rate equal to two percent (2%) in addition to the
rate in effect immediately prior to maturity (but not less than the Prime-Based
Rate in effect at maturity).

 

SECTION 2.2.                                         RATE
SELECTION.  Borrower shall
select and change its selection of the interest rate as among LIBOR, the
Federal Funds Rate and the Prime-Based Rate, as applicable, to apply to at
least $100,000 and in integral multiples of $100,000 thereafter of any Loan or
portion thereof, subject to the requirements herein stated:

 

(a)                                  At
the time any Loan is made;

 

(b)                                 At
the expiration of a particular LIBOR Interest Period selected for the
outstanding principal balance of any Loan or portion of any Loan currently
bearing interest at LIBOR; and 

 

(c)                                  At
any time for the outstanding principal balance of any Loan or portion thereof
currently bearing interest at the Prime-Based Rate or the Federal Funds Rate.

 

SECTION 2.3.                                         RATE CHANGES AND NOTIFICATIONS.

 

(a)                                  LIBOR.  If Borrower wishes to borrow funds at LIBOR
or Borrower wishes to change the rate of interest on any Loan or portion
thereof, within the limits described above, from any other rate to LIBOR, it
shall, at or before 12:00 noon, Chicago time, not less than two Banking Days of
Lender prior to the Banking Day of Lender on which such rate is to take effect,
give Lender written notice thereof, which shall be irrevocable.  Such notice shall specify the Loan or portion
thereof to which LIBOR is to apply, and, in addition, the desired LIBOR
Interest Period of 1, 3 or 6 months (but not to exceed the Maturity Date).

 

(b)                                 Federal
Funds Rate or Prime-Based Rate.  If
Borrower wishes to borrow funds at the Federal Funds Rate or the Prime-Based
Rate or to change the rate of interest on any Loan or any portion thereof, to
such rate, it shall, at or before l2:00 noon, Chicago time, on the date such
borrowing or change is to take effect, which shall be a Banking Day of Lender,
give Lender written notice thereof, which shall be irrevocable.  Such notice shall specify the advance and
the desired interest rate option.

 

(c)                                  Failure
to Notify.  If Borrower does not
notify Lender at the expiration of a selected Interest Period with respect to
any principal outstanding at LIBOR, then in the absence of such notice Borrower
shall be deemed to have elected to have such principal accrue interest after
the respective LIBOR Interest Period at the Federal Funds Rate.  If Borrower does not notify Lender as to its
selection of the interest rate option with respect to any new Loan, then in the
absence of such notice Borrower shall be deemed to have elected to have such
initial advance accrue interest at the Federal Funds Rate.

 

4

 

SECTION 2.4.                                         INTEREST PAYMENT DATES.  Accrued interest shall be paid in respect of
each portion of principal to which the Federal Funds Rate or Prime-Based Rate
applies on the last day of each month in each year, beginning with the first of
such dates to occur after the date of the first Loan or portion thereof, at
maturity, and upon payment in full, and to each portion of principal to which
any other interest rate option applies, the end of each respective Interest
Period, every three months, at maturity, and upon payment in full, whichever is
earlier or more frequent.  After
maturity, interest shall be payable upon demand.

 

SECTION 2.5.                                         ADDITIONAL PROVISIONS WITH
RESPECT TO FEDERAL FUNDS RATE AND LIBOR LOANS.

 

The selection by Borrower of the Federal Funds Rate or
LIBOR and the maintenance of the Loans or portions thereof at such rate shall
be subject to the following additional terms and conditions:

 

(a)                                  Availability
of Deposits at a Determinable Rate. 
If, after Borrower has elected to borrow or maintain any Loan or portion
thereof at the Federal Funds Rate or LIBOR, Lender notifies Borrower that:

 

(i)                                     United
States dollar deposits in the amount and for the maturity requested are not
available to Lender (in the case of LIBOR, in the London interbank market); or

 

(ii)                                  Reasonable
means do not exist for Lender to determine the Federal Funds Rate or LIBOR for
the amount and maturity requested; all as determined by Lender in its sole
discretion, then the principal subject to the Federal Funds Rate or LIBOR shall
accrue or shall continue to accrue interest at the Prime-Based Rate.

 

(b)                                 Prohibition
of Making, Maintaining, or Repayment of Principal at the Federal Funds Rate or
LIBOR.  If any treaty, statute,
regulation, interpretation thereof, or any directive, guideline, or otherwise
by a central bank or fiscal authority (whether or not having the force of law)
shall either prohibit or extend the time at which any principal subject to the
Federal Funds Rate or LIBOR may be purchased, maintained, or repaid, then on
and as of the date the prohibition becomes effective, the principal subject to
that prohibition shall continue at the Prime-Based Rate.

 

(c)                                  Payments
of Principal and Interest to be Inclusive of Any Taxes or Costs.  All payments of principal and interest shall
include any taxes and costs incurred by Lender resulting from having principal
outstanding hereunder at the Federal Funds Rate or LIBOR.  Without limiting the generality of the
preceding obligation, illustrations of such taxes and costs are:

 

(i)                                     Taxes
(or the withholding of amounts for taxes) of any nature whatsoever including
income, excise, and interest equalization taxes (other than income taxes
imposed by the United States or any state or locality thereof on the income of
Lender), as well as all levies, imposts, duties, or fees whether now in
existence or

 

5

 

resulting from a change in, or promulgation of, any
treaty, statute, regulation, interpretation thereof, or any directive,
guideline, or otherwise, by a central bank or fiscal authority (whether or not
having the force of law) or a change in the basis of, or time of payment of,
such taxes and other amounts resulting therefrom;

 

(ii)                                  Any
reserve or special deposit requirements against assets or liabilities of, or
deposits with or for the account of, Lender with respect to principal
outstanding at LIBOR including those imposed under Regulation D of the Federal
Reserve Board or resulting from a change in, or the promulgation of, such
requirements by treaty, statute, regulation, interpretation thereof, or any
directive, guideline, or otherwise by a central bank or fiscal authority
(whether or not having the force of law);

 

(iii)                               Any other costs
resulting from compliance with treaties, statutes, regulations, interpretations,
or any directives or guidelines, or otherwise by a central bank or fiscal
authority (whether or not having the force of law), including capital adequacy
regulations;

 

(iv)                              Any
loss (including loss of anticipated profits) or expense incurred by reason of
the liquidation or re-employment of deposits acquired by Lender:

 

(A)                              To
make Loans or a portion thereof or maintain principal outstanding at the LIBOR
or the Federal Funds Rate; 

 

(B)                                As
the result of a voluntary prepayment at a date other than the Interim Maturity
Date selected for principal outstanding at LIBOR; 

 

(C)                                As
the result of a mandatory repayment at a date other than that Interim Maturity
Date selected for principal outstanding at LIBOR as the result of the
occurrence of an Event of Default and the acceleration of any portion of the
indebtedness hereunder; or

 

(D)                               As
the result of a prohibition on making, maintaining, or repaying principal
outstanding at the Federal Funds Rate or LIBOR.

 

If Lender incurs any such taxes or costs, Borrower,
upon demand in writing specifying such taxes and costs, shall promptly pay
them; save for manifest error Lender’s specification shall be presumptively
deemed correct.

 

SECTION 2.6.                                         BASIS
OF COMPUTATION.  Interest
shall be computed for the actual number of days elapsed on the basis of a year
consisting of 360 days, including the date a Loan is made and excluding the
date a Loan or any portion thereof is paid or prepaid.

 

SECTION 2.7.                                         COMMITMENT
FEE, REDUCTION OF COMMITMENT. 
Borrower agrees to pay Lender a commitment fee (the “Commitment Fee”)
in arrears of twenty-five hundredths of one percent (0.25%) per year on the
average daily unused amount of the

 

6

 

Commitment. 
The Commitment Fee shall commence to accrue on the date of this
Agreement and shall be paid on the last day of each calendar quarter in each
year, beginning with the first of such dates to occur after the date of this
Agreement, at maturity and upon payment in full.  At any time or from time to time, upon at least ten days’ prior
written notice, which shall be irrevocable, Borrower may reduce the Commitment
in the amount of at least $100,000 or in full; provided that Borrower may not
reduce the Commitment below an amount equal to the aggregate outstanding
principal amount of all Loans.  Upon any
such reduction of any part of the unused Commitment, any accrued and unpaid
Commitment Fee on the part reduced shall be paid in full as of the date of such
reduction.

 

SECTION 3.  PAYMENTS AND PREPAYMENTS

 

SECTION 3.1.                                         PREPAYMENTS.  Borrower may prepay without penalty or
premium any principal bearing interest at the Prime-Based Rate or the Federal
Funds Rate.  If Borrower prepays any
principal bearing interest at LIBOR in whole or in part on a date other than
the Interim Maturity Date, or if the maturity of any such LIBOR principal is
accelerated, then, to the fullest extent permitted by law Borrower shall also
pay Lender for all losses and expenses incurred by reason of the liquidation or
re-employment of deposits acquired by Lender to make the Loan or maintain
principal outstanding at LIBOR.  Upon
Lender’s demand in writing specifying such losses and expenses, Borrower shall
promptly pay them; Lender’s specification shall be deemed correct in the absence
of manifest error.  All Loans or
portions thereof made at LIBOR shall be conclusively deemed to have been funded
by or on behalf of Lender (in the London interbank market) by the purchase of
deposits corresponding in amount and maturity to the amount and Interest
Periods selected (or deemed to have been selected) by Borrower under this
Agreement.  Any partial repayment or
prepayment shall be in an amount equal to the lesser of $500,000 and the
outstanding principle balance of the Loans.

