INDENTURE

 

 

TABLE OF CONTENTS

 

				Page
ARTICLE I. DEFINITIONS				1
Section 1.1.		Definitions		1
ARTICLE II. DEBENTURES				5
Section 2.1.		Authentication and Dating		5
Section 2.2.		Form of Trustee’s Certificate of Authentication		5
Section 2.3.		Form and Denomination of Debentures		6
Section 2.4.		Execution of Debentures		6
Section 2.5.		Exchange and Registration of Transfer of Debentures		6
Section 2.6.		Mutilated, Destroyed, Lost or Stolen Debentures		8
Section 2.7.		Temporary Debentures		9
Section 2.8.		Payment of Interest and Additional Interest		9
Section 2.9.		Cancellation of Debentures Paid, etc.		11
Section 2.10.		Computation of Interest Rate		11
Section 2.11.		CUSIP Numbers		12
Section 2.12.		Regulation S Compliance		12
ARTICLE III. PARTICULAR COVENANTS OF THE BANK				14
Section 3.1.		Payment of Principal, Premium and Interest; Agreed Treatment of the Debentures		14
Section 3.2.		Offices for Notices and Payments, etc.		14
Section 3.3.		Appointments to Fill Vacancies in Trustee’s Office		14
Section 3.4.		Provision as to Paying Agent		14
Section 3.5.		Certificate to Trustee		15
Section 3.6.		Compliance with Consolidation Provisions		15
Section 3.7.		Limitation on Dividends		15
Section 3.8.		Federal Regulatory Approval Required		16
ARTICLE IV. SECURITYHOLDERS’ LISTS AND REPORTS BY THE BANK AND THE TRUSTEE				16
Section 4.1.		Securityholders’ Lists		16
Section 4.2.		Preservation and Disclosure of Lists		17
ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT				18
Section 5.1.		Events of Default		18
Section 5.2.		Payment of Debentures on Default; Suit Therefor		19
Section 5.3.		Application of Moneys Collected by Trustee		20
Section 5.4.		Proceedings by Securityholders		21
Section 5.5.		Proceedings by Trustee		21
Section 5.6.		Remedies Cumulative and Continuing; Delay or Omission Not a Waiver		21
Section 5.7.		Direction of Proceedings and Waiver of Defaults by Majority of Securityholders		22
Section 5.8.		Notice of Defaults		22

 

i

 

Section 5.9.		Undertaking to Pay Costs		22
ARTICLE VI. CONCERNING THE TRUSTEE				23
Section 6.1.		Duties and Responsibilities of Trustee		23
Section 6.2.		Reliance on Documents, Opinions, etc.		23
Section 6.3.		No Responsibility for Recitals, etc.		24
Section 6.4.		Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debentures		25
Section 6.5.		Moneys to be Held in Trust		25
Section 6.6.		Compensation and Expenses of Trustee		25
Section 6.7.		Officers’ Certificate as Evidence		26
Section 6.8.		Eligibility of Trustee		26
Section 6.9.		Resignation or Removal of Trustee		26
Section 6.10.		Acceptance by Successor Trustee		27
Section 6.11.		Succession by Merger, etc.		28
Section 6.12.		Authenticating Agents		28
ARTICLE VII. CONCERNING THE SECURITYHOLDERS				29
Section 7.1.		Action by Securityholders		29
Section 7.2.		Proof of Execution by Securityholders		30
Section 7.3.		Who Are Deemed Absolute Owners		30
Section 7.4.		Debentures Owned by Bank Deemed Not Outstanding		30
Section 7.5.		Revocation of Consents; Future Holders Bound		30
ARTICLE VIII. SECURITYHOLDERS’ MEETINGS				31
Section 8.1.		Purposes of Meetings		31
Section 8.2.		Call of Meetings by Trustee		31
Section 8.3.		Call of Meetings by Bank or Securityholders		31
Section 8.4.		Qualifications for Voting		31
Section 8.5.		Regulations		31
Section 8.6.		Voting		32
Section 8.7.		Quorum; Actions		32
ARTICLE IX. SUPPLEMENTAL INDENTURES				33
Section 9.1.		Supplemental Indentures without Consent of Securityholders		33
Section 9.2.		Supplemental Indentures with Consent of Securityholders		34
Section 9.3.		Effect of Supplemental Indentures		35
Section 9.4.		Notation on Debentures		35
Section 9.5.		Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee		35
ARTICLE X. REDEMPTION OF SECURITIES				35
Section 10.1.		Optional Redemption		35
Section 10.2.		Notice of Redemption; Selection of Debentures		35
Section 10.3.		Payment of Debentures Called for Redemption		36
ARTICLE XI. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE				36
Section 11.1.		Bank May Consolidate, etc., on Certain Terms		36

