Exhibit (10)(P)

FISCAL AND PAYING AGENCY AGREEMENT

Between

VALLEY NATIONAL BANK,

Issuer

and

WILMINGTON TRUST COMPANY,

Fiscal and Paying Agent

 

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

Dated as of

July 13, 2005

 

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

5.0% Subordinated Notes

Due July 15, 2015

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

TABLE OF CONTENTS

 

     Page

ARTICLE I

  

APPOINTMENT 1

  

Section 1.1.

  

Appointment of Fiscal and Paying Agent and Registrar

   1

ARTICLE II

  

THE SUBORDINATED NOTES

   1

Section 2.1.

  

Issuance and Form of Subordinated Notes

   1

Section 2.2.

  

Certificates of Authorized Representatives of the Issuer

   2

Section 2.3.

  

Completion, Authentication and Delivery

   2

Section 2.4.

  

Denominations

   5

Section 2.5.

  

Proceeds of Sale of the Subordinated Notes; Issuance of Certificated Securities

   5

Section 2.6.

  

Transfer and Exchange of Subordinated Notes

   5

Section 2.7.

  

Registration; Registration of Transfer and Exchange

   8

Section 2.8.

  

Persons Deemed Owners

   8

Section 2.9.

  

Mutilated, Lost, Stolen or Destroyed Global Subordinated Notes

   9

Section 2.10.

  

Subordinated Notes Acquired by the Issuer

   9

Section 2.11.

  

Redemption

   9

Section 2.12.

  

Repayment Prior to Maturity

   9

ARTICLE III

  

THE FISCAL AND PAYING AGENT

   9

Section 3.1.

  

Payment of Subordinated Notes

   9

Section 3.2.

  

Information Regarding Amounts Payable

   10

Section 3.3.

  

Deposit of Funds

   10

Section 3.4.

  

Money for Subordinated Note Payments to be Held in Trust

   10

Section 3.5.

  

Additional Responsibilities

   11

ARTICLE IV

  

CONDITIONS OF FISCAL AND PAYING AGENT’S OBLIGATIONS

   11

Section 4.1.

  

Liability

   11

Section 4.2.

  

Indemnification

   11

Section 4.3.

  

Officer’s Certificate

   12

Section 4.4.

  

Opinion of Counsel and Officer’s Certificate

   12

Section 4.5.

  

Other Rights of the Fiscal and Paying Agent

   12

Section 4.6.

  

Compensation of the Fiscal and Paying Agent

   13

 

i

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

ARTICLE V

  

RESIGNATION OR REMOVAL OF FISCAL AND PAYING AGENT

   13

Section 5.1.

  

Resignation or Removal

   13

Section 5.2.

  

Successor Fiscal and Paying Agent

   14

Section 5.3.

  

Successor by Merger, etc.

   14

ARTICLE VI

  

MISCELLANEOUS

   15

Section 6.1.

  

Notices

   15

Section 6.2.

  

Parties

   15

Section 6.3.

  

Governing Law

   15

Section 6.4.

  

Severability

   16

Section 6.5.

  

Effect of Headings

   16

Section 6.6.

  

Amendments; Waivers; Notices of Acceleration After Events of Default; Compliance
Certificate

   16

Section 6.7.

  

Further Issues

   19

Section 6.8.

  

Actions Due on Saturdays, Sundays and Holidays

   19

Section 6.9.

  

Agreement to Pay Attorneys’ Fees and Other Expenses

   19

Section 6.10.

  

Survival

   19

Section 6.11.

  

No Implied Waivers

   20

Section 6.12.

  

Counterparts

   20

Section 6.13.

  

Term

   20

 

ii

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

This Fiscal and Paying Agency Agreement (as may be amended, supplemented or
otherwise modified from time to time, and together with all Exhibits hereto,
this “Agreement”) is dated as of July 13, 2005 between VALLEY NATIONAL BANK, a
national banking association organized under the laws of the United States of
America (the “Issuer”), and WILMINGTON TRUST COMPANY, a banking corporation
organized under the laws of the State of Delaware (the “Fiscal and Paying
Agent”).

WHEREAS, the Issuer has, by a Purchase Agreement dated July 7, 2005, agreed to
issue $100,000,000 aggregate principal amount of the Issuer’s 5.0% Subordinated
Notes due July 15, 2015 (the “Subordinated Notes”); and

WHEREAS, the Issuer desires to appoint the Fiscal and Paying Agent as fiscal and
paying agent of the Issuer with respect to the preparation, authentication,
delivery, registration and payment of the Subordinated Notes.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I

APPOINTMENT

Section 1.1. Appointment of Fiscal and Paying Agent and Registrar. The Fiscal
and Paying Agent is hereby appointed by the Issuer as fiscal and paying agent
for the Subordinated Notes on the terms and conditions specified in this
Agreement, and the Fiscal and Paying Agent hereby accepts such appointment
subject to all of the rights, privileges and protections in this Agreement. The
Issuer hereby appoints the Fiscal and Paying Agent as registrar for the
Subordinated Notes.

ARTICLE II

THE SUBORDINATED NOTES

Section 2.1. Issuance and Form of Subordinated Notes. The Issuer represents and
warrants that the Subordinated Notes will be initially issued, and thereafter
the Subordinated Notes shall only be transferred, to persons who are
institutional “accredited investors” as defined in Rule 501(a)(1), (2), (3) or
(7) (“Institutional Accredited Investors”) promulgated by the Securities
Exchange Commission under the Securities Act of 1933, as amended (“Securities
Act”). Except as otherwise provided herein, the Subordinated Notes will be
represented by one or more global certificates, each such certificate being
hereinafter called a “Global Subordinated Note.” All Global Subordinated Notes
shall be registered in the name of a nominee of The Depository Trust Company
(“DTC”), as depository. All Global Subordinated Notes shall be in substantially
the form attached hereto as Exhibit A, the provisions of which are expressly
incorporated into and made a part of this Agreement. All Global Notes will bear
the restricted note legend set forth in Exhibit A and may have such appropriate
insertions, omissions, variations or substitutions as are required or permitted
by, and not inconsistent with, this Agreement. The Global Notes may also have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any applicable law
or with any applicable rules or regulations made pursuant thereto or with the
rules or regulations of any securities exchange or governmental agency or as
may,

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

consistently herewith, be determined by the officers of the Issuer executing
such Global Subordinated Notes, as evidenced by their execution thereof.
Beneficial interests in Global Subordinated Notes will be shown on, and
transfers thereof will be effected only through, records maintained by DTC or
its nominee and its participants.

Purchasers of Subordinated Notes may receive certificated Subordinated Notes in
definitive form (each, a “Certificated Subordinated Note”) only as provided in
Section 2.5(b) below and in accordance with the procedures set forth in
Section 2.6 below. The Certificated Subordinated Notes (which shall be
substantially in the form of, and bear the restricted note legend set forth in,
Exhibit A hereto) shall be typed, printed, lithographed or engraved or produced
by any combination of these methods on steel engraved borders or may be produced
in any other manner, all as determined by the officers or other authorized
representatives of the Issuer executing such Certificated Subordinated Notes, as
evidenced by their execution of such Certificated Subordinated Notes.