 

SECTION 3.2.                                         FUNDS.  All payments of principal, interest and the
Commitment Fee shall be made in immediately available funds to Lender at its
banking office indicated above or as otherwise directed by Lender. 

 

SECTION 3.3.                                         EQUAL ACTIONS.  Borrower agrees that (a) each
borrowing from Lender under Section 1.2 of this Agreement and from
the Other Banks under the Other Bank Agreements, (b) each payment of the
Commitment Fee under Section 2.7 of this Agreement to Lender and
under the Other Bank Agreements to the Other Banks and (c) each reduction
of the Commitment under Section 2.7 of this Agreement and the
commitments of the Other Banks under the Other Banks Agreements shall be made
on a pro rata basis among Lender and the Other Banks and at substantially the
same time.  The making, conversion and
continuation of Loans hereunder and under the Other Bank Agreements shall be
made ratably and at substantially the same time and Interest Periods for LIBOR
Loans hereunder and under the Other Bank Agreement made on the same Banking Day
shall be coterminous.  Each payment or
prepayment of principal by Borrower shall be made for the account of Lender and
the Other Banks ratably and at substantially the same time.  Each payment of interest on the Loans to
Lender and on loans to the Other Banks shall be made for the account of Lender
and the Other Banks ratably in accordance with the amounts of interest due and
payable to Lender and the Other Banks and at substantially the same time.  Notwithstanding any of the foregoing, Lender

 

7

 

acknowledges and agrees to the one time closing fee of
$43, 750 to be paid by Borrower to the Other Banks as of the date of this
Agreement.  

 

SECTION 4.  REPRESENTATIONS AND WARRANTIES

 

To induce Lender to make each of the Loans, Borrower
represents and warrants to Lender that:

 

SECTION 4.1.                                         ORGANIZATION.  Borrower is existing and in good standing as
a duly qualified and organized bank holding company.  Borrower and each Subsidiary (as hereinafter defined) are existing
and in good standing under the laws of their jurisdiction of formation, and are
duly qualified, in good standing and authorized to do business in each
jurisdiction where failure to do so might have a material adverse impact on the
consolidated assets, condition or prospects of Borrower.  Borrower and each Subsidiary have the power
and authority to own their properties and to carry on their businesses as now
being conducted.

 

SECTION 4.2.                                         AUTHORIZATION;
NO CONFLICT.  The execution,
delivery and performance of this Agreement, the Pledge Agreement, the Note and
all related documents and instruments: 
(a) are within Borrower’s powers; (b) have been authorized by all
necessary corporate action; (c) have received any and all necessary
governmental approvals; and (d) do not and will not contravene or conflict with
any provision of law or charter or by-laws of Borrower or any agreement
affecting Borrower or its property. 
This Agreement and the Pledge Agreement are, and the Note when executed
and delivered will be, legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms.

 

SECTION 4.3.                                         FINANCIAL
STATEMENTS.  Borrower has
supplied to Lender copies of its audited consolidated financial statements as
of and for the twelve month period ended December 31, 2002.  Such statements have been furnished to
Lender, have been prepared in conformity with generally accepted accounting
principles applied on a basis consistent with that of the preceding fiscal
year, except as disclosed in such statements, and fairly present the financial
condition of Borrower and its Subsidiaries as at such dates and the results of
their operations for the respective periods then ended.  Since the date of those financial
statements, no material, adverse change in the business, condition, properties,
assets, operations, or prospects of Borrower or its Subsidiaries has occurred
except as disclosed on Schedule 4.3.  There is no known contingent liability of Borrower or any
Subsidiary which is known to be in an amount that is more than $1,000,000
(excluding loan commitments, letters of credit, and other contingent
liabilities incurred in the ordinary course of the banking business) in excess
of insurance for which the insurer has confirmed coverage in writing which is
not reflected in such financial statements or disclosed on Schedule 4.3.

 

SECTION 4.4.                                         TAXES.  Borrower and each Subsidiary have filed or
caused to be filed all federal, state and local tax returns which, to the
knowledge of Borrower or such Subsidiary, are required to be filed, and have
paid or have caused to be paid all taxes as shown on such returns or on any
assessment received by them, to the extent that such taxes have become due
(except for current taxes not delinquent and taxes being contested in good
faith and by appropriate proceedings for which adequate reserves have been
provided on the books of

 

8

 

Borrower or the appropriate Subsidiary, and as to
which no foreclosure, sale or similar proceedings have been commenced).

 

SECTION 4.5.                                         LIENS.  None of the assets of Borrower or any
Subsidiary are subject to any mortgage, pledge, title retention lien, or other
lien, encumbrance or security interest except: 
(a) for current taxes not delinquent or taxes being contested in
good faith and by appropriate proceedings; (b) for liens arising in the
ordinary course of business for sums not due or sums being contested in good
faith and by appropriate proceedings, but not involving any deposits or loan or
portion thereof or borrowed money or the deferred purchase price of property or
services; (c) to the extent specifically shown in the financial statements
referred to in Section 4.3; (d) for liens in favor of the
Collateral Agent, for the benefit of Lender and the Other Banks; and (e) liens
and security interests securing deposits of public funds, repurchase
agreements, Federal funds purchased, trust assets, advances from a Federal Home
Loan Bank, discount window borrowings from a Federal Reserve Bank and other
similar liens granted in the ordinary course of the banking business.

 

SECTION 4.6.                                         ADVERSE
CONTRACTS.  Neither Borrower
nor any Subsidiary is a party to any agreement or instrument or subject to any
charter or other corporate restriction, nor is it subject to any judgment,
decree or order of any court or governmental body, which may have a material
and adverse effect on the business, assets, liabilities, financial condition,
operations or business prospects of Borrower and its Subsidiaries taken as a
whole or on the ability of Borrower to perform its obligations under this
Agreement, the Pledge Agreement, the Note and the Other Bank Agreements.  Neither Borrower nor any Subsidiary has, nor
with reasonable diligence should have had, knowledge of or notice that it is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any such agreement,
instrument, restriction, judgment, decree or order.

 

SECTION 4.7.                                         REGULATION
U.  Borrower is not engaged
principally in, nor is one of Borrower’s important activities, the business of
extending credit for the purpose of purchasing or carrying “margin stock”
within the meaning of Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereinafter in effect.

 

SECTION 4.8.                                         LITIGATION
AND CONTINGENT LIABILITIES. 
No litigation (including derivative actions), arbitration proceedings or
governmental proceedings are pending or, to Borrower’s knowledge, threatened
against Borrower which would (singly or in the aggregate), if adversely
determined, have a material and adverse effect on the consolidated assets,
financial condition, continued operations or business of Borrower and its
Subsidiaries, except as and if set forth (including estimates of the dollar
amounts involved) in Schedule 4.8.

 

SECTION 4.9.                                         FDIC
INSURANCE.  The deposits of
each Subsidiary Bank of Borrower are insured by the FDIC and no act has
occurred which would adversely affect the status of such Subsidiary Bank as an
FDIC insured bank.

 

SECTION 4.10.                                  INVESTIGATIONS.  Neither Borrower nor any Subsidiary
Bank is under investigation by, or is operating under the restrictions imposed
by or agreed to in connection with, any regulatory authority, other than
routine examinations by regulatory authorities having jurisdiction over
Borrower or such Subsidiary Bank.

 

9

 

SECTION 4.11.                                  SUBSIDIARIES.  Attached hereto as Schedule 4.11
is a correct and complete list of all Subsidiaries of Borrower.

 

SECTION 4.12.                                  BANK HOLDING COMPANY.
Borrower has complied in all material respects with all federal, state and
local laws pertaining to bank holding companies, including without limitation
the Bank Holding Company Act of 1956, as amended, and to the best of its
knowledge there are no conditions to its engaging in the business of being a
registered bank holding company.

 

SECTION 4.13.                                  ERISA.

 

(a)                                  Borrower
and the ERISA Affiliates and the plan administrator of each Plan (other than a
Multiemployer Plan) have fulfilled in all material respects their respective
obligations under ERISA and the Code with respect to such Plan and such Plan is
currently in substantial compliance with the applicable provisions of ERISA and
the Code.

 

(b)                                 With
respect to each Plan, there has been no (i) “reportable event” within the
meaning of Section 4043 of ERISA and the regulations thereunder which is
not subject to the provision for waiver of the 30-day notice requirement to the
PBGC; (ii) failure by Borrower or any ERISA Affiliate to timely make or
properly accrue any contribution which is due to any Plan; (iii) action
under Section 4041(c) of ERISA to terminate any Pension Plan;
(iv) action under Section 4041(b) of ERISA to terminate any Pension
Plan which could require Borrower to incur a liability or obligations to make a
material contribution to such Pension Plan; (v) withdrawal from any Pension
Plan with two or more contributing sponsors or the termination of any such
Pension Plan that could subject the Borrower to material liability pursuant to
Section 4063 or 4064 of ERISA; (vi) institution by PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which might constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan (other than a
Multiemployer Plan); (vii) the imposition on Borrower or any ERISA Affiliate of
liability pursuant to Sections 4062(e), 4069 or 4212 of ERISA; (viii) complete
or partial withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) by Borrower or any ERISA Affiliate from any Pension Plan which is a
Multiemployer Plan that is in reorganization or insolvency pursuant to
Sections 4241 or 4245 of ERISA, or that has terminated under
Sections 4041A or 4042 of ERISA; (ix) prohibited transaction
described in Section 406 of ERISA or 4975 of the Code which could subject
Borrower to the imposition of any material fines, penalties, taxes or related
charges imposed by either Section 4975 of the Code or Section 502(i)
of ERISA; (x) material pending claim (other than routine claims for
benefits) against any Plan (other than a Multiemployer Plan) which could
reasonably be expected to result in material liability; (xi) receipt from the
Internal Revenue Service of notice of the failure of any Plan (other than a
Multiemployer Plan) to qualify under Section 401(a) of the Code, or the
failure of any trust forming part of any Plan (other than a Multiemployer Plan)
to fail to qualify for exemption from taxation under Section 501(a) of the
Code, if applicable; or (xii) imposition of a lien pursuant to
Section 401(a)(29) or 412(n) of the Code or Section 302(f) of ERISA.