 

ii

 

Section 11.2.				Successor Entity to be Substituted		37
Section 11.3.				Opinion of Counsel to be Given to Trustee		37
ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE						37
Section 12.1.				Discharge of Indenture		37
Section 12.2.				Deposited Moneys to be Held in Trust by Trustee		38
Section 12.3.				Paying Agent to Repay Moneys Held		38
Section 12.4.				Return of Unclaimed Moneys		38
ARTICLE XIII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS						38
Section 13.1.				Indenture and Debentures Solely Corporate Obligations		38
ARTICLE XIV. MISCELLANEOUS PROVISIONS						39
Section 14.1.				Successors		39
Section 14.2.				Official Acts by Successor Entity		39
Section 14.3.				Surrender of Bank Powers		39
Section 14.4.				Addresses for Notices, etc.		39
Section 14.5.				Governing Law		39
Section 14.6.				Evidence of Compliance with Conditions Precedent		39
Section 14.7.				Non-Business Days		40
Section 14.8.				Table of Contents, Headings, etc.		40
Section 14.9.				Execution in Counterparts		40
Section 14.10.				Separability		40
Section 14.11.				Assignment		40
ARTICLE XV. SUBORDINATION OF DEBENTURES						40
Section 15.1.				Agreement to Subordinate		40
Section 15.2.				Default on Senior Indebtedness		40
Section 15.3.				Liquidation, Dissolution, Bankruptcy		41
Section 15.4.				Subrogation		42
Section 15.5.				Trustee to Effectuate Subordination		42
Section 15.6.				Notice by the Bank		43
Section 15.7.				Rights of the Trustee; Holders of Senior Indebtedness		43
Section 15.8.				Subordination May Not Be Impaired		43
Exhibit A		Form of Junior Subordinated Debenture
Exhibit B		Form of Regulation S Certificate

 

iii

 

THIS INDENTURE, dated as of December 19, 2002, between Wilshire State Bank, a state nonmember bank organized under the laws of California (the “ Bank ”), and State Street Bank and Trust Company of Connecticut, National Association, a national banking association organized under the laws of the United States of America, as debenture trustee (the “ Trustee ”).

 

WITNESSETH:

 

WHEREAS, for its lawful corporate purposes, the Bank has duly authorized the issuance of its Floating Rate Junior Subordinated Debentures due 2012 (the “ Debentures ”) under this Indenture to provide, among other things, for the execution and authentication, delivery and administration thereof, and the Bank has duly authorized the execution of this Indenture; and

 

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

 

NOW, THEREFORE, This Indenture Witnesseth:

 

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

 

ARTICLE I.
DEFINITIONS

 

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

 

“ Additional Interest ” means interest, if any, that shall accrue on any interest on the Debentures the payment of which has not been made on the applicable Interest Payment Date and which shall accrue at the Interest Rate, compounded quarterly (to the extent permitted by law).

 

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

 

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

 

“ Bank ” means Wilshire State Bank, a state nonmember bank organized under the laws of California and, subject to the provisions of Article XI, shall include its successors and assigns.