Except as provided in Section 2.5(b) or 2.6 below, owners of beneficial
interests in Global Subordinated Notes will not be entitled to receive
Certificated Subordinated Notes.

Section 2.2. Certificates of Authorized Representatives of the Issuer. The
Issuer shall furnish the Fiscal and Paying Agent with a certificate of the
Secretary, Assistant Secretary or other duly authorized officer of the Issuer
certifying the incumbency and specimen signatures of representatives of the
Issuer authorized to execute, attest and deliver the Subordinated Notes and
other documents on behalf of the Issuer and to instruct the Fiscal and Paying
Agent regarding the completion and delivery of the Subordinated Notes (each, an
“Authorized Representative”). Until the Fiscal and Paying Agent receives a
subsequent incumbency certificate of the Issuer, the Fiscal and Paying Agent
shall be entitled to rely on the last such certificate delivered to it for
purposes of determining the Authorized Representatives.

Section 2.3. Completion, Authentication and Delivery.

(a) All Subordinated Notes shall be issued and delivered in accordance with this
Agreement, and, in the case of the Global Subordinated Notes, a letter of
representations from the Issuer to DTC dated no later than the date hereof (the
“Letter of Representations”). Notwithstanding the foregoing, the Fiscal and
Paying Agent shall not be required to perform any duties on any day that is not
a Business Day (as hereinafter defined). All instructions regarding the
completion and delivery of Subordinated Notes shall be given in the form of a
writing, executed on behalf of the Issuer by an Authorized Representative,
delivered or transmitted by mail, courier, confirmed telex, telecopy, E-mail or
other means acceptable to the Fiscal and Paying Agent and shall specify the form
and contents of such Subordinated Notes consistent with this Agreement and
otherwise provide the Fiscal and Paying Agent sufficient information to perform
its obligations under this Section 2.3. Upon receipt of instructions as
described in the preceding sentence and the Global Subordinated Note or Notes
and Certificated Subordinated Notes executed by the Issuer (which signature may
be facsimile), the Fiscal and Paying Agent shall:

(i) complete (A) a Global Subordinated Note or Notes representing one or more
Subordinated Notes and (B) one or more Certificated Subordinated Notes indicated
in such instructions, in each case in accordance with such instructions;

 

2

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

(ii) manually authenticate such Global Subordinated Note or Notes and
Certificated Subordinated Notes by any one of the officers or employees of the
Fiscal and Paying Agent duly authorized and designated by it for such purpose;

(iii) deliver any Global Subordinated Note or Notes to DTC or pursuant to DTC’s
written instructions; and

(iv) deliver any Certificated Subordinated Notes pursuant to the Issuer’s
instructions.

(b) If any Subordinated Note has been executed on behalf of the Issuer and
authenticated by the Fiscal and Paying Agent by an officer or representative who
was duly authorized for such purpose at such time, but who is not so designated
at the time said Subordinated Note is to be paid, the Subordinated Note shall be
paid by the Issuer, and the Fiscal and Paying Agent is hereby authorized to
apply funds received from the Issuer for such payment, notwithstanding that the
authority of said officer or representative has been terminated between the time
of execution and the time of payment.

(c) In the event a discrepancy exists between the instructions as originally
received by the Fiscal and Paying Agent and any subsequent written confirmation
thereof, such original instructions will be deemed controlling, if action has
already been taken in reliance on such original instructions. The Fiscal and
Paying Agent shall give notice to the Issuer of any such discrepancy known to it
within two (2) Business Days of the receipt of such subsequent written
confirmation.

(d) All instructions regarding completion and delivery of Subordinated Notes
must be received (i) in the case of the original issue of Subordinated Notes, by
the Fiscal and Paying Agent by the close of business on the Business Day
preceding the original issue date as set forth in Section 2.7(c), and (ii) in
the case of any subsequent instruction to complete and deliver Subordinated
Notes, by 2:00 p.m. (Wilmington, Delaware time) on the Business Day preceding
the date of delivery, or in either case, such shorter period as the Fiscal and
Paying Agent may determine. For purposes hereof, the term “Business Day” shall
mean any day that is not a Saturday or Sunday and that is not a day on which
banks in New York, New York, Wilmington, Delaware or the State of New Jersey are
generally authorized or required by law or executive order to be closed.

(e) The Fiscal and Paying Agent shall incur no liability to the Issuer or to any
other person or entity, including any holder, purchaser, transferor or
transferee of Subordinated Notes, in acting or refraining from taking any action
hereunder upon instructions contemplated hereby which the officer of the Fiscal
and Paying Agent in receipt of such instructions believed in good faith to have
been given by an Authorized Representative.

(f) Each instruction given to the Fiscal and Paying Agent in accordance with
this Section 2.3 shall constitute a representation and warranty to the Fiscal
and Paying Agent by

 

3

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

the Issuer that the issuance and delivery of the Subordinated Notes to which the
instruction relates have been duly and validly authorized by the Issuer, that
such Subordinated Notes when completed, authenticated and delivered pursuant
hereto, will constitute valid and legally binding obligations of the Issuer, and
that the Fiscal and Paying Agent’s appointment to act for the Issuer hereunder
has been duly authorized by all necessary corporate action of the Issuer, and
that the Fiscal and Paying Agent shall be fully defended and indemnified
hereunder in connection with any liability arising out of or related to any
action taken by the Fiscal and Paying Agent in good faith reliance on such
instruction.

(g) The Issuer hereby represents and warrants to the Fiscal and Paying Agent
that:

(i) The Issuer is duly organized and validly existing as a national banking
association in good standing under the laws of the United States of America,
with corporate power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted.

(ii) The Issuer has the power and authority to execute and deliver this
Agreement and to carry out its terms, and the execution, delivery and
performance of this Agreement has been duly authorized by the Issuer by all
necessary corporate action.

(iii) The Issuer has duly executed and delivered this Agreement, and this
Agreement constitutes a legal, valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization and
other similar laws affecting the enforcement of creditors’ rights in general and
by general equitable principles, regardless of whether such enforceability is
considered in a proceeding at law or in equity.

(iv) The consummation of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof do not and will not (A) conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, the charter or by-laws of the
Issuer, or any indenture, agreement or other instrument to which the Issuer is a
party or by which it is bound, (B) result in the creation or imposition of any
lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument or (C) violate any law or, to the best of the
Issuer’s knowledge, any order, rule or regulation applicable to the Issuer of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Issuer or its
properties.

(v) There are no proceedings or investigations pending or, to the Issuer’s
knowledge, threatened before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Issuer or its
properties (A) asserting the invalidity of this Agreement or the Subordinated
Notes, (B) seeking to prevent the issuance of the Subordinated Notes or the
consummation of any of the transactions contemplated by this Agreement or the
Subordinated Notes, or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Issuer of its obligations
under, or the validity or enforceability of, this Agreement.