 

10

 

SECTION 4.14.                                  ENVIRONMENTAL LAWS.

 

(a)                                  Borrower
and each of its Subsidiaries have obtained all permits, licenses and other
authorizations which are required to be obtained by Borrower or such
Subsidiaries, as the case may be, under all Environmental Laws and are in compliance
in all material respects with any applicable Environmental Laws.

 

(b)                                 Borrower
has not received any notice, demand, request for information, citation,
summons, order or complaint, no penalty has been assessed and no investigation
or review is pending or, to Borrower’s knowledge, threatened by any
governmental agency or other Person, in each case, with respect to any alleged
or suspected failure by Borrower or any of its Subsidiaries to comply in any
material respect with any Environmental Laws.

 

(c)                                  There
are no material liens arising under or pursuant to any Environmental Laws on
any of the property owned or, to Borrower’s knowledge, leased by Borrower or
any of its Subsidiaries.

 

(d)                                 There
are no conditions existing currently or, to Borrower’s knowledge, likely to
exist during the term of this Agreement which would subject Borrower or any of
its Subsidiaries or any of their owned property or, to Borrower’s knowledge,
any of their leased property, to any material lien, damages, penalties,
injunctive relief or cleanup costs under any Environmental Laws or which
require or are reasonably likely to require cleanup, removal, remedial action
or other responses pursuant to Environmental Laws by Borrower and its
Subsidiaries.

 

SECTION 4.15.                                  PLEDGED SHARES.  The Pledged Shares (as hereinafter defined)
constitute 100% of the issued and outstanding capital stock of Pacific Western
National Bank, have been duly authorized and validly issued and are fully paid
and non-assessable.  Borrower owns the
Pledged Shares free and clear of all other interests, liens or encumbrances of
any nature whatsoever, other than liens in favor of Lender and the Other Banks.

 

SECTION 5.  COVENANTS

 

Until all obligations of Borrower hereunder, under the
Pledge Agreement, the Note and all other related documents and instruments are
paid and fulfilled in full, Borrower agrees that it shall, and shall cause each
Subsidiary to, comply with the following covenants, unless Lender consents
otherwise in writing:

 

SECTION 5.1.                                         EXISTENCE,
MERGERS, ETC.  Borrower and
each Subsidiary shall preserve and maintain their respective corporate,
partnership or joint venture (as applicable) existence, rights, franchises,
licenses and privileges, and will not liquidate, dissolve, or merge, or
consolidate with or into any other entity, or sell, lease, transfer or
otherwise dispose of all or a substantial part of their assets other than in
the ordinary course of business as now conducted, except that:

 

11

 

(a)                                  Any
Subsidiary may merge or consolidate with or into Borrower or any one or more
wholly-owned Subsidiaries;

 

(b)                                 Any
Subsidiary may sell, lease, transfer or otherwise dispose of any of its assets
to Borrower or one or more wholly-owned Subsidiaries; 

 

(c)                                  Any
Insignificant Subsidiary may (i) merge or consolidate with any other Person,
(ii) sell, lease, transfer or otherwise dispose of its assets to another Person
or (iii) liquidate or dissolve (“Insignificant Subsidiary” means a
Subsidiary with (1) net income that is less than 2.5% of the consolidated net
income of Borrower and its Subsidiaries for the most recent fiscal quarter
ended for which a consolidated income statement of Borrower is available and
(2) tangible assets that are less than 2.5% of consolidated tangible
assets of Borrower and its Subsidiaries as of the end of the most recent fiscal
quarter ended for which a consolidated balance sheet of Borrower is available);
and

 

(d)                                 Any
Subsidiary may merge or consolidate with any other Person provided that
(i) the surviving entity is a Subsidiary of Borrower (ii) before and
after giving effect to such merger or consolidation, no Event of Default or
Unmatured Event of Default exists or is continuing, (iii) following such
merger or consolidation, Borrower shall continue to own the same or greater
percentage of the stock or other ownership interests of such Subsidiary as it
owned immediately prior to such merger or consolidation, (iv) after giving
effect to such merger or consolidation, Borrower is in pro forma compliance
with Section 5.4 of this Agreement and (v) if any Subsidiary
who is a party to such merger or consolidation is a Subsidiary whose shares of
capital stock constitute Pledged Shares under the Pledge Agreement, then after
giving effect to such merger or consolidation, Lender shall continue to have a
perfected first priority security interest in such Pledged Shares subject only
to any liens permitted in Section 5.5(b) hereof; provided, however,
this clause (d) shall not apply to any Insignificant Subsidiary.

 

Borrower and each Subsidiary shall take all steps to
become and remain duly qualified, in good standing and authorized to do
business in each jurisdiction where failure to do so might have a material
adverse impact on the consolidated assets, condition or prospects of Borrower.

 

SECTION 5.2.                                         REPORTS,
CERTIFICATES AND OTHER INFORMATION.  Borrower shall furnish (or cause to be
furnished) to Lender:

 

(a)                                  Interim
Reports.  Within forty-five (45)
days after the end of each quarter of each fiscal year of Borrower, a copy of
an unaudited financial statement of Borrower and its Subsidiaries prepared on a
consolidated basis consistent with the consolidated financial statements of
Borrower and its Subsidiaries referred to in Section 4.3 above and
prepared in accordance with generally accepted accounting principles, signed by
an authorized officer of Borrower and consisting of at least:  (i) a balance sheet as at the close of such
quarter; and (ii) a statement of earnings and source and application of funds for
such quarter and for the period from the beginning of such fiscal year to the
close of such quarter.

 

12

 

(b)                                 Annual
Report.  Within ninety (90) days
after the end of each fiscal year of Borrower, a copy of an annual report of
Borrower and its Subsidiaries prepared on a consolidated basis and in
conformity with generally accepted accounting principles applied on a basis
consistent with the consolidated financial statements of Borrower and its
Subsidiaries referred to in Section 4.3 above, duly certified by
independent certified public accountants of recognized standing and accompanied
by an opinion without qualification. 
Such independent certified public accountants shall be selected by the Audit
Committee of the Board of Directors of Borrower (which Audit Committee members
shall consist solely of independent members of Borrower’s Board of Directors)
using their good faith business judgment.

 

(c)                                  Certificates.  Contemporaneously with the furnishing of a
copy of each annual report and of each quarterly statement provided for in this
Section, a certificate dated the date of such annual report or such quarterly
statement and signed by either the President, the Chief Financial Officer or
the Treasurer of Borrower, to the effect that no Event of Default or Unmatured
Event of Default has occurred and is continuing, or, if there is any such
event, describing it and the steps, if any, being taken to cure it, and
containing (except in the case of the certificate dated the date of the annual
report) a computation of, and showing compliance with, any financial ratio or
restriction contained in this Agreement.

 

(d)                                 Reports
to SEC.  Notification of each filing
and report made by Borrower or any Subsidiary with or to any securities
exchange or the Securities and Exchange Commission which are made publicly
available.  Such notification shall be
forwarded electronically to Lender via e-mail at such addresses as Lender shall
provide to Borrower and shall indicate where copies of such filings and reports
can be obtained electronically (for avoidance of doubt, Borrower will notify
Lender of any such filings and reports if electronic means of notification is
inoperable).  If copies of such documents
are not available electronically, notification of the filing of such documents
shall still be made, and Borrower shall provide a paper copy of such documents
to Lender promptly upon Lender’s request.

 

(e)                                  Notice
of Default, Litigation and ERISA Matters. 
Immediately upon learning of the occurrence of any of the following,
written notice describing the same and the steps being taken by Borrower or any
Subsidiary affected in respect thereof: 
(i) the occurrence of an Event of Default or an Unmatured Event of
Default; (ii) the institution of, or any adverse determination in, any
litigation, arbitration or governmental proceeding which is material to
Borrower and its Subsidiaries on a consolidated basis; (iii) the occurrence of
any event referred to in Section 4.13(b); or (iv) the issuance of any
cease and desist order, memorandum of understanding, cancellation of insurance,
or proposed disciplinary action from the FDIC or other regulatory entity. 

 

(f)                                    Other
Bank Agreements.  Promptly, copies
of any amendment, supplement, waiver or other agreement affecting any Other
Bank Agreement and any copies of any notices given by Borrower or the Other
Banks under the Other Bank Agreements, in each case certified by the secretary
or assistant secretary.

 

13

 

(g)                                 Other
Information.  From time to time such
other information, financial or otherwise, concerning Borrower or any
Subsidiary as Lender may reasonably request.

 

SECTION 5.3.                                         INSPECTION.  At Borrower’s expense if an Event of Default
or Unmatured Event of Default has occurred or is continuing, Borrower and each
Subsidiary shall permit Lender and its agents at any time during normal
business hours, and upon at least one business day’s prior notice, to inspect
their properties and to inspect and make copies of their books and
records.  If no Event of Default or
Unmatured Event of Default shall have occurred and be continuing, Lender may
conduct such inspections at any time during normal business hours and upon
reasonable notice to Borrower, and such inspection and copies shall be at
Lender’s expense.