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

“ Debenture ” or “ Debentures ” means a Temporary Debenture or a Permanent Debenture, as applicable.

 

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

 

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

 

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

 

“ Distribution Compliance Period ” has the meaning set forth in Rule 902 of Regulation S.

 

“ Distribution Period ” has the meaning set forth in Section 2.8.

 

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

 

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

 

“ FDIC ” means the Federal Deposit Insurance Corporation and any successor federal agency that is primarily responsible for insuring the deposit accounts of banks or supervising state banks that are not members of the Federal Reserve.

 

“ Federal Reserve ” means the Board of Governors of the Federal Reserve System and any successor federal agency that is primarily responsible for regulating the activities of bank holding companies and state member banks.

 

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

 

“ Interest Payment Date ,” means each March 26, June 26, September 26 and December 26 during the term of this Indenture.

 

“ Interest Rate ” means for the period beginning on (and including) the date of original issuance and ending on (but excluding) March 26, 2003 the rate per annum of 4.51% and for each Distribution Period thereafter, the Coupon Rate.

 

“ Maturity Date ” means December 26, 2012.

 

2

 

“ State Nonmember Bank Securities Laws ” means the federal laws applicable to state nonmember banks (12 U.S.C. 1811 et seq.), as amended from time to time or any successor legislation, and the regulations promulgated thereunder, including 12 C.F.R. Part 335.

 

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

 

“ Opinion of Counsel ” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Bank, or may be other counsel reasonably satisfactory to the Trustee. Each such opinion shall include the statements provided for in Section 14.6 if and to the extent required by the provisions of such Section.

 

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

 

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

 

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

 

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

 

“ Permanent Debenture ” has the meaning set forth in Section 2.12.

 

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

 

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

 

“ Principal Office of the Trustee ,” or other similar term, means the office of the Trustee, at which at any particular time its corporate trust business shall be principally administered, which at the time of the execution of this Indenture shall be 225 Asylum Street, Goodwin Square, Hartford, Connecticut 06103.

 

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

 

3

 

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

 

“ Regulation S ” means Regulation S under the Securities Act.

 

“ Regulation S Certificate ” has the meaning set forth in Section 2.12.

 

“ Release Date ” has the meaning set forth in Section 2.12.

 

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

 

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

 

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

 

“ Senior Indebtedness ” means, with respect to the Bank, all claims (including post default interest in the case of liquidation of the Bank) against the Bank, incurred, assumed or guaranteed by the Bank, having the same priority as the Bank’s obligations to its depositors, its obligations under bankers’ acceptances and letters of credit, and its obligations to any other creditors (including its obligations to the Federal Reserve, FDIC, and any rights acquired by the FDIC as a result of loans made by the FDIC to the Bank or the purchase or guarantee of any of its assets by the FDIC pursuant to the provisions of 12 USC §1823(c), (d) or (e)), whether now outstanding or hereafter incurred, or any higher priority, and the principal, premium, if any, and interest in respect thereof, whether incurred on or prior to the date of this Indenture or thereafter incurred. Notwithstanding the foregoing, “Senior Indebtedness” shall not include Debentures issued pursuant to this Indenture or obligations with respect to which in the instrument creating or evidencing the same, or pursuant to which the same is outstanding, it is provided that such obligations are pari passu, junior or otherwise not superior in right of payment to the Debentures. Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the subordination provisions irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness.

 

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

 

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

 

4

 

“ Telerate Page 3750 ” has the meaning set forth in Section 2.10.

 

“ Temporary Debenture ” has the meaning set forth in Section 2.12.

 

“ Trustee ” means State Street Bank and Trust Company of Connecticut, National Association, and, subject to the provisions of Article VI hereof; shall also include its successors and assigns as Trustee hereunder.