 

4

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

Section 2.4. Denominations. The Subordinated Notes shall be issuable only in
denominations of $250,000 and any amount in excess thereof that is a whole
multiple of $1,000. Subordinated Notes may not subsequently be transferred or
exchanged by a holder for Subordinated Notes in denominations of less than
$250,000.

Section 2.5. Proceeds of Sale of the Subordinated Notes; Issuance of
Certificated Securities.

(a) Funds received in payment for Subordinated Notes issued by the Issuer shall
be credited by the Fiscal and Paying Agent to an account of the Issuer, as
instructed in writing by an Authorized Representative of the Issuer.

(b) If at any time (i) DTC notifies the Issuer in writing that it is unwilling
or unable to continue as depository for the Global Subordinated Notes or if DTC
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, and a successor depository is not appointed by the Issuer
within ninety days after the effective date of DTC’s ceasing to act as
depository for the Global Subordinated Notes, (ii) the Issuer, at its option,
notifies DTC and the Fiscal and Paying Agent in writing that it elects to cause
the issuance of Subordinated Notes in definitive form or (iii) any event shall
have happened and be continuing which, after notice or lapse of time, or both,
would constitute an Event of Default (as defined in the Subordinated Notes) with
respect to the Subordinated Notes, the Issuer will execute, and the Fiscal and
Paying Agent will, upon receipt of instructions in writing from the Issuer,
authenticate and deliver Subordinated Notes of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of the Global Subordinated Notes then outstanding in exchange for such Global
Subordinated Notes. Any such certificated Subordinated Notes will be issued in
fully registered form to the persons designated in writing by DTC as the
beneficial owners thereof, without coupons, in authorized denominations.

Section 2.6. Transfer and Exchange of Subordinated Notes.

(a) Transfer of Global Subordinated Note for Certificated Subordinated Note.
Notwithstanding any provision to the contrary herein, so long as a Global
Subordinated Note remains outstanding and is held by or on behalf of DTC,
transfers of such Global Subordinated Note or a beneficial interest therein, in
whole or in part, shall be made only in accordance with this Section 2.6(a) as
follows:

(i) A holder of a beneficial interest in a Global Subordinated Note deposited
with DTC may transfer its interest in such Global Subordinated Note in the form
of an interest in one or more Certificated Subordinated Notes subject to the
rules and procedures of DTC, as in effect from time to time, and in accordance
with this Section 2.6(a). A holder of a beneficial interest in a Global
Subordinated Note may transfer such interest in the form of one or more
Certificated Subordinated Notes, only in denominations of $250,000 or any amount
in excess thereof that is a whole multiple of $1,000.

(ii) Upon receipt by the Fiscal and Paying Agent of (A) written instructions
given in accordance with DTC’s procedures from a holder of a beneficial

 

5

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

interest in a Global Subordinated Note directing the Fiscal and Paying Agent to
debit or to cause to be debited a beneficial interest in a Global Subordinated
Note in a specified principal amount from such holder’s account and to provide a
beneficial interest of an equivalent principal amount in the form of one or more
Certificated Subordinated Notes, (B) a written order signed by an Authorized
Representative of the Issuer for the authentication and delivery of Certificated
Subordinated Notes and confirming that all conditions precedent thereto under
this Agreement have been satisfied, along with a copy of an executed transferee
letter in the form of Exhibit B hereto given by the transferee and
(C) Certificated Subordinated Notes executed by the Issuer in a sufficient
quantity to the Fiscal and Paying Agent, which delivery shall be made no later
than 30 days after the first date on which interests in a Global Subordinated
Note are to be made available in definitive form, the Fiscal and Paying Agent
shall instruct DTC to reduce the Global Subordinated Note by the aggregate
principal amount of the beneficial interest in the Global Subordinated Note to
be so exchanged or transferred and the Fiscal and Paying Agent shall,
concurrently with such reduction, authenticate and deliver in accordance with
the Issuer’s written instructions one or more Certificated Subordinated Notes in
an equivalent aggregate principal amount. In no event will the Fiscal and Paying
Agent be liable for the costs and expenses of printing, preparing or delivering
any Certificated Subordinated Notes.

(b) Transfer of Certificated Subordinated Note for Global Subordinated Note.

(i) A registered holder of a Certificated Subordinated Note may transfer such
Certificated Subordinated Note in the form of a beneficial interest in a Global
Subordinated Note, only in denominations of $250,000 or any amount in excess
thereof that is a whole multiple of $1,000 and in accordance with the
restrictions set forth on the face of such Certificated Subordinated Note. If a
registered holder of a Certificated Subordinated Note wishes at any time to
transfer such Subordinated Note to a person who wishes to take delivery in the
form of a beneficial interest in a Global Subordinated Note, such holder may,
subject to the rules and procedures of DTC, transfer or cause the transfer of
such Certificated Subordinated Note for an equivalent beneficial interest in a
Global Subordinated Note upon presentation and surrender of the Certificated
Subordinated Note at the office of the Fiscal and Paying Agent, accompanied by a
written instrument of transfer in form and substance satisfactory to the Issuer
and the Fiscal and Paying Agent duly executed by the registered holder thereof
or his attorney-in-fact duly authorized in writing.

(ii) Upon receipt by the Fiscal and Paying Agent of the surrendered Certificated
Subordinated Note from the transferor and the written instrument of transfer
referred to in clause (i) above, the Fiscal and Paying Agent shall instruct DTC,
in accordance with DTC’s procedures, to increase the principal amount of the
Global Subordinated Note by the aggregate principal amount of such surrendered
Certificated Subordinated Note. The Fiscal and Paying Agent shall record the
transfer in the Security Register (as hereinafter defined) in accordance with
Section 2.7, in the names specified in the written instrument of transfer and in
the principal amounts designated by the transferee (which shall be the aggregate
of the face amounts of the Certificated Subordinated Notes surrendered by the
transferor).

 

6

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

(c) Transfer and Exchange of Certificated Subordinated Note for Certificated
Subordinated Note.

(i) Transfer of Certificated Note. The registered holder of any Certificated
Subordinated Note may transfer the same in whole or in part only in
denominations of $250,000 or any amount in excess thereof that is a whole
multiple of $1,000 by surrendering at the office of the Fiscal and Paying Agent
such Certificated Subordinated Note with the form of transfer thereon duly
endorsed by the registered holder thereof or his attorney-in-fact duly
authorized in writing. Upon receipt by the Fiscal and Paying Agent of
(A) Certificated Subordinated Notes properly presented for transfer, (B) an
order signed by an Authorized Representative of the Issuer for the
authentication and delivery of Certificated Subordinated Notes and confirming
that all conditions precedent thereto under this Agreement have been satisfied,
along with a copy of an executed transferee letter in the form of Exhibit B
hereto given by the transferee and (C) Certificated Subordinated Notes executed
by the Issuer in a sufficient quantity to the Fiscal and Paying Agent, which
delivery shall be made no later than 30 days after the first date on which the
Certificated Subordinated Notes were submitted for transfer at the office of the
Fiscal and Paying Agent, the Fiscal and Paying Agent shall promptly authenticate
and deliver to the transferee, or send by mail (at the risk of the transferee)
to such address as the transferee may request in writing, Certificated
Subordinated Notes registered in the name of such transferee, for the same
aggregate principal amount as was transferred. In the case of the transfer of
any Certificated Subordinated Notes in part, the Fiscal and Paying Agent shall
also promptly authenticate and deliver to the transferor or send by mail (at the
risk of the transferor) to such address as the transferor may request in
writing, Certificated Subordinated Notes registered in the name of the
transferor, for the aggregate principal amount that was not transferred. No
transfer of any Certificated Subordinated Notes may be made unless the request
for such transfer is made by the registered holder or by a duly authorized
attorney-in fact of such holder at the office of the Fiscal and Paying Agent. In
no event will the Fiscal and Paying Agent be liable for the costs and expenses
of printing, preparing or delivering any Certificated Subordinated Notes.