 

SECTION 5.4.                                         FINANCIAL REQUIREMENTS.

 

(a)                                  Leverage
Ratio.  Borrower and each Subsidiary
Bank shall maintain at all times a ratio of Tier 1 Capital to average quarterly
assets less all non-qualified intangible assets of at least five percent (5%),
all calculated on a consolidated basis. 

 

(b)                                 Tier
1 Capital Ratio.  Borrower and each
Subsidiary Bank shall maintain at all times a ratio of Tier 1 Capital to
risk-weighted assets of not less than six percent (6%), all calculated on a
consolidated basis.

 

(c)                                  Risk-Based
Capital Ratio.  Borrower and each
Subsidiary Bank shall maintain at all times a ratio of Total Capital to
risk-weighted assets of not less than ten percent (10%), all calculated on a
consolidated basis.

 

(d)                                 Nonperforming
Assets.  All assets of all
Subsidiary Banks and other Subsidiaries classified as “non-performing” (which
shall include all loans in non-accrual status, more than ninety (90) days past
due in principal or interest, restructured or renegotiated, or listed as “other
restructured” or “other real estate owned”) on the FDIC or other regulatory
agency call report shall not exceed at any time three percent (3.0%) of the
total loans of Borrower and its Subsidiaries on a consolidated basis.

 

(e)                                  Loan
Loss Reserves Ratio.  Each
Subsidiary Bank shall maintain at all times on a consolidated basis a ratio of
loan loss reserves to non-performing loans of not less than one hundred percent
(100%).

 

(f)                                    Minimum
Tier 1 Capital.  Borrower shall
maintain a consolidated minimum Tier 1 Capital equal to at least
$125,000,000 at all times. 

 

(g)                                 Total
Debt to Tier 1 Capital.  Borrower’s
total indebtedness for borrowed money (specifically excluding the indebtedness
for borrowed money of Borrower’s Subsidiaries) shall not at any time exceed
thirty-five percent (35%) of its Tier 1 Capital.

 

(h)                                 Return
on Average Assets.  Borrower’s
consolidated net income shall be at least eighty-five hundredths of one percent
(0.85%) of its average assets, calculated on an annualized basis as at the last
day of each fiscal quarter of Borrower; provided, however,

 

14

 

that for purposes of determining return on average
assets, customary and reasonable non-recurring expenses and charges incurred by
Borrower in connection with a permitted acquisition under Sections 5.1
and 5.6 hereof shall be excluded.

 

SECTION 5.5.                                         INDEBTEDNESS,
LIENS AND TAXES.  Borrower and
each Subsidiary shall:

 

(a)                                  Indebtedness.  Not incur, permit to remain outstanding, assume
or in any way become committed for indebtedness in respect of borrowed money
(specifically including but not limited to indebtedness in respect of money
borrowed from financial institutions, but excluding deposits), except:  (i) indebtedness incurred by Borrower under
this Agreement, and further indebtedness of Borrower to Lender, to the Other
Banks or to any other Person; provided that, the aggregate amount of such
indebtedness permitted pursuant to this clause (i) shall not exceed at
any time the lesser of $70,000,000 and an amount which would cause Borrower to
breach its Total Debt to Tier 1 Capital financial covenant in Section 5.4(g);
and provided further, such indebtedness shall be unsecured except as permitted
under Section 5.5(b); (ii) in addition to the indebtedness
permitted under the foregoing clause (i), in the case of Borrower, Trust
Indebtedness and Trust Guarantees, and in the case of any Trust Issuer, Trust
Preferred Securities; and (iii) indebtedness incurred by the Subsidiary
Banks in their normal course of business with the Federal Home Loan Bank, any
Federal Reserve Bank or for Federal Funds with correspondent banks for
liquidity management.

 

(b)                                 Liens.  Not create, suffer or permit to exist any
lien or encumbrance of any kind or nature upon any of their assets now or
hereafter owned or acquired (specifically including but not limited to the
capital stock of any of the Subsidiary Banks), or acquire or agree to acquire
any property or assets of any character under any conditional sale agreement or
other title retention agreement, but this Section shall not be deemed to
apply to:  (i) liens existing on the
date of this Agreement and disclosed on Schedule 5.5(b); (ii) liens
of landlords, contractors, laborers or suppliers, tax liens, or liens securing
performance or appeal bonds, or other similar liens or charges arising out of
Borrower’s business, provided that tax liens are removed before related taxes
become delinquent and other liens are promptly removed, in either case unless
contested in good faith and by appropriate proceedings, and as to which
adequate reserves shall have been established and no foreclosure, sale or
similar proceedings have commenced; (iii) liens in favor of Lender; (iv) liens
on the assets of any Subsidiary Bank arising in the ordinary course of the
banking business of such Subsidiary Bank; and (v) liens contemplated by Section 4.5.

 

(c)                                  Taxes.  Pay and discharge all taxes, assessments and
governmental charges or levies imposed upon them, upon their income or profits
or upon any properties belonging to them, prior to the date on which penalties
attach thereto, and all lawful claims for labor, materials and supplies when
due, except that no such tax, assessment, charge, levy or claim need be paid
which is being contested in good faith by appropriate proceedings as to which
adequate reserves shall have been established, and no foreclosure, sale or
similar proceedings have commenced.

 

15

 

(d)                                 Guaranties.  Not assume, guarantee, endorse or otherwise
become or be responsible in any manner (whether by agreement to purchase any
obligations, stock, assets, goods or services, or to supply or loan any funds,
assets, goods or services, or otherwise) with respect to the obligation of any
other Person, except:  (i) by the
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, issuance of letters of credit or similar instruments or
documents in the ordinary course of business; (ii) in the case of Borrower,
Trust Guarantees; and (iii) guarantees by Borrower of any of its Subsidiary’s
obligations, provided the liability to Borrower on account of such guarantees
shall not in the aggregate exceed $10,000,000 at anytime outstanding.

 

SECTION 5.6.                                         INVESTMENTS
AND LOANS.  Neither Borrower
nor any Subsidiary shall make any loan, advance, extension of credit or capital
contribution to, or purchase or otherwise acquire for consideration, evidences
of indebtedness, capital stock or other securities of any Person, except that
Borrower and any Subsidiary may:

 

(a)                                  purchase
or otherwise acquire and own short-term money market items;

 

(b)                                 invest,
by way of purchase of securities or capital contributions, in the Subsidiary
Banks or any other bank or banks, and upon Borrower’s purchase or other
acquisition of twenty-five percent (25%) or more of the stock of any bank, such
bank shall thereupon become a “Subsidiary Bank” for all purposes under this
Agreement; 

 

(c)                                  invest,
by way of loan, advance, extension of credit (whether in the form of lease,
conditional sales agreement, or otherwise), purchase of securities, capital
contributions, or otherwise, in Subsidiaries other than banks or Subsidiary
Banks; 

 

(d)                                 invest,
by way of purchase of securities or capital contributions, in other Persons so
long as before and after giving effect thereto no Event of Default or Unmatured
Event of Default shall have occurred and be continuing and the investment is in
compliance with Regulation Y of the Federal Reserve Board; and

 

(e)                                  in
the case of any Trust Issuer, purchase any Trust Indebtedness and, in the case
of Borrower, purchase any common securities of any Trust Issuer and issue any
Trust Guarantees.

 

Nothing in this Section 5.6 shall prohibit
a Subsidiary Bank from making investments, loans, advances, or other extensions
of credit in the ordinary course of the banking business upon such terms as may
at the time be customary in the banking business.

 

SECTION 5.7.                                         CAPITAL
STRUCTURE AND DIVIDENDS. 
Borrower shall not, and shall not permit any Subsidiary to, (i) purchase
or redeem, or obligate itself to purchase or redeem, any shares of Borrower’s
capital stock, of any class, issued and outstanding from time to time, or any
partnership, joint venture or other equity interest in Borrower or any
Subsidiary; or (ii) declare or pay any dividend (other than dividends payable
in its own common stock or to Borrower) or make any other distribution in
respect of such shares or interest other than to Borrower; provided, however,
so long as no Event of Default or Unmatured Event of Default

 

16

 

shall have occurred and be continuing before or after
giving effect thereto, Borrower may purchase or redeem shares of Borrower’s
capital stock and or declare and pay cash dividends to holders of the capital
stock of Borrower in any fiscal quarter in an aggregate amount that, when added
together with any purchase or redemptions of Borrower’s capital stock and any
cash dividends declared and paid during the immediately preceding four quarter
period (including the quarter in which the determination is being made so that
the Calculation Period is a “rolling four quarter”) (such period being referred
to as the “Calculation Period”), does not exceed fifty percent (50%) of
the consolidated net income of Borrower, determined in accordance with
generally accepted accounting principles, calculated for such Calculation
Period.  Except as provided in Section 5.1,
Borrower shall continue to own, directly or indirectly, the same (or greater)
percentage of the stock and partnership, joint venture, or other equity
interest in each Subsidiary that it held on the date of this Agreement, and no
Subsidiary shall issue any additional stock or partnership, joint venture or other
equity interests, options or warrants in respect thereof, or securities
convertible into such securities or interests, other than to Borrower.

 

SECTION 5.8.                                         MAINTENANCE
OF PROPERTIES.  Borrower and
each Subsidiary shall maintain, or cause to be maintained, in good repair,
working order and condition, all their properties (whether owned or held under
lease), and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, and improvements
thereto, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times (for avoidance of doubt,
this Section 5.8 does not limit or restrict Borrower or any
Subsidiary from opening, closing or moving any of their branch offices or other
office properties).