 

ARTICLE II.
DEBENTURES

 

Section 2.1.                                 Authentication and Dating . Upon the execution and delivery of this Indenture, or from time to time thereafter, Debentures in an aggregate principal amount not in excess of $10,000,000.00 may be executed and delivered by the Bank to the Trustee for authentication, and the Trustee shall thereupon authenticate and make available for delivery said Debentures to or upon the written order of the Bank, signed by its Chairman of the Board of Directors, Chief Executive Officer, Vice Chairman, President, one of its Managing Directors or one of its Vice Presidents without any further action by the Bank hereunder. In authenticating such Debentures, and accepting the additional responsibilities under this Indenture in relation to such Debentures, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon:

 

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

 

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

 

(1)                                   that such Debentures, when authenticated and delivered by the Trustee and issued by the Bank in each case in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Bank, subject to or limited by applicable bankruptcy, insolvency, reorganization, conservatorship, receivership, moratorium and other statutory or decisional laws relating to or affecting creditors’ rights or the reorganization of financial institutions (including, without limitation, preference and fraudulent conveyance or transfer laws), heretofore or hereafter enacted or in effect, affecting the rights of creditors generally; and

 

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

 

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

 

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

 

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

 

5

 

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

 

State Street Bank and Trust Company of Connecticut, National Association, as Trustee

 

By
Authorized Signer

 

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

 

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

 

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

 

Every Debenture shall be dated the date of its authentication.

 

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

 

Debentures to be exchanged may be surrendered at the Principal Office of the Trustee or at any office or agency to be maintained by the Bank for such purpose as provided in Section 3.2, and the Bank shall execute, the Bank or the Trustee shall register and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange therefor the Debenture or Debentures which the Securityholder making the exchange shall be entitled to receive. Upon due presentment for registration of

 

6

 

SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AS APPLICABLE, THE SECURITIES ACT OR THE STATE NONMEMBER BANK SECURITIES LAWS, SUBJECT TO THE BANK’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE BANK.

 

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

 

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

 

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

 

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

 

8

 

and the Trustee evidence to their satisfaction of the destruction, loss or theft of such Debenture and of the ownership thereof.

 

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

 

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

 

Section 2.7.                                 Temporary Debentures . Pending the preparation of definitive Debentures, the Bank may execute and the Trustee shall authenticate and make available for delivery temporary Debentures that are typed, printed or lithographed. Temporary Debentures shall be issuable in any authorized denomination, and substantially in the form of the definitive Debentures in lieu of which they are issued but with such omissions, insertions and variations as may be appropriate for temporary Debentures, all as may be determined by the Bank. Every such temporary Debenture shall be executed by the Bank and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Debentures. Without unreasonable delay the Bank will execute and deliver to the Trustee or the Authenticating Agent definitive Debentures and thereupon any or all temporary Debentures may be surrendered in exchange therefor, at the principal corporate trust office of the Trustee or at any office or agency maintained by the Bank for such purpose as provided in Section 3.2, and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange for such temporary Debentures a like aggregate principal amount of such definitive Debentures. Such exchange shall be made by the Bank at its own expense and without any charge therefor except that in case of any such exchange involving a registration of transfer the Bank may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Debentures shall in all respects be entitled to the same benefits under this Indenture as definitive Debentures authenticated and delivered hereunder.

 

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

 

9

 

called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Debenture will be paid upon presentation and surrender of such Debenture.

 

Each Debenture shall bear interest for the period beginning on (and including) the date of original issuance and ending on (but excluding) March 26, 2003 at a rate per annum of 4.51%, and shall bear interest for each successive period beginning on (and including) March 26, 2003, and each succeeding Interest Payment Date, and ending on (but excluding) the next succeeding Interest Payment Date (each, a “ Distribution Period ”) at a rate per annum equal to the 3-Month LIBOR, determined as described in Section 2.10, plus 3.10% (the “ Coupon Rate ”); provided ,  however , that prior to December 26, 2007, the Coupon Rate shall not exceed 11.75%, applied to the principal amount thereof, until the principal thereof becomes due and payable, and on any overdue principal and to the extent that payment of such interest is enforceable under applicable law (without duplication) on any overdue installment of interest at the Interest Rate compounded quarterly. Interest shall be payable quarterly in arrears on each Interest Payment Date with the first installment of interest to be paid on March 26, 2003.