(ii) Exchange of Certificated Subordinated Note. At the option of the registered
holder on request confirmed in writing and subject to applicable laws and
regulations and to the terms set forth in the Certificated Subordinated Note,
Certificated Subordinated Notes may be exchanged for Certificated Subordinated
Notes of any authorized denominations and of equal aggregate principal amount,
upon surrender of the Certificated Subordinated Notes to be exchanged at the
office of the Fiscal and Paying Agent. Whenever any Certificated Subordinated
Note is so surrendered for exchange, together with a written request for
exchange, the Issuer shall execute, and the Fiscal and Paying Agent shall
promptly authenticate and deliver, Certificated Subordinated Notes which the
holder making the request for exchange is entitled to receive.

(d) Transfer and Exchange of the Global Subordinated Notes. The transfer and
exchange of a Global Subordinated Note or beneficial interests therein shall be
effected through DTC, or other depository for the Global Subordinated Notes, in
accordance with this Agreement and the procedures of DTC or such other
depository for the Global Subordinated

 

7

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

Notes. Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in Section 2.5(b) hereof), a Global Subordinated Note may
not be transferred as a whole except by DTC to a nominee of DTC or by a nominee
of DTC to DTC or another nominee of DTC.

(e) No Liability for Costs. In no event shall the Fiscal and Paying Agent be
liable for any costs (including legal fees) arising out of the transactions
contemplated hereby, all such costs shall be borne by the Issuer or holder(s) of
the Subordinated Notes seeking to effect such transactions.

Section 2.7. Registration; Registration of Transfer and Exchange.

(a) The Fiscal and Paying Agent shall, so long as any of the Subordinated Notes
remain outstanding, maintain all records as may be customary, including all
forms of transfer for the Subordinated Notes and shall:

(i) Keep at its corporate trust office a register (the “Security Register”) in
such form as the Fiscal and Paying Agent may determine, in which, subject to
such reasonable regulations as it may prescribe, it shall provide for the
registration of the Subordinated Notes and registration of transfer thereof; and

(ii) Maintain records showing for each outstanding Subordinated Note the
principal amount, maturity date, interest rate and other terms thereof, and all
subsequent transfers and consolidations or exchanges; provided that the Fiscal
and Paying Agent shall have no responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Subordinated Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests, and it
shall be fully protected in acting or refraining from acting on any such
information provided by DTC (or other depository for the Global Subordinated
Notes) and the Fiscal and Paying Agent may regard such depository as the sole
registered holder of such Global Subordinated Note.

(b) All Subordinated Notes presented for registration of transfer shall be duly
endorsed or be accompanied by a written instrument of transfer and such other
documentation as may be required pursuant to Section 2.6. The Global
Certificated Notes transferred pursuant to Section 2.6(d) must be registered in
such names as DTC will direct in writing.

(c) Each Subordinated Note shall bear the original issue date of July 13, 2005,
which shall remain the same for all Subordinated Notes subsequently issued upon
registration of transfer, exchange or substitution of such original Subordinated
Note regardless of the date of issuance of any such subsequently issued
Subordinated Note.

Section 2.8. Persons Deemed Owners. Prior to due presentment of a Subordinated
Note for registration of transfer, the Issuer, the Fiscal and Paying Agent and
any agent of the Issuer or the Fiscal and Paying Agent may treat the person in
whose name such Subordinated Note is registered as the owner of the Subordinated
Note for the purpose of receiving payments of principal and interest, if any,
and for all other purposes whatsoever,

 

8

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

whether or not such Subordinated Note be overdue, and neither the Issuer nor the
Fiscal and Paying Agent shall be affected by notice to the contrary.

Section 2.9. Mutilated, Lost, Stolen or Destroyed Global Subordinated Notes. If
(a) any mutilated Subordinated Note shall be surrendered to the Fiscal and
Paying Agent, or if the Fiscal and Paying Agent shall receive evidence to its
satisfaction of the destruction, loss or theft of any Subordinated Note and
(b) there shall be delivered to the Fiscal and Paying Agent and the Issuer such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of the Issuer having notice that such Subordinated Note has
been acquired by a protected purchaser, the Issuer shall execute and the Fiscal
and Paying Agent shall thereupon authenticate and deliver, in exchange for, or
in lieu of, any such mutilated, destroyed, lost or stolen Subordinated Note, a
new Subordinated Note, of like tenor and denomination. In connection with the
issuance of any new Subordinated Note under this Section 2.9, the Issuer or the
Fiscal and Paying Agent may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Subordinated Note issued pursuant to this Section 2.9 shall
constitute conclusive evidence of ownership of such Subordinated Note, as if
originally issued, whether or not the lost, stolen or destroyed Subordinated
Note shall be found at any time.

Section 2.10. Subordinated Notes Acquired by the Issuer. If the Issuer shall
acquire any of the Subordinated Notes, such acquisition shall not operate as a
satisfaction of the indebtedness or rights represented by such Subordinated
Notes unless and until the same are delivered or surrendered to the Fiscal and
Paying Agent by the Issuer with written instructions signed by an Authorized
Representative directing their cancellation.

Section 2.11. Redemption. Subject to Section 2.12, except upon an Event of
Default (as defined in the Subordinated Notes) resulting in an acceleration of
maturity, the Subordinated Notes may not be redeemed prior to maturity and no
sinking fund will be provided for the Subordinated Notes.

Section 2.12. Repayment Prior to Maturity. The Issuer shall not cause the
Subordinated Notes to be repaid prior to maturity, whether pursuant to an
acceleration upon an Event of Default (as defined in the Subordinated Notes) or
otherwise, without the prior written approval of the Office of the Comptroller
of the Currency (the “OCC”) if then required. Promptly following the receipt of
any notice of acceleration, the Issuer will apply to the OCC, if then required,
for prior written approval of repayment prior to maturity. In the event that the
Issuer obtains such prior written approval, the Issuer shall notify the holders
of Subordinated Notes and the Fiscal and Paying Agent of the consent of the OCC
(or otherwise provide written confirmation of its determination that no such OCC
approval is required) and arrange for prompt repayment.