 

SECTION 5.9.                                         INSURANCE.  Borrower and each Subsidiary shall maintain
insurance in responsible companies in such amounts and against such risks as is
required by law and such other insurance, in such amount and against such
hazards and liabilities, as is customarily maintained by bank holding companies
and banks similarly situated.  Each
Subsidiary Bank shall have deposits insured by the FDIC.

 

SECTION 5.10.                                  USE OF PROCEEDS.

 

(a)                                  General.  The proceeds of the Loans shall be used for
general corporate purposes.  Neither
Borrower nor any Subsidiary shall use or permit any proceeds of the Loans to be
used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of “purchasing or carrying any margin stock” within the
meaning of Regulations U or X of the Board of Governors of the Federal Reserve
System, as amended from time to time. 
If requested by Lender, Borrower and each Subsidiary will furnish to Lender
a statement in conformity with the requirements of Federal Reserve Form
U-1.  No part of the proceeds of the
Loans will be used for any purpose which violates or is inconsistent with the
provisions of Regulation U or X of the Board of Governors.

 

(b)                                 Tender
Offers and Going Private.  Neither
Borrower nor any Subsidiary shall use (or permit to be used) any proceeds of
the Loans to acquire any security in any

 

17

 

transaction which is subject to Section 13 or 14
of the Securities Exchange Act of 1934, as amended, or any regulations or
rulings thereunder.

 

SECTION 5.11.                                  COLLATERAL.  Borrower and Lender hereby agree that the
Loans and all other obligations owing from time to time from Borrower to Lender
under this Agreement and the Note shall be secured pursuant to that certain
Amended and Restated Pledge Agreement, dated as of even date herewith, executed
by Borrower in favor of The Northern Trust Company, as collateral agent for
Lender and the Other Banks (the “Collateral Agent”) (said Amended and
Restated Pledge Agreement, as amended, restated, modified or supplemented from
time to time, the “Pledge Agreement”), pursuant to which Borrower has
pledged to the Collateral Agent, for the benefit of Lender and the Other Banks,
all of the issued and outstanding shares of capital stock owned by Borrower
(herein collectively referred to as the “Pledged Shares”) of Pacific
Western National Bank.

 

SECTION 5.12.                                  COMPLIANCE
WITH LAW.  Borrower and each
Subsidiary shall comply with all applicable laws and regulations (whether
federal, state or local and whether statutory, administrative, judicial or
otherwise) and with every lawful governmental order or similar actions (whether
administrative or judicial), specifically including but not limited to all
requirements of the Bank Holding Company Act of 1956, as amended, and with the
regulations of the Board of Governors of the Federal Reserve System relating to
bank holding companies.

 

SECTION 5.13.                                  NOTICE OF DEPOSIT AND OTHER ACCOUNTS.  Borrower shall promptly notify
Lender in writing (a) of any deposit or other account currently maintained
by Borrower with any of the Other Banks and (b) upon the opening by
Borrower of any deposit or other account after the date hereof with any of the
Other Banks.

 

SECTION 6.  CONDITIONS OF LENDING

 

SECTION 6.1.                                         DOCUMENTATION;
NO DEFAULT.  The obligation
of Lender to make any Loan is subject to the following conditions precedent:

 

(a)                                  Initial
Documentation.  Lender shall have
received all of the following concurrently with the execution and delivery
hereof, each duly executed and dated the date hereof or other date satisfactory
to Lender, in form and substance satisfactory to Lender and its counsel, at the
expense of Borrower, and in such number of signed counterparts as Lender may request
(except for the Note, of which only the original shall be signed):

 

(i)                                     Note.  The Note duly executed.

 

Upon receipt of the Note, the Lender will:  (i) record the aggregate unpaid principal amount of the
Prior Note issued under the Prior Credit Agreement in its records or, at its
option, on the schedule attached to the Note as the aggregate unpaid
principal amount of the Note; (ii) mark the Prior Note as replaced by the
Note; and (iii) return the Prior Note to the Borrower upon the Borrower’s
request.  Thereafter, all references in
this Agreement and in any and all instruments or documents provided for therein
or delivered or to be delivered thereunder or in

 

18

 

connection therewith to the Prior Note shall be deemed references to
the Note.  The replacement of the Prior
Note with the Note shall not be construed to (i) deem paid or forgiven the
unpaid principal amount of, or unpaid accrued interest on, the Prior Note
outstanding at the time of replacement or (ii) to release or otherwise
adversely affect any lien, mortgage or security interest securing such
indebtedness or any rights of Lender against any guarantor, surety or other
party primarily or secondarily liable for such indebtedness.

 

(ii)                                  Pledge
Agreement.  The Pledge Agreement
duly executed, together with the Pledged Shares and stock powers, duly
executed, in blank.

 

(iii)                               Resolution;
Certificate of Incumbency.  A copy
of a resolution of the Board of Directors of Borrower authorizing the
execution, delivery and performance of this Agreement, the Note, the Pledge
Agreement and other documents provided for in this Agreement, certified by the
secretary or assistant secretary of Borrower, together with a certificate of
such officer of Borrower, certifying the names of the officer(s) of Borrower
authorized to sign this Agreement, the Pledge Agreement, the Note and any other
documents provided for in this Agreement, together with a sample of the true
signature of each such Person (Lender may conclusively rely on such certificate
until formally advised by a like certificate of any changes therein).

 

(iv)                              Governing
Documents.  A copy of the articles
of incorporation and by-laws of Borrower, certified by the secretary or
assistant secretary of Borrower.

 

(v)                                 Certificate
of No Default.  A certificate signed
by an appropriate officer of Borrower to the effect that: (A) no Event of
Default or Unmatured Event of Default has occurred and is continuing or will
result from the making of the first Loan; and (B) the representations and
warranties of Borrower contained herein are true and correct as at the date of
the first Loan as though made on that date.

 

(vi)                              Opinion
of Counsel to Borrower.  An opinion
of counsel to Borrower substantially in the form of Exhibit B attached
hereto.

 

(vii)                           Good Standing Certificate.  A good standing certificate from Borrower’s
Federal Reserve Bank and from the Secretary of State of California.

 

(viii)                        Other Bank Agreements.  A copy of the Other Bank Agreements, duly
executed by Borrower and the Other Banks, certified by an appropriate officer
of Borrower, which certificate shall represent that, except for the names of
the Other Banks and related information therein and the amount of the
commitments to make revolving loans thereunder, each Other Bank Agreement is
identical in all material respects to this Agreement.

 

(ix)                                Intercreditor
Agreement.  An intercreditor
agreement entered into between Lender and the Other Banks as to, among other
things, the Pledged Shares.

 

19

 

(x)                                   Miscellaneous.  Such other documents and certificates as
Lender may reasonably request.

 

(b)                                 Representations
and Warranties True.  At the date of
each Loan, Borrower’s representations and warranties set forth herein shall be true
and correct as of such date as though made on such date.

 

(c)                                  No
Default.  At the time of each Loan,
and immediately after giving effect to such Loan, no Event of Default or
Unmatured Event of Default shall have occurred and be continuing at the time of
such Loan, or would result from the making of such Loan.

 

(d)                                 Pro
Rata Division of Loans.  At the time
of each Loan and before and after giving effect thereto, the principal amount
of Loans outstanding under this Agreement and loans outstanding under the Other
Bank Agreements shall be divided ratably among the Lender and the Other Banks.

 

SECTION 6.2.                                         AUTOMATIC
UPDATE OF REPRESENTATIONS AND WARRANTIES AND NO-DEFAULT CERTIFICATE;
CERTIFICATE AT LENDER’S OPTION.  The request by Borrower for any Loan shall be deemed a
representation and warranty by Borrower that the statements in subsections
(b) and (c) of Section 6.l are true and correct on and
as at the date of each succeeding Loan, as the case may be.  Upon receipt of each Loan request Lender in
its sole discretion shall have the right to request that Borrower provide to
Lender, prior to Lender’s funding of the Loan, a certificate executed by
Borrower’s President, Treasurer, or Chief Financial Officer to such effect.