 

Any interest on any Debenture, including Additional Interest, that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “ Defaulted Interest ”) shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Bank to the Persons in whose names such Debentures (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Bank shall notify the Trustee in writing at least 25 days prior to the date of the proposed payment of the amount of Defaulted Interest proposed to be paid on each such Debenture and the date of the proposed payment, and at the same time the Bank shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Bank of such special record date and, in the name and at the expense of the Bank, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at its address as it appears in the Debenture Register, not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Debentures (or their respective Predecessor Securities) are registered on such special record date and shall be no longer payable.

 

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

 

The Bank shall not pay any interest on the Debentures while it remains in default in the payment of any assessment due to the FDIC; provided , that, if such default is due to a dispute between the Bank and the FDIC over the amount of such assessment, this limitation shall not apply, if the Bank deposits security satisfactory to the FDIC for payment upon final determination of the issue.

 

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

 

10

 

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

 

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

 

Section 2.10.        Computation of Interest Rate . The amount of interest payable for the Distribution Period commencing on March 26, 2003 and each succeeding Distribution Period will be calculated by applying the Interest Rate to the principal amount outstanding at the commencement of the Distribution Period and multiplying each such amount by the actual number of days in the Distribution Period concerned divided by 360. In the event that any date on which interest is payable on the Debentures is not a Business Day, then payment of interest payable on such date shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is 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 date such payment was originally payable. All percentages resulting from any calculations on the Debentures will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward)).

 

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

 

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

 

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

 

(3)                                   if fewer than two such quotations are provided as requested in clause (2) above, the Trustee will request four major New York City banks to provide such banks’ offered quotations (expressed as percentages per annum) to leading European banks for loans in U.S.

 

11

 

dollars as of 11:00 a.m. (London time) on such Determination Date. If at least two such quotations are provided, 3-Month LIBOR will be the arithmetic mean of such quotations; and

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2.11.                     CUSIP Numbers . The Bank in issuing the Debentures may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Securityholders; provided , however , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Debentures or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Debentures, and any such redemption shall not be affected by any defect in or omission of such numbers. The Bank will promptly notify the Trustee in writing of any change in the CUSIP numbers.

 

Section 2.12.                     Regulation S Compliance .

 

(a)                              Notwithstanding anything in this Article II to the contrary all Debentures issued on or before the expiration of the Distribution Compliance Period will be in the form of a temporary Debenture (“ Temporary Debentures ”) and will contain the following additional legend:

 

12

 

THIS DEBENTURE IS A TEMPORARY DEBENTURE FOR PURPOSES OF REGULATION S UNDER THE SECURITIES ACT (AS DEFINED BELOW). NEITHER THIS TEMPORARY DEBENTURE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO BELOW. NO BENEFICIAL OWNERS OF THIS TEMPORARY DEBENTURE SHALL BE ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.

 

Holders of a beneficial interest in Debentures sold in reliance on Regulation S are prohibited from receiving distributions or from exchanging beneficial interests in Temporary Debentures for a beneficial interest in a Permanent Debenture until the later of (i) the expiration of the Distribution Compliance Period (the “ Release Date ”) and (ii) the furnishing of a certificate, substantially in the form of Exhibit B attached hereto, certifying that the beneficial owner of the Temporary Debenture is not a “U.S. Person” as defined in Section 902 of Regulation S (a “ Regulation S Certificate ”).

 

(b)                                  Any interest in a Debenture evidenced by a Temporary Debenture is exchangeable for an interest in a Debenture, authenticated and delivered in substantially the form attached as Exhibit A hereto, without the legend referenced in Section 2.12(a) (the “ Permanent Debenture ”) upon the later of (i) the Release Date and (ii) the furnishing of a Regulation S Certificate.