ARTICLE III

THE FISCAL AND PAYING AGENT

Section 3.1. Payment of Subordinated Notes. Payment of the principal and
interest payable on the date of maturity of any Subordinated Note will be made
(i) in the case of the Global Subordinated Notes, through the facilities of DTC,
or (ii) in the case of the

 

9

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

Certificated Subordinated Notes, by check mailed to the registered holder at the
address of such holder as it appears on the Security Register or, at the option
of the Issuer, by wire transfer in immediately available funds to a bank account
in the United States designated by the holder, in each case upon presentation
and surrender of such Subordinated Note at the office of the Fiscal and Paying
Agent in Wilmington, Delaware, or at such other place or places as the Fiscal
and Paying Agent shall designate by notice to the holder, provided that such
Subordinated Note is presented to the Fiscal and Paying Agent in time for the
Fiscal and Paying Agent to make such payments in such funds in accordance with
its normal procedures. Payments of interest will be made through the facilities
of DTC, in the case of the Global Subordinated Notes, or, with respect to the
Certificated Subordinated Notes, by check mailed to the holder at the address of
such holder as it appears on the Security Register. The Fiscal and Paying Agent
shall have no obligation to use its own funds for any such payment or for any
other purpose pursuant to this Agreement.

Section 3.2. Information Regarding Amounts Payable. The Fiscal and Paying Agent
shall, as soon as practicable after each record date for the payment of interest
(other than interest payable at maturity) on the Subordinated Notes but not
later than five days preceding the related interest payment date, notify the
Issuer of the interest to be paid on the Subordinated Notes on the related
interest payment date. In addition, by the 15th day of the month immediately
preceding the month in which the Subordinated Notes will mature, the Fiscal and
Paying Agent shall furnish to the Issuer a list showing for each Subordinated
Note issued by the Issuer the principal and interest payable at maturity on each
such Subordinated Note.

Section 3.3. Deposit of Funds. The Issuer shall deposit by 11 a.m., New York
City time, with the Fiscal and Paying Agent (a) on each interest payment date of
the Subordinated Notes an amount in immediately available funds sufficient to
pay the interest due on such date and (b) on the maturity date of each such
Subordinated Note an amount in immediately available funds sufficient to pay the
principal of such Subordinated Note and the interest accrued thereon to such
maturity date.

Section 3.4. Money for Subordinated Note Payments to be Held in Trust.

(a) In acting under this Agreement and in connection with the Subordinated
Notes, the Fiscal and Paying Agent is and will be acting not in its individual
capacity, but solely as agent of the Issuer and does not assume any relationship
of agency or trust for or with any of the holders of the Subordinated Notes,
except that, subject to the provisions of subsection (b) of this Section 3.4,
all money deposited with the Fiscal and Paying Agent pursuant to Section 3.3
shall be held by it in trust for the benefit of the registered holders of the
Subordinated Notes entitled thereto until such money is paid to such holders of
the Subordinated Notes in accordance with the provisions of the Subordinated
Notes and this Agreement or otherwise disposed of as provided herein, but such
money need not be held in an interest bearing account or segregated from other
funds of the Fiscal and Paying Agent except to the extent required by applicable
law.

(b) Any money deposited with the Fiscal and Paying Agent for the payment of the
principal of or interest on any Subordinated Note that remains unclaimed for two
years after such principal or interest has become due and payable shall be paid
to the Issuer, upon its written request signed by an Authorized Representative,
and holders of the Subordinated Notes shall

 

10

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

thereafter, as unsecured general creditors, look only to the Issuer for payment
thereof, and to the extent permitted by applicable law, all liability of the
Fiscal and Paying Agent with respect to such money shall thereupon cease. The
Issuer hereby assumes full responsibility for compliance with all applicable
escheat and other laws governing unclaimed property and shall defend, hold
harmless and indemnify the Fiscal and Paying Agent from and against any and all
claims and liabilities arising out of or related to any money having been paid
to the Issuer under this Section 3.4.

Section 3.5. Additional Responsibilities. Unless the Fiscal and Paying Agent has
entered into a separate written agreement that specifically addresses the
standard of care with respect to the duties discussed by this Section 3.5, if
the Issuer shall ask the Fiscal and Paying Agent to perform any duties not
specifically set forth in this Agreement as duties of the Fiscal and Paying
Agent (the “Additional Responsibilities”) and the Fiscal and Paying Agent
chooses to perform such Additional Responsibilities, the Fiscal and Paying Agent
shall be held to the same standard of care and shall be entitled to all the
protective provisions (including, but not limited to, indemnification) set forth
herein.

ARTICLE IV

CONDITIONS OF FISCAL AND PAYING AGENT’S OBLIGATIONS

Section 4.1. Liability. The Fiscal and Paying Agent’s duties are ministerial in
nature and the Fiscal and Paying Agent shall not have any liability hereunder to
the Issuer or any other person or entity, including any holder of the
Subordinated Notes, except in the case of its negligence or willful misconduct.
The duties and obligations of the Fiscal and Paying Agent shall be determined by
the express provisions of this Agreement and it shall not be liable except for
the performance of such duties and obligations as are specifically set forth
herein and no implied covenants shall be read into this Agreement against it.
Except for its obligations specifically set forth in Section 6.6 hereof, the
Fiscal and Paying Agent shall have no responsibility in the case of any default
by the Issuer in the enforcement or performance of the covenants contained in
the Subordinated Notes. The Fiscal and Paying Agent shall not be required to
ascertain whether any issuance or sale of Subordinated Notes (or any amendment
or termination of this Agreement) has been duly authorized or is in compliance
with any other agreement to which the Issuer is a party (whether or not the
Fiscal and Paying Agent is also a party to such other agreements).

Section 4.2. Indemnification. The Issuer shall defend, indemnify and hold
harmless the Fiscal and Paying Agent, its officers, directors, employees and
agents (each, an “Indemnitee”) from and against all losses, liabilities,
obligations, claims, damages, costs and expenses of any kind or nature
whatsoever (including, without limitation, reasonable legal fees and expenses)
relating to or arising out of the performance of the Fiscal and Paying Agent’s
duties under this Agreement, except to the extent they are caused by the
negligence or willful misconduct of the Fiscal and Paying Agent, provided,
however, that no action taken or refrained to be taken in good faith reliance
upon the Issuer’s instructions shall be deemed negligence or willful misconduct.
The Issuer shall, upon request, advance to each Indemnitee the costs of defense
(by counsel of such Indemnitee’s choice) of such Indemnitee in any action or
proceeding arising out of or in connection with this Agreement or the Fiscal and
Paying Agent’s duties and responsibilities under this Agreement and pay on
behalf of such Indemnitee, upon its demand,

 

11

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

the amount of any judgment, fine or penalty that may be entered against or
imposed on such Indemnitee in any action or proceeding or any settlement entered
into with the consent of the Issuer (such consent to not be withheld, delayed or
conditioned unreasonably) arising out of or in connection with this Agreement or
the Fiscal and Paying Agent’s duties and responsibilities under this Agreement.
The provisions of this Section 4.2 and any other defense, hold harmless and
indemnification obligations under this Agreement shall survive the termination
of this Agreement, including any termination pursuant to any applicable federal
or state bankruptcy law, to the extent enforceable under applicable law, and
shall survive the resignation or removal of the Fiscal and Paying Agent while
remaining applicable to any action taken or omitted by the Fiscal and Paying
Agent while acting pursuant to this Agreement.