 

SECTION 7.  DEFAULT

 

SECTION 7.1.                                         EVENTS
OF DEFAULT.  The occurrence
of any of the following shall constitute an “Event of Default”:

 

(a)                                  failure
to pay, when and as due, any principal, interest or other amounts payable
hereunder or under the Note; provided that, in the case of interest only, such
failure shall continue for three (3) days after its due date;

 

(b)                                 any
default, event of default, or similar event shall occur or continue under any
other instrument, document, note or agreement delivered to Lender in connection
with this Agreement, including without limitation, the Pledge Agreement, and
any applicable cure period provided therein shall have expired; or any such
instrument, document, note or agreement shall not be, or shall cease to be,
enforceable in accordance with its terms; 

 

(c)                                  there
shall occur any default or event of default, or any event or condition that
might become such with notice or the passage of time or both, or any similar
event, or any event that requires the prepayment of borrowed money or the
acceleration of the maturity thereof, under the terms of any evidence of
indebtedness or other agreement issued or assumed or entered into by Borrower
or any Subsidiary (including the Other Bank Agreements) for obligations in an
aggregate amount in excess of Two Million and No/100 United States Dollars
($2,000,000), or under the terms of any indenture,

 

20

 

agreement, or instrument under which any such evidence
of indebtedness or other agreement is issued, assumed, secured, or guaranteed,
and such event shall continue beyond any applicable period of grace provided
therein; 

 

(d)                                 any
representation, warranty, schedule, certificate, financial statement, report,
notice, or other writing furnished by or on behalf of Borrower or any Subsidiary
to Lender is false or misleading in any material respect on the date as of
which the facts therein set forth are stated or certified; 

 

(e)                                  Any
guaranty of or pledge of collateral security for the Loans shall be repudiated
or become unenforceable or incapable of performance or Borrower shall fail to
pledge and deliver to Lender any share certificate of Pacific Western National
Bank as provided in Section 3(c) of the Pledge Agreement; 

 

(f)                                    Borrower
or any Subsidiary shall fail to comply with Sections 3.3, 5.l, 5.2(e)
and (f), 5.4, 5.5, 5.6, 5.7 and 5.11
hereof; or fail to comply with or perform any agreement or covenant of Borrower
or any Subsidiary contained herein, which failure does not otherwise constitute
an Event of Default, and such failure shall continue unremedied for thirty (30)
days after notice thereof to Borrower by Lender; 

 

(g)                                 an
event or condition specified in Section 4.13(b) shall occur or
exist and if as a result of such event or condition, together with all other
such events or conditions if any, Borrower or any ERISA Affiliate shall incur,
or, in the reasonable opinion of Lender, shall be reasonably likely to incur, a
liability to a Plan, a Multiemployer Plan or the PBGC (or any combination of
the foregoing) which is, in the reasonable determination of Lender, materially
adverse to the consolidated assets, financial condition business or operations
taken as a whole of Borrower and its Subsidiaries;

 

(h)                                 any
Person, or two or more Persons acting in concert, shall acquire beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 50% or more of the outstanding
shares of voting stock of Borrower;

 

(i)                                     any
proceeding (judicial or administrative) shall be commenced against Borrower or
any Subsidiary, or with respect to any assets of Borrower or any Subsidiary
which could reasonably be expected to have a material and adverse effect on the
consolidated assets, financial condition, business or operations of Borrower
and its Subsidiaries and which is not dismissed within thirty (30) days after
it is commenced against Borrower or any Subsidiary; or final judgment(s) and/or
settlement(s) in an aggregate amount that is more than ONE MILLION UNITED
STATES DOLLARS ($1,000,000) in excess of insurance for which the insurer has
confirmed coverage in writing, a copy of which writing has been furnished to
Lender, shall be entered or agreed to in any suit or action commenced against
Borrower or any Subsidiary, and which are not satisfied within thirty (30) days
after they have been entered or agreed to in any suit or action commenced
against Borrower or any Subsidiary;

 

21

 

(j)                                     Borrower
shall grant or any Person (other than the Collateral Agent for the benefit of
Lender and the Other Banks) shall obtain a security interest in any collateral
for the Loans; Borrower or any other Person (other than the Collateral Agent
for the benefit of Lender and the Other Banks) shall perfect (or attempt to
perfect) such a security interest; a court shall determine that Collateral
Agent does not have a first priority security interest (for the benefit of
Lender and the Other Banks) in any of the collateral for the Loans enforceable
in accordance with the terms of the related documents; or any notice of a
federal tax lien against Borrower shall be filed with any public recorder and
is not satisfied within thirty (30) days from the time of such filing, unless
Borrower is contesting the validity thereof in good faith by appropriate
proceedings and has set aside on its books adequate reserves with respect
thereto in accordance with generally accepted accounting principles; 

 

(k)                                  There
shall be any material loss or depreciation in the value of any collateral for
the Loans for any reason, or, unless expressly permitted by the related
documents, all or any part of any collateral for the Loans or any direct,
indirect, legal, equitable or beneficial interest therein is assigned,
transferred or sold without Lender’s prior written consent;

 

(l)                                     any
Federal Reserve Bank, the FDIC or other regulatory entity shall issue or agree
to enter into any formal enforcement action with or against Borrower or any
Subsidiary (including, but not limited to, a formal written agreement, cease
and desist order, suspension, removal or prohibition order or capital
directive, but excluding a civil money penalty), or any Federal Reserve Bank,
the FDIC or other regulatory entity shall issue or enter into any informal
enforcement action with or against Borrower or any Subsidiary (including, but
not limited to, a commitment letter, memorandum of understanding or any similar
action) or assess a civil money penalty, which in each case is materially
adverse to the consolidated assets, financial condition, business or operations
of Borrower or any Subsidiary;

 

(m)                               Borrower
or any Subsidiary (other than an Insignificant Subsidiary) shall fail to comply
with Section 5.1 hereof or shall suspend the transaction of all or
a substantial portion of its usual business or Borrower or any Subsidiary
(other than an Insignificant Subsidiary) shall take any corporation action to
approve or authorize to approve any action or omission that would result in any
of the foregoing;

 

(n)                                 any
bankruptcy, insolvency, reorganization, arrangement, readjustment or similar
proceeding, domestic or foreign, is instituted by or against Borrower or any
Subsidiary, and in the case of an involuntary bankruptcy proceeding, such
proceeding is not dismissed within sixty (60) days (it is acknowledged and
agreed that Lender has no obligation to make Loans during such cure period); or
Borrower or any Subsidiary shall take any steps toward, or to authorize, such a
proceeding; or

 

(o)                                 Borrower
or any Subsidiary shall become insolvent, generally shall fail or be unable to
pay its debts

 

22

 

as they mature, shall admit in writing its inability
to pay its debts as they mature, shall make a general assignment for the
benefit of its creditors or shall enter into any composition or similar
agreement.

 

SECTION 7.2.                                         DEFAULT REMEDIES.

 

(a)                                  Upon
the occurrence and during the continuance of any Event of Default specified in Section 7.l(a)-(m),
Lender at its option may declare the Note (principal, interest and other
amounts) and any other amounts owed to Lender, including without limitation any
accrued but unpaid Commitment Fee, immediately due and payable without notice
or demand of any kind.  Upon the
occurrence of any Event of Default specified in Section 7.l(n)-(o),
the Note (principal, interest and other amounts) and any other amounts owed to
Lender, including without limitation any accrued but unpaid Commitment Fee,
shall be immediately and automatically due and payable without action of any
kind on the part of Lender.  Upon the
occurrence and during the continuance of any Event of Default, any obligation
of Lender to make any Loan shall immediately and automatically terminate
without action of any kind on the part of Lender, and Lender may exercise any
rights and remedies under this Agreement, the Pledge Agreement, the Note, any
related document or instrument, and at law or in equity.

 

(b)                                 Lender
may, by written notice to Borrower, at any time and from time to time, waive
any Event of Default or Unmatured Event of Default, which shall be for such
period and subject to such conditions as shall be specified in any such
notice.  In the case of any such waiver,
Lender and Borrower shall be restored to their former position and rights
hereunder, and any Event of Default or Unmatured Event of Default so waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to or impair any subsequent or other Event of Default or Unmatured Event of
Default.  No failure to exercise, and no
delay in exercising, on the part of Lender of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. 
The rights and remedies of Lender herein provided are cumulative and not
exclusive of any rights or remedies provided by law.

 

SECTION 8.  DEFINITIONS

 

SECTION 8.1.                                         GENERAL.  As used herein:

 

(a)                                  The
term “Banking Day” means a day on which Lender is open at its main
office for the purpose of conducting a commercial banking business and is not
authorized to close.

 

(b)                                 The
term “Code” shall mean the Internal Revenue Code of 1986, as amended
form time to time.

 

(c)                                  The
term “Environmental Laws” shall mean all federal, state and local laws,
including statutes, regulations, ordinances, codes, rules and other
governmental restrictions and requirements, relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to
the environment or hazardous substances or the treatment, processing, storage,
disposal, release, transport or other handling

 

23

 

thereof, including, but not limited to, the federal
Solid Waste Disposal Act, the federal Clean Air Act, the federal Clean Water
Act, the federal Resource Conservation and Recovery Act, the federal Hazardous
Materials Transportation Act, the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the federal Toxic Substances Control
Act, regulations of the Nuclear Regulatory Agency, and regulations of any state
department of natural resources or state environmental protection agency, in
each case as now or at any time hereafter in effect.

 

(d)                                 The
term “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.

 

(e)                                  The
term “ERISA Affiliate” shall mean any corporation or trade or business
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as Borrower or is under common
control (within the meaning of Section 414(c) of the Code) with Borrower.

 

(f)                                    The
term “FDIC” means the Federal Deposit Insurance Corporation and any
successor thereof.

 

(g)                                 The
term “Interest Period” means, with regard to LIBOR Loans, the amount of
days from the date an interest rate is to be in effect to the date such
interest period matures according to its terms.

 

(h)                                 The
term “Interim Maturity Date” means the last day of any Interest Period.

 

(i)                                     The
term “Multiemployer Plan” shall mean a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been made by
Borrower or any ERISA Affiliate as a “contributing sponsor” (within the meaning
of Section 4001(a)(13) of ERISA).

 

(j)                                     The
term “Other Banks” means the other banks party to the Other Bank
Agreements, together with their successors and assigns party to such Other Bank
Agreements.

 

(k)                                  The
term “Other Bank Agreements” means that certain Revolving Credit
Agreement dated even date herewith between Borrower and U.S. Bank National
Association, and the notes, guaranties, pledge agreements and the other
documents delivered in connection therewith, as each may be amended, modified
or supplemented from time to time.

 

(l)                                     The
term “PBGC” shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.

 

(m)                               The
term “Pension Plan” shall mean any Plan which is a “defined benefit
plan” within the meaning of Section 3(35) of ERISA.