 

(c)                                   On or prior to the Release Date, each holder of a Temporary Debenture shall deliver to the Trustee a Regulation S Certificate; provided ,  however , that any holder of a Temporary Debenture on the Release Date that has previously delivered a Regulation S Certificate hereunder shall not be required to deliver any subsequent Regulation S Certificate (unless the certificate previously delivered is no longer true as of such subsequent date, in which case such holder shall promptly notify the Trustee thereof and shall deliver an updated Regulation S Certificate). No Securityholder shall be entitled to receive an interest in a Permanent Debenture or any payment of principal of or interest on or any other payment with respect to its beneficial interest in a Temporary Debenture prior to the Trustee receiving such Regulation S Certificate.

 

(d)                                  Any payments of principal of, interest on or any other payment on a Temporary Debenture received by the Trustee with respect to any Debenture owned by a Securityholder that has not delivered the Regulation S Certificate required by this Section 2.12 shall be held by the Trustee. The Trustee shall remit such payments to the applicable Securityholder only after the Trustee has received the requisite Regulation S Certificate, at which time the Trustee shall forward such payments to the Securityholder that is entitled thereto on its records.

 

(e)                                   Each Securityholder shall exchange its interest in a Temporary Debenture for an interest in a Permanent Debenture on or after the Release Date upon furnishing to the Trustee the Regulation S Certificate pursuant to the terms of this Section 2.12. On and after the Release Date, upon receipt by the Trustee of any Regulation S Certificate described in the immediately preceding sentence, the Bank shall execute and, upon receipt of an order to authenticate, the Authentication Agent shall authenticate and deliver the Permanent Debenture; provided ,  however , that a Permanent Debenture may have been previously executed by the Bank and an order to authenticate specifying the date on which authentication is to take place may have been delivered by the Bank to the Trustee prior to the Release Date.

 

13

 

ARTICLE III.
PARTICULAR COVENANTS OF THE BANK

 

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

 

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

 

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

 

Section 3.2.                            Offices for Notices and Payments, etc . So long as any of the Debentures remain outstanding, the Bank will maintain in Hartford, Connecticut, an office or agency where the Debentures may be presented for payment, an office or agency where the Debentures may be presented for registration of transfer and for exchange as in this Indenture provided and an office or agency where notices and demands to or upon the Bank in respect of the Debentures or of this Indenture may be served. The Bank will give to the Trustee written notice of the location of any such office or agency and of any change of location thereof. Until otherwise designated from time to time by the Bank in a notice to the Trustee, or specified as contemplated by Section 2.5, such office or agency for all of the above purposes shall be the office or agency of the Trustee. In case the Bank shall fail to maintain any such office or agency in Hartford, Connecticut, or shall fail to give such notice of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the Principal Office of the Trustee.

 

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

 

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

 

Section 3.4.                            Provision as to Paying Agent .

 

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

 

14

 

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

 

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

 

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

 

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

 

Whenever the Bank shall have one or more paying agents for the Debentures, it will, on or prior to each due date of the principal of and premium, if any, or interest, if any, on the Debentures, deposit with a paying agent a sum sufficient to pay the principal, premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto and (unless such paying agent is the Trustee) the Bank shall promptly notify the Trustee in writing of its action or failure to act.

 

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

 

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

 

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

 

Section 3.6.                                 Compliance with Consolidation Provisions . The Bank will not, while any of the Debentures remain outstanding, consolidate with, or merge into, or merge into itself, or sell or convey all or substantially all of its property to any other Person unless the provisions of Article XI hereof are complied with.