Section 4.3. Officer’s Certificate. Any instruction given by the Issuer to the
Fiscal and Paying Agent under this Agreement shall be in the form of an
Officer’s Certificate. For the purposes of this Agreement, “Officer’s
Certificate” means a certificate signed by an Authorized Representative and
delivered to the Fiscal and Paying Agent setting forth the specific instruction
and confirming that the instructed action is in compliance with this Agreement
and all applicable laws, and that all conditions precedent to such action have
been satisfied hereunder.

Section 4.4. Opinion of Counsel and Officer’s Certificate. The Fiscal and Paying
Agent may at any time request and shall be protected in acting upon the advice
or opinion of counsel (which shall not include in-house counsel) acceptable to
it or an Officer’s Certificate concerning its duties hereunder, and shall be
free to act in good faith upon such advice, opinion or certificate, and shall be
relieved of any liability under this Agreement in so acting.

Section 4.5. Other Rights of the Fiscal and Paying Agent. Notwithstanding
anything to the contrary herein,

(a) The Fiscal and Paying Agent shall only make payments hereunder to the extent
it has actually received funds from the Issuer for such purpose; in paying
Subordinated Notes hereunder, the Fiscal and Paying Agent shall be acting as a
conduit and shall not be paying Subordinated Notes for its own account or with
its own funds, and in the absence of written notice from the Issuer to the
contrary, the Fiscal and Paying Agent shall be entitled to assume that any
Subordinated Note presented to it, or deemed presented to it, for payment, is
entitled to be so paid;

(b) the Fiscal and Paying Agent may become a purchaser, holder, transferor or
may otherwise own, hold or transfer any beneficial interest in any Subordinated
Notes and may commence or join in any action which a beneficial owner of a
Subordinated Note is entitled to take without any conflict with its
responsibilities pursuant to this Agreement;

(c) the Fiscal and Paying Agent shall not be required to invest or pay interest
on any funds delivered to it pursuant to this Agreement;

(d) the Fiscal and Paying Agent shall not be responsible for the sufficiency of
this Agreement or the correctness of any recital of any party other than of the
Fiscal and Paying Agent that is stated herein or in the Subordinated Notes or in
any offering materials and makes

 

12

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

no representations as to the validity of the Subordinated Notes and shall incur
no responsibility in respect thereto;

(e) the Fiscal and Paying Agent shall be protected in acting or refraining from
acting upon any notice, order, requisition, request, consent, certificate,
order, opinion (including an opinion of counsel, Officer’s Certificate or both),
affidavit, letter, telegram or other paper or document in good faith deemed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons;

(f) any action taken by the Fiscal and Paying Agent pursuant to this Agreement
upon the request or authority or consent of any person who at the time of making
such request or giving such authority or consent is the holder of any
Subordinated Note shall be conclusive and binding upon all future holders of the
same Subordinated Note and all Subordinated Notes issued in exchange therefore
or in place thereof;

(g) in the event that the Fiscal and Paying Agent is unsure of the course of
action to be taken by it hereunder, the Fiscal and Paying Agent may request
instructions from the Issuer and to the extent the Fiscal and Paying Agent
follows such instructions in good faith it shall not be liable to any Person. In
the event that no instructions are provided within the time requested by the
Fiscal and Paying Agent, it shall have no duty or liability for its failure to
take any action or for any action it takes in good faith; and

(h) The Fiscal and Paying Agent may accept a certified copy of a resolution of
the board of directors or other governing body of any corporate party as
conclusive evidence that such resolution has been duly adopted by such body and
that the same is in full force and effect. As to any fact or matter the manner
of ascertainment of which is not specifically prescribed herein, the Fiscal and
Paying Agent may for all purposes hereof rely on a certificate, signed by the
Issuer, as to such fact or matter, and such certificate shall constitute full
protection to the Fiscal and Paying Agent for any action taken or omitted to be
taken by it in good faith in reliance thereon.

Section 4.6. Compensation of the Fiscal and Paying Agent. The Issuer agrees to
pay the Fiscal and Paying Agent compensation for all services rendered by the
Fiscal and Paying Agent hereunder in such amounts and payable at such times as
the Issuer and the Fiscal and Paying Agent may agree to and to promptly
reimburse the Fiscal and Paying Agent for all reasonable fees and expenses
(including reasonable counsel fees and expenses), disbursements and advances
incurred or made by the Fiscal and Paying Agent in the performance of its duties
hereunder. The obligation of the Issuer pursuant to this Section 4.6 shall
survive the termination of this Agreement, including any termination pursuant to
any federal or state bankruptcy law, to the extent enforceable under applicable
law, and the resignation or removal of the Fiscal and Paying Agent.

ARTICLE V

RESIGNATION OR REMOVAL OF FISCAL AND PAYING AGENT

Section 5.1. Resignation or Removal. The Fiscal and Paying Agent may at any time
resign from its duties hereunder by giving written notice of resignation to the
Issuer

 

13

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

specifying the date on which such resignation shall become effective; provided,
however, that such date shall not be less than 30 Business Days after such
notice is given to the Issuer. The Issuer may at any time remove the Fiscal and
Paying Agent by giving written notice of removal to the Fiscal and Paying Agent
specifying the date on which such removal shall be effective; provided, however,
that, except in the case of removal due to the Fiscal and Paying Agent’s breach
of its obligations hereunder, such effective date of removal shall be not less
than 30 Business Days after such notice is given to the Fiscal and Paying Agent.
Any removal or resignation hereunder shall not affect the Fiscal and Paying
Agent’s right to the payment of fees earned or charges incurred through the
effective date of such removal or resignation, as the case may be. In the event
of the Fiscal and Paying Agent’s removal or resignation, the Issuer shall
appoint a successor Fiscal and Paying Agent in respect of the Subordinated Notes
within 30 Business Days prior to the effective date of the removal or
resignation of the Fiscal and Paying Agent; provided, however, that if the
Fiscal and Paying Agent is removed by the Issuer as a result of the Fiscal and
Paying Agent’s breach of its obligations hereunder, the Issuer shall appoint a
successor Fiscal and Paying Agent in respect of the Subordinated Notes within 30
Business Days after the effective date of such removal. The Issuer shall notify,
or cause the successor Fiscal and Paying Agent to notify, the holders of the
Subordinated Notes of the appointment of the successor Fiscal and Paying Agent.