 

24

 

(n)                                 The
term “Person” shall mean any individual, corporation, company, limited
liability company, voluntary association, partnership, trust, estate,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).

 

(o)                                 The
term “Plan” shall mean any plan, program or arrangement covering current
or former employees of Borrower or any of its ERISA Affiliates which
constitutes an “employee benefit plan” within the meaning of Section 3(3)
of ERISA.

 

(p)                                 The
term “Prime Rate” means that rate of interest announced from time to
time by Lender called its prime rate, which rate may not at any time be the
lowest rate charged by Lender.  Changes
in the rate of interest on the Loans resulting from a change in the Prime Rate
shall take effect on the date set forth in each announcement of a change in the
Prime Rate.

 

(q)                                 The
term “Subsidiary” means any corporation, partnership, joint venture,
trust, or other legal entity of which Borrower owns directly or indirectly twenty-five
percent (25%) or more of the outstanding voting stock or interest, or of which
Borrower has effective control, by contract or otherwise.  The term Subsidiary includes each Subsidiary
Bank unless stated otherwise explicitly.

 

(r)                                    The
term “Subsidiary Bank” means each Subsidiary which is a bank.

 

(s)                                  The
term “Tier 1 Capital” means the same as that determined under the
capital formula currently used by the Federal Reserve Board.

 

(t)                                    The
term “Total Capital” means the same as that determined under the capital
formula currently used by the Federal Reserve Board.

 

(u)                                 The
term “Trust Guarantee” means any guarantee of Borrower of the Trust
Preferred Securities, which guarantee is subordinate and junior in right of
payment to the prior payment of the obligations of Borrower hereunder and under
the Note on terms satisfactory to Lender.

 

(v)                                 The
term “Trust Indebtedness” means indebtedness of Borrower payable to the
Trust Issuer or its transferees (a) which is due not earlier than the date
thirty (30) years after its issuance, (b) which may not be redeemed
earlier than five (5) years after issuance and (c) the payment of which is
subordinate and junior in right of payment to the prior payment of the
obligations of Borrower hereunder and under the Note on terms satisfactory to
Lender.

 

(w)                               The
term “Trust Issuer” means a wholly-owned Subsidiary of Borrower which
qualifies as a Delaware or Connecticut statutory business trust.

 

(x)                                   The
term “Trust Preferred Securities” means preferred securities issued by
the Trust Issuer (a) which are subject to mandatory redemption not earlier than
the date

 

25

 

thirty (30) years after issuance and (b) which
may not be optionally redeemed earlier than five (5) years after issuance.

 

(y)                                 The
term “Unmatured Event of Default” means an event or condition which
would become an Event of Default with notice or the passage of time or both.

 

Except as and unless otherwise specifically provided herein, all
accounting terms shall have the meanings given to them by generally accepted
accounting principles and shall be applied and all reports required by this
Agreement shall be prepared, in a manner consistent with the financial
statements referred to in Section 4.3 above.

 

SECTION 8.2.                                         APPLICABILITY
OF SUBSIDIARY REFERENCES. 
Terms hereof pertaining to any Subsidiary shall apply only during such
times as Borrower has any Subsidiary.

 

SECTION 9.  NO INTEREST OVER LEGAL RATE.

 

Borrower does not intend or expect to pay, nor does
Lender intend or expect to charge, accept or collect any interest which, when
added to any fee or other charge upon the principal which may legally be
treated as interest, shall be in excess of the highest lawful rate.  If acceleration, prepayment or any other
charges upon the principal or any portion thereof, or any other circumstance,
result in the computation or earning of interest in excess of the highest
lawful rate, then any and all such excess is hereby waived and shall be applied
against the remaining principal balance. 
Without limiting the generality of the foregoing, and notwithstanding
anything to the contrary contained herein or otherwise, no deposit of funds
shall be required in connection herewith which will, when deducted from the
principal amount outstanding hereunder, cause the rate of interest hereunder to
exceed the highest lawful rate.

 

SECTION 10.  PAYMENTS, ETC.

 

All payments hereunder shall be made in immediately
available funds, and shall be applied first to accrued interest and then to
principal; however, if an Event of Default occurs, Lender may, in its sole
discretion, and in such order as it may choose, apply any payment to interest,
principal and/or lawful charges and expenses then accrued.  Borrower shall receive immediate credit on
payments received during Lender’s normal banking hours if made in cash,
immediately available funds, or by debit to available balances in an account at
Lender; otherwise payments shall be credited after clearance through normal
banking channels.  Borrower authorizes Lender
to charge any account of Borrower maintained with Lender for any amounts of
principal, interest, taxes, duties, or other charges or amounts due or payable
hereunder, with the amount of such payment subject to availability of collected
balances in Lender’s discretion; unless Borrower instructs otherwise, all Loans
shall be made in immediately available funds and shall be credited to an
account(s) of Borrower with Lender.  All
payments shall be made without deduction for or on account of any present or
future taxes, duties or other charges levied or imposed on this Agreement, the
Pledge Agreement, the Note, the Loans or the proceeds, Lender or Borrower by
any government or political subdivision thereof.  Borrower shall upon request of Lender pay all such taxes, duties
or other charges in addition to principal and interest, including

 

26

 

without limitation all
documentary stamp and intangible taxes, but excluding income taxes based solely
on Lender’s income.

 

SECTION 11.  SETOFF.

 

At any time after an Event of Default of Unmatured
Event of Default shall have occurred and be continuing, and upon notice to
Borrower, any account, deposit or other indebtedness owing by Lender to
Borrower, and any securities or other property of Borrower delivered to or left
in the possession of Lender or its nominee or bailee, may be set off against
and applied in payment of any obligation hereunder, whether due or not.  The setoff provision in this Section 11
shall not be applicable to any accounts (and deposits or property therein)
maintained at Lender in the name of Borrower or any of its Subsidiaries for
which Borrower or such Subsidiaries have established and maintained in trust
for the benefit of any third party (not including, however, any affiliate of
Borrower or any such Subsidiary). 
Borrower shall be obligated to notify Lender promptly upon the receipt
of any such notice of setoff, and provide supporting documentation, in form and
substance reasonably satisfactory to Lender, to establish, in the reasonable
opinion of Lender, that any account subject to such setoff is in fact held by
Borrower or any of its Subsidiaries, as the case may be, in trust for the
benefit of any third party (not including, however, any affiliate or Borrower
or any such Subsidiary).  If Borrower
fails to comply with the foregoing sentence, Lender may assume that its setoff
of any account or other property is valid and permissible.

 

SECTION 12.  NOTICES

 

All notices, requests and demands to or upon the
respective parties hereto shall be made, if to Lender, to its office indicated
above (Attention:  Division Head,
Correspondent Services Division), and if to Borrower, to its address set forth
below, or to such other address as may be hereafter designated in writing by
the respective parties hereto or, as to Borrower, may appear in Lender’s
records.  Notices sent by facsimile
transmission shall be deemed to have been given upon electronic confirmation;
notices sent by mail shall be deemed to have been given three (3) business days
after the date when sent by registered or certified mail, postage prepaid;
notices sent by personal delivery or by a nationally recognized overnight
delivery service (e.g., Federal Express) shall be deemed to have been given
when received.

 

SECTION 13.  MISCELLANEOUS.

 

This Agreement and any document or instrument executed
in connection herewith shall be governed by and construed in accordance with
the internal law of the State of New York. 
This Agreement may only be amended, supplemented or modified at any time
by written instrument duly executed by Lender and Borrower.  Concurrently with the execution of any
amendment to this Agreement, Borrower shall deliver to Lender a substantially
similar amendment to the Other Bank Agreements signed by each of the Other
Banks, certified by an appropriate officer of Borrower.  Failure to deliver such amendment to the
Other Bank Agreements shall entitle Lender to declare an Event of Default under
Section 7.1(f) of this Agreement, without any further notice.  Unless the context requires otherwise,
wherever used herein the singular shall include the plural and vice versa, and
the use of one gender shall also

 

27

 

denote the other.  Captions herein are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof; references herein to Sections or provisions without reference to the
document in which they are contained are references to this Agreement.  This Agreement shall bind Borrower, its
successors and assigns, and shall inure to the benefit of Lender, its
successors and assigns, except that Borrower may not transfer or assign any of
its rights or interest hereunder without the prior written consent of Lender.  Borrower agrees to pay upon demand all
expenses (including without limitation reasonable attorneys’ fees, legal costs
and expenses, whether in or out of court, in original or appellate proceedings
or in bankruptcy) incurred or paid by Lender or any holder of the Note in
connection with (a) the negotiation, preparation, execution and delivery of
this Agreement, the Note, the Pledge Agreement and the other documents to be
delivered hereunder, (b) any amendment, modification or waiver of any of
the terms of this Agreement, the Pledge Agreement or the Note, (c) any Event of
Default or Unmatured Event of Default and any enforcement or collection
proceedings resulting therefrom, and (d) any transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement, the Pledge Agreement, the Note
or any other document referred to herein; provided, that, Borrower shall not be
obligated to pay Lender for Lender’s attorneys’ fees and expenses for the
matters described in the foregoing clause (a) which exceed $13,000.  Except as otherwise specifically provided
herein, Borrower expressly and irrevocably waives presentment, protest, demand
and notice of any kind in connection herewith.

 

SECTION 14.  ARBITRATION AND WAIVER OF JURY TRIAL

 

(a)                                  This
Section concerns the resolution of any controversies or claims between
Lender and Borrower, whether arising in contract, tort or by statute, including
but not limited to controversies or claims that arise out of or relate to:  (i) this Agreement (including any
renewals, extensions or modifications); or (ii) any document executed in
connection with this Agreement (collectively, a “Claim”).