 

Section 3.7.                                 Limitation on Dividends . If there shall have occurred and be continuing an Event of Default, then the Bank shall not, and shall not allow any Affiliate of the Bank to, (x) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Bank’s capital stock or its Affiliates’ capital stock (other than payments of dividends or distributions to the Bank) or make any guarantee payments with respect to the foregoing or (y) make

 

15

 

any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities of the Bank or any Affiliate that rank pari passu in all respects with or junior in interest to the Debentures (other than, with respect to clauses (x) and (y) above, (1) repurchases, redemptions or other acquisitions of shares of capital stock of the Bank in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants, in connection with a dividend reinvestment or stockholder stock purchase plan or in connection with the issuance of capital stock of the Bank (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Event of Default, (2) as a result of any exchange or conversion of any class or series of the Bank’s capital stock (or any capital stock of a subsidiary of the Bank) for any class or series of the Bank’s capital stock or of any class or series of the Bank’s indebtedness for any class or series of the Bank’s capital stock, (3) the purchase of fractional interests in shares of the Bank’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (4) any declaration of a dividend in connection with any stockholders’ rights plan, or the issuance of rights, stock or other property under any stockholders’ rights plan, or the redemption or repurchase of rights pursuant thereto, or (5) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock and any cash payments in lieu of fractional shares issued in connection therewith).

 

Section 3.8.                            Regulatory Approval Required . The Debentures may not be repaid in the case of an acceleration due to an Event of Default or voluntarily redeemed without the prior written approval of or, if applicable, written notice to the FDIC. If such approval is necessary, within 30 days after receipt of any declaration of acceleration pursuant to Section 5.1, the Bank will apply to the FDIC for written approval of repayment prior to maturity. In the event that the Bank obtains such prior written approval, the Bank shall notify the Securityholders, and the Trustee will arrange for prompt payment on the Debentures.

 

No payment shall at any time be made on account of the principal of this Debenture, unless following such payment the aggregate of the Bank’s shareholders’ equity and capital notes or debentures thereafter outstanding shall be the equal of such aggregate at the date of the original issue of this Debenture, or as otherwise authorized by the California Commissioner of Financial Institutions.

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

(a)                              the Bank defaults in the payment of any interest upon any Debenture when it becomes due and payable, and fails to cure such default for a period of 30 days; or

 

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

 

(c)                              the Bank defaults in the performance of, or breaches, any of its covenants or agreements in this Indenture or in the terms of the Debentures established as contemplated in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Bank by the Trustee or to the Bank and the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding Debentures, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

 

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

 

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

 

If an Event of Default occurs and is continuing with respect to the Debentures, then, and in each and every such case, unless the principal of the Debentures shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Debentures then outstanding hereunder, by notice in writing to the Bank (and to the Trustee if given by Securityholders), may declare the entire principal of the Debentures and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.

 

The foregoing provisions, however, are subject to the condition that if, at any time after the principal of the Debentures shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Bank shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Debentures and the principal of and premium, if any, on the Debentures which shall

 

18

 

have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and Additional Interest) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and all other amounts due to the Trustee pursuant to Section 6.6, and if any and all Events of Default under this Indenture, other than the non-payment of the principal of or premium, if any, on Debentures which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein—then and in every such case the holders of a majority in aggregate principal amount of the Debentures then outstanding, by written notice to the Bank and to the Trustee, may waive all defaults and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon.

 

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

 

Section 5.2.                            Payment of Debentures on Default; Suit Therefor . The Bank covenants that upon the occurrence of an Event of Default pursuant to Section 5.1(a) or Section 5.1(b) then, upon demand of the Trustee, the Bank will pay to the Trustee, for the benefit of the holders of the Debentures the whole amount that then shall have become due and payable on all Debentures for principal and premium, if any, or interest, or both, as the case may be, with Additional Interest accrued on the Debentures (to the extent that payment of such interest is enforceable under applicable law); and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including a reasonable compensation to the Trustee, its agents, attorneys and counsel, and any other amounts due to the Trustee under Section 6.6. In case the Bank shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Bank or any other obligor on such Debentures and collect in the manner provided by law out of the property of the Bank or any other obligor on such Debentures wherever situated the moneys adjudged or decreed to be payable.

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

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