Section 5.2. Successor Fiscal and Paying Agent. Upon the effective date of such
resignation or removal, the Fiscal and Paying Agent shall deliver any funds then
held by it pursuant to Section 3.4(a) to the successor appointed by the Issuer
to serve as fiscal and paying agent for the Subordinated Notes and all liability
of the Fiscal and Paying Agent with respect to such funds shall thereupon cease.
The Fiscal and Paying Agent shall also provide such successor with such copies
of its records relating to the Subordinated Notes as such successor shall
reasonably request. However, the Fiscal and Paying Agent may retain for archival
purposes copies of any records turned over. If such successor has not been
appointed by the Issuer by the effective date of such resignation or removal,
the Fiscal and Paying Agent shall petition any court of competent jurisdiction,
at the Issuer’s expense (including the reasonable compensation, expenses,
disbursements and advances of the Fiscal and Paying Agent, its agents and
counsel), for the appointment of a successor Fiscal and Paying Agent and shall
pay such funds and deliver such records to the person or persons appointed by
such court of competent jurisdiction to act as fiscal and paying agent with
respect to the Subordinated Notes. The delivery, transfer and assignment of such
funds and records by the Fiscal and Paying Agent to its successor shall be
sufficient, without the requirement of any additional act or the requirement of
any indemnity to be given by the Fiscal and Paying Agent, to relieve the Fiscal
and Paying Agent of all further responsibility for the exercise of the rights or
the performance of the obligations vested in the Fiscal and Paying Agent
pursuant to this Agreement.

Section 5.3. Successor by Merger, etc. Any corporation or association into which
the Fiscal and Paying Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its corporate trust and agency
business as a whole, or any corporation or association resulting from any such
conversion, sale, merger, consolidation or transfer to which it is a party,
shall be and become successor Fiscal and Paying Agent hereunder and shall be
vested with all of the rights, powers, trusts, duties and obligations of the
Fiscal and Paying Agent hereunder, without the execution or filing of any
instrument or any further act. The Fiscal and Paying Agent shall provide notice
to the Issuer of any such

 

14

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

conversion, merger, consolidation, sale or transfer as soon as practicable after
the Fiscal and Paying Agent obtains knowledge that such event will occur or has
occurred.

ARTICLE VI

MISCELLANEOUS

Section 6.1. Notices. Notices and other communications hereunder shall (except
to the extent otherwise expressly provided) be in writing or given via
electronic media and shall be addressed as follows, or to such other addresses
as the parties hereto shall specify from time to time.

 

If to the Issuer:    Valley National Bank    1455 Valley Road    Wayne, New
Jersey 07470    Attention: Chief Financial Officer    Telephone: (973) 305-8800
   Facsimile: (973) 305-8415 If to the Fiscal    Wilmington Trust Company and
Paying Agent:    Rodney Square North    1100 North Market Street    Wilmington,
Delaware 19890    Attention: Corporate Capital Markets    Telephone: (302)
651-1000    Facsimile: (302) 651-4140

All notices shall be deemed given when received.

Section 6.2. Parties. Except for rights arising under Sections 3.4(a), 4.2 and
6.6, this Agreement is solely for the benefit of the parties hereto and their
successors and assigns and nothing herein, express or implied, shall give to any
other person including, without limitation, any beneficial owner of Subordinated
Notes, any benefits or any legal or equitable right, remedy or claim under this
Agreement.

Section 6.3. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

THE ISSUER, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, HEREBY IRREVOCABLY SUBMITS
TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED
IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING
RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY
WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION

 

15

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

AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE ISSUER ON BEHALF
OF ITSELF AND ITS SUBSIDIARIES, IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

Section 6.4. Severability. In case any provision in this Agreement 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.

Section 6.5. Effect of Headings. The article and section headings herein are for
convenience of reference only and shall not affect the construction hereof.

Section 6.6. Amendments; Waivers; Notices of Acceleration After Events of
Default; Compliance Certificate.

(a) The Issuer, when authorized by the resolutions of its Board of Directors,
and the Fiscal and Paying Agent from time to time and at any time may enter into
an agreement supplemental to this Agreement for one or more of the following
purposes:

(i) to evidence the succession of another entity to the Issuer, or successive
successions, and the assumptions by the successor entity of the covenants,
agreements and obligations of the Issuer;

(ii) to add to the covenants of the Issuer such further covenants, restrictions
or conditions for the protection of the holders of the Subordinated Notes as the
Issuer’s Board of Directors shall consider to be for the protection of such
holders;

(iii) to cure any ambiguity or to correct or supplement any provision contained
in this Agreement or in any supplemental agreement that may be defective or
inconsistent with any other provision contained in this Agreement or in any
supplemental agreement, or to make such other provisions in regard to matters or
questions arising under this Agreement that shall not adversely affect the
interests of the holders of the Subordinated Notes; and

(iv) to evidence and provide for the acceptance of appointment hereunder by a
successor Fiscal and Paying Agent with respect to the Subordinated Notes and to
add to or change any of the provisions of this Agreement; provided, however,
that such action shall not adversely affect the interests of the holders of the
Subordinated Notes.

Subject to its rights, privileges and protections hereunder, the Fiscal and
Paying Agent hereby is authorized to join with the Issuer in the execution of
any such supplemental agreement, to make any further appropriate agreements and
stipulations that may be contained in

 

16

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

such supplemental agreement and to accept the conveyance, transfer and
assignment of any property under such supplemental agreement, but the Fiscal and
Paying Agent shall not be obligated to, but may in its discretion, enter into
any such supplemental agreement that affects its own rights, duties or
immunities under this Agreement or otherwise.

Any supplemental agreement authorized by the provisions of this Section 6.6(a)
may be executed by the Issuer and the Fiscal and Paying Agent without the
consent of the holders of any of the Subordinated Notes at the time outstanding
notwithstanding the provisions of Section 6.6(b). Any such supplemental
agreement shall be accompanied by an opinion of Issuer’s counsel and an
Officer’s Certificate to the Fiscal and Paying Agent that such supplemental
agreement is authorized by the terms of this Agreement and that all conditions
precedent have been satisfied.

(b) With the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the Subordinated Notes at the time outstanding, the Issuer,
when authorized by the resolutions of its Board of Directors, and the Fiscal and
Paying Agent from time to time and at any time may enter into an agreement or
agreements supplemental to this Agreement for the purpose of adding any
provisions to or changing in any manner any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders; provided, however,
that, without the consent of the Holder of each Subordinated Note affected
thereby, no such supplemental agreement shall: (i) change the maturity of the
principal of or any installment of interest on any Subordinated Note, or reduce
the principal amount of any Subordinated Note or interest on any Subordinated
Note, or reduce the amount of principal payable upon acceleration of the
maturity of any Subordinated Note, or change any place of payment where, or the
coin or currency in which, any Subordinated Note or interest on any Subordinated
Note is payable, or impair the right to institute suit for the enforcement of
any such payment on or after its maturity, or make any change in the
subordination provisions of the Subordinated Notes that adversely affects the
rights of any holder of the Subordinated Notes; (ii) reduce the percentage in
principal amount of Subordinated Notes the consent of whose holders is required
for any such supplemental agreement or the consent of whose holders is required
for any waiver of compliance with certain provisions of this Agreement or
certain defaults under this Agreement and their consequences provided for in
this Agreement; or (iii) modify the provisions of Section 6.6(f) providing for
the rescinding and annulment of a declaration accelerating the maturity of the
Subordinated Notes, or any of the provisions of this Section 6.6(b) or 6.6(e),
except to increase any such percentage or to provide that certain other
provisions of this Agreement cannot be modified or waived.