 

(b)                                 At
the request of Lender or Borrower, any Claim shall be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, U.S.
Code) (the “Act”).  The Act will
apply even though this Agreement provides that it is governed by the law of a
specified state.

 

(c)                                  Arbitration
proceedings will be determined in accordance with the Act, the applicable rules
and procedures for the arbitration of disputes of JAMS or any successor thereof
(“JAMS”), and the terms of this Section.  In the event of any inconsistency, the terms of this
Section shall control.

 

(d)                                 The
arbitration shall be administered by JAMS and conducted, unless otherwise
required by law, in the State of California. 
All Claims shall be determined by one arbitrator; however, if Claims
exceed Five Million Dollars ($5,000,000), upon the request of Lender or
Borrower, the Claims shall be decided by three arbitrators.  All arbitration hearings shall commence
within thirty (30) days of the demand for arbitration and close within thirty
(30) days of commencement and the award of the arbitrator(s) shall be issued
within thirty (30) days of the close of the hearing.  However, the arbitrator(s),

 

28

 

upon a showing of good cause, may extend the
commencement of the hearing for up to an additional sixty (60) days.  The arbitrator(s) shall provide a concise
written statement of reasons for the award. 
The arbitration award may be submitted to any court having jurisdiction
to be confirmed and enforced.

 

(e)                                  The
arbitrator(s) will have the authority to decide whether any Claim is barred by
the statute of limitations and, if so, to dismiss the arbitration on that
basis.  For purposes of the application
of the statute of limitations, the service on JAMS under applicable JAMS rules
of a notice of Claim is the equivalent of the filing of a lawsuit.  Any dispute concerning this arbitration
provision or whether a Claim is arbitrable shall be determined by the
arbitrator(s).  The arbitrator(s) shall
have the power to award legal fees pursuant to the terms of this Agreement.

 

(f)                                    This
Section does not limit the right of Lender or Borrower to:  (i) exercise self-help remedies, such
as, but not limited to, setoff; (ii) initiate judicial or non-judicial
foreclosure against any real or personal property collateral; (iii) exercise
any judicial or power of sale rights, or (iv) act in a court of law to
obtain an interim remedy, such as, but not limited to, injunctive relief, writ
of possession or appointment of a receiver, or additional or supplementary
remedies.

 

(g)                                 The
filing of a court action is not intended to constitute a waiver of the right of
any party, including the suing party, thereafter to require submittal of the
Claim to arbitration.

 

(h)                                 By
agreeing to binding arbitration, the parties irrevocably and voluntarily waive
any right they may have to a trial by jury in respect of any Claim.  Furthermore, without intending in any way to
limit this Agreement to arbitrate, to the extent any claim is not arbitrated,
the parties irrevocably and voluntarily waive any right they may have to a
trial by jury in respect of such Claim. 
This provision is a material inducement for the parties entering into
this Agreement.

 

[Signature Page Follows]

 

29

 

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

 

 

	
   

  	
  FIRST COMMUNITY
  BANCORP

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  Lynn M. Hopkins

  
	
   

  	
  Title:  EVP, Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Address for
  notices:

  
	
   

  	
   

  
	
   

  	
  6110 El Tordo

  
	
   

  	
  Rancho Santa Fe,
  California  92067

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE NORTHERN
  TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:  Thomas E. Bernhardt

  
	
   

  	
  Title:  Vice President

  
					

 

30

 

SCHEDULE 4.3

 

MATERIAL ADVERSE CHANGE/CONTINGENT
LIABILITIES

 

None.

 

 

 

SCHEDULE 4.8

 

LITIGATION

 

None.

 

 

 

SCHEDULE 4.11

 

SUBSIDIARIES

 

	
  SUBSIDIARY

  	
   

  	
  STATE

  	
   

  	
  PERCENTAGE
  OWNED

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First National Bank

  	
   

  	
  Federally
  chartered doing business in California

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pacific Western National Bank

  	
   

  	
  Federally
  chartered doing business in California

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bankshares Service Corporation  (a wholly owned subsidiary of First
  National Bank)

  	
   

  	
  California

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Desert Community Properties  (a wholly owned subsidiary of Pacific
  Western National Bank)

  	
   

  	
  California

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Charter Merchant Card Consulting Services,
  Inc.  (a wholly owned subsidiary of
  Pacific Western National Bank

  	
   

  	
  California

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Community/CA Statutory Trust

  	
   

  	
  Connecticut

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Community/CA Statutory Trust II

  	
   

  	
  Connecticut

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Community Statutory Trust III

  	
   

  	
  Delaware

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First Community/CA Statutory Trust IV

  	
   

  	
  Connecticut

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Professional Bancorp Mortgage, Inc.  (a wholly owned subsidiary of Pacific
  Western National Bank)

  	
   

  	
  California

  	
   

  	
  100

  	
  %

  
	
  First Community/CA Statutory
  Trust V

  	
   

  	
  Connecticut

  	
   

  	
  100

  	
  %

  

 

 

 

SCHEDULE 5.5(a)

 

INDEBTEDNESS

 

None.

 

 

 

SCHEDULE 5.5(b)

 

LIENS

 

None.

 

 

 

EXHIBIT A

 

AMENDED AND RESTATED

 

REVOLVING CREDIT NOTE

 

	
  $12,500,000

  	
   

  	
  Chicago,
  Illinois

  
	
   

  	
   

  	
  August          ,
  2003

  

 

FOR VALUE RECEIVED, on or before the Maturity Date, FIRST
COMMUNITY BANCORP, a corporation formed under the laws of the State
of California (“Borrower”), promises to pay to the order of THE NORTHERN
TRUST COMPANY, an Illinois banking corporation (hereafter, together
with any subsequent holder hereof, called “Lender”), at its main banking
office at 50 South LaSalle Street, Chicago, Illinois  60675, or at such other place as Lender may direct, the aggregate
unpaid principal balance of each advance (a “Loan” and collectively the
“Loans”) made by Lender to Borrower hereunder.  The total principal amount of Loans outstanding at any one time
hereunder shall not exceed TWELVE MILLION FIVE HUNDRED THOUSAND UNITED STATES
DOLLARS ($12,500,000).

 

Lender is hereby authorized by Borrower at any time
and from time to time at Lender’s sole option to attach a schedule (grid)
to this Note and to endorse thereon notations with respect to each Loan
specifying the date and principal amount thereof, and the date and amount of
each payment of principal and interest made by Borrower with respect to each
such Loan.  Lender’s endorsements as
well as its records relating to Loans shall be rebuttably presumptive evidence
of the outstanding principal and interest on the Loans, and, in the event of
inconsistency, shall prevail over any records of Borrower and any written
confirmations of Loans given by Borrower.

 

Borrower agrees to pay interest on the unpaid
principal amount from time to time outstanding hereunder on the dates and at
the rate or rates as set forth in the Revolving Credit Agreement (as
hereinafter defined).

 

Payments of both principal and interest are to be made
in immediately available funds in lawful money of the United States of America.

 

This Note evidences indebtedness incurred under an
Amended and Restated Revolving Credit Agreement dated as of the date hereof
executed by and between Borrower and Lender (and, if amended, restated or
replaced, all amendments, restatements and replacements thereto or therefor, if
any) (the “Revolving Credit Agreement;” capitalized terms not otherwise
defined herein have the same meaning herein as in the Revolving Credit
Agreement).  Reference is hereby made to
the Revolving Credit Agreement for a statement of its terms and provisions,
including without limitation those under which this Note may be paid prior to
its due date or have its due date accelerated.

 

Borrower agrees to pay upon demand all expenses
(including without limitation attorneys’ fees, legal costs and expenses, in
each case whether in or out of court, in original or appellate proceedings or
in bankruptcy) incurred or paid by Lender or any holder hereof in

 

 

 

connection with the
enforcement or preservation of its rights hereunder or under any document or
instrument executed in connection herewith. 
Borrower expressly and irrevocably waives presentment, protest, demand
and notice of any kind in connection herewith.

 

This Note is secured by the property described in the
Pledge Agreement (as such term is defined in the Revolving Credit Agreement),
to which reference is made for a description of the collateral provided thereby
and the rights of Lender and Borrower in respect of such collateral.

 

This Note and any document or instrument executed in
connection herewith shall be governed by and construed in accordance with the
internal law of the State of New York. 
Unless the context requires otherwise, wherever used herein the singular
shall include the plural and vice versa, and the use of one gender shall also
denote the other.  Captions herein are
for convenience of reference only and shall not define or limit any of the
terms or provisions hereof; references herein to Sections or provisions without
reference to the document in which they are contained are references to this
Note.  This Note shall bind Borrower,
its successors and assigns, and shall inure to the benefit of Lender, its
successors and assigns, except that Borrower may not transfer or assign any of
its rights or interest hereunder without the prior written consent of Lender.

 

This Note is a restatement of the indebtedness
evidenced by, and is a replacement of, that certain Revolving Credit Note of
Borrower dated February 12, 2002 in the face principal amount of $12,500,000
payable to the order of Lender, and nothing contained herein or in the
Revolving Credit Agreement shall be construed to deem paid or forgiven the
unpaid principal amount of, or unpaid accrued interest on, said Revolving
Credit Note outstanding at the time of its replacement by this Note, or to
release or otherwise adversely affect any lien, mortgage or security interest
securing such indebtedness or any rights of Lender against any guarantor,
surety or other party primarily or secondarily liable for such indebtedness.

 

 

	
   

  	
  FIRST COMMUNITY
  BANCORP

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

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