Exhibit 10.4

CODORUS VALLEY BANCORP, INC.
as Issuer

INDENTURE
Dated as of June 28, 2006

WELLS FARGO BANK, NATIONAL ASSOCIATION
As Trustee

JUNIOR SUBORDINATED DEBT SECURITIES

Due July 7, 2036

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TABLE OF CONTENTS

 

 

 

 

 

 

 

Page

 

 

 

 

ARTICLE I

DEFINITIONS

 

SECTION 1.01.

Definitions

 

1

 

 

 

 

ARTICLE II

DEBT SECURITIES

 

 

 

 

SECTION 2.01.

Authentication and Dating

 

8

 

 

 

 

SECTION 2.02.

Form of Trustee’s Certificate of Authentication

 

9

 

 

 

 

SECTION 2.03.

Form and Denomination of Debt Securities

 

9

 

 

 

 

SECTION 2.04.

Execution of Debt Securities

 

9

 

 

 

 

SECTION 2.05.

Exchange and Registration of Transfer of Debt Securities

 

10

 

 

 

 

SECTION 2.06.

Mutilated, Destroyed, Lost or Stolen Debt Securities

 

12

 

 

 

 

SECTION 2.07.

Temporary Debt Securities

 

13

 

 

 

 

SECTION 2.08.

Payment of Interest

 

14

 

 

 

 

SECTION 2.09.

Cancellation of Debt Securities Paid, etc

 

15

 

 

 

 

SECTION 2.10.

Computation of Interest

 

15

 

 

 

 

SECTION 2.11.

Extension of Interest Payment Period

 

17

 

 

 

 

SECTION 2.12.

CUSIP Numbers

 

18

 

 

 

 

SECTION 2.13.

Global Debentures

 

18

 

 

 

 

ARTICLE III

PARTICULAR COVENANTS OF THE COMPANY

 

 

 

 

SECTION 3.01.

Payment of Principal, Premium and Interest; Agreed Treatment of the Debt
Securities

 

20

 

 

 

 

SECTION 3.02.

Offices for Notices and Payments, etc

 

21

 

 

 

 

SECTION 3.03.

Appointments to Fill Vacancies in Trustee’s Office

 

21

 

 

 

 

SECTION 3.04.

Provision as to Paying Agent

 

21

 

 

 

 

SECTION 3.05.

Certificate to Trustee

 

22

 

 

 

 

SECTION 3.06.

Additional Interest

 

23

 

 

 

 

SECTION 3.07.

Compliance with Consolidation Provisions

 

23

 

 

 

 

SECTION 3.08.

Limitation on Dividends

 

23

 

 

 

 

SECTION 3.09.

Covenants as to the Trust

 

24

 

 

 

 

ARTICLE IV

LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

 

 

 

 

SECTION 4.01.

Securityholders’ Lists

 

24

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TABLE OF CONTENTS
(CONTINUED)

 

 

 

 

 

 

 

Page

 

 

 

 

SECTION 4.02.

Preservation and Disclosure of Lists

 

25

 

 

 

 

ARTICLE V

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
DEFAULT