Upon request of the Issuer, accompanied by the opinion of Issuer’s counsel and
Officer’s Certificate referred to hereinbelow, and a copy of the resolutions of
its Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any such supplemental agreement, and upon the
filing with the Fiscal and Paying Agent of evidence of the consent of the
holders of the Subordinated Notes as aforesaid, the Fiscal and Paying Agent
shall join with the Issuer in the execution of such supplemental agreement
unless such supplemental agreement affects the Fiscal and Paying Agent’s own
rights, privileges, protections, duties or immunities under this Agreement or
otherwise, in which case the Fiscal and Paying Agent may in its discretion, but
shall not be obliged to, enter into such supplemental agreement.

 

17

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

It shall not be necessary for the consent of the holders of the Subordinated
Notes under this Section 6.6(b) to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such consent shall approve
the substance thereof.

Any supplemental agreement entered into pursuant to this Section 6.6(b) shall be
accompanied by an opinion of Issuer’s counsel and an Officer’s Certificate to
the Fiscal and Paying Agent that such supplemental agreement is authorized by
the terms of this Agreement and that all conditions precedent have been
satisfied.

(c) Notwithstanding any provision in this Section 6.6 to the contrary, the
Issuer and the Fiscal and Paying Agent shall not enter into any agreement or
agreements supplemental hereto for the purpose of changing the date of maturity
or the terms of subordination of any Subordinated Note unless the OCC consents
to such agreement or agreements. The Issuer shall give a copy of any such
consent to the Fiscal and Paying Agent promptly upon receipt thereof.

(d) Upon the execution of any supplemental agreement under this Section 6.6,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and each holder
of Subordinated Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby. The Issuer shall transmit by mail to each
holder of Subordinated Notes affected thereby a notice setting forth the general
terms of any supplemental agreement executed under this Section 6.6.

(e) The Issuer will promptly notify the Fiscal and Paying Agent of the
occurrence of any Event of Default (as defined in the Subordinated Notes). The
Fiscal and Paying Agent, promptly after the receipt of such written notice from
the Issuer, or written notice from any other source, shall mail to all holders
of the Subordinated Notes, at their address shown on the Security Register,
notice of such Event of Default, unless such Event of Default shall have been
cured or waived before the giving of such notice. Prior to any declaration
accelerating the date on which the principal of the Subordinated Notes is due
and payable, the holders of not less than 66 2/3% in aggregate principal amount
of the Subordinated Notes at the time outstanding on behalf of all holders of
the Subordinated Notes may waive any past Event of Default, and its
consequences. Upon any such waiver, the Issuer, the Fiscal and Paying Agent and
the holders shall be restored to their former positions and rights under this
Agreement and the Subordinated Notes; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereon.
Whenever any Event of Default shall have been waived as permitted by this
Section 6.6(e), such Event of Default, for all purposes of the Subordinated
Notes and this Agreement, shall be deemed to have been cured and to be not
continuing.

 

18

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

(f) At any time after such a declaration of acceleration, and before any
judgment or decree for the payment of the money due shall have been obtained or
entered, the holders of not less than 66 2/3% in aggregate principal amount of
the Subordinated Notes then outstanding, by written notice to the Issuer and to
the Fiscal and Paying Agent, may waive all past Events of Default and rescind
and annul such declaration and its consequences, if:

(i) the Issuer shall have paid to the Fiscal and Paying Agent a sum sufficient
to pay:

(A) all matured installments of interest on all the Subordinated Notes and the
principal of any and all Subordinated Notes that shall have become due otherwise
than by acceleration (with interest on overdue installments of interest (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal at the rate borne by the Subordinated Notes, to the date of such
payment or deposit); and

(B) all sums paid or advanced by the Fiscal and Paying Agent hereunder and the
reasonable compensation, expenses, disbursements and advances of the Fiscal and
Paying Agent, its agents and counsel; and

(ii) any and all Events of Default with respect to the Subordinated Notes shall
have been cured or waived.

No such waiver or rescission and annulment shall extend or shall affect any
subsequent Event of Default or shall impair any right consequent thereon.

Section 6.7. Further Issues. The Issuer may, without the consent of the holders
of the Subordinated Notes, create and issue additional notes having the same
terms and conditions as the Subordinated Notes (except for the issue date and
issue price) pursuant to an agreement supplemental to this Agreement so that
such further notes shall be consolidated and form a single series with the
Subordinated Notes. Any such issuance shall be made pursuant to another offering
document and will either be registered or issued pursuant to an exemption from
registration under the Securities Act or similar laws or regulations issued by
the applicable banking agency.

Section 6.8. Actions Due on Saturdays, Sundays and Holidays. If any date on
which a payment, notice or other action required by this Agreement falls on a
day other than a Business Day, then that action or payment need not be taken or
made on such date, but may be taken or made on the next succeeding Business Day
with the same force and effect as if made on such date.

Section 6.9. Agreement to Pay Attorneys’ Fees and Other Expenses. In the event
the Fiscal and Paying Agent shall employ attorneys or incur other expenses for
the enforcement or performance or observance of any obligation or agreement
under this Agreement, the Issuer agrees that it will, on demand therefor, pay to
the Fiscal and Paying Agent the reasonable fees and expenses of such attorneys
and such other reasonable expenses incurred by the Fiscal and Paying Agent.
Notwithstanding anything herein to the contrary, the Fiscal and Paying Agent
will not have any affirmative duty to seek any enforcement or remedies on behalf
of the holders of the Subordinated Notes upon any occurrence of an Event of
Default and has no trust or agency relationship with any of the holders of the
Subordinated Notes.

Section 6.10. Survival. The Fiscal and Paying Agent’s rights to compensation,
reimbursement and indemnification shall survive the termination of this
Agreement, including any termination pursuant to any federal or state bankruptcy
law, to the extent enforceable under applicable law.

 

19

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

Section 6.11. No Implied Waivers. The right of any party under any provision of
this Agreement shall not be affected by its prior failure to require the
performance by any other party under such provision or any other provision of
this Agreement, nor shall the waiver by any party of a breach of any provision
hereof constitute a waiver of any succeeding breach of the same or any other
provision or constitute a waiver of the provision itself or any other provision.

Section 6.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but both or all of
which, when taken together, shall constitute but one instrument.

Section 6.13. Term. This Agreement shall remain in full force and effect until
such time as the principal of and interest on all the Subordinated Notes shall
have been paid.

[SIGNATURE PAGE FOLLOWS]

 

20

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

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date
first set forth above.

 

Valley National Bank,

as Issuer

By:

      

Name:

 

Title:

Wilmington Trust Company,

as Fiscal and Paying Agent

By:

      

Name:

 

Title:

 

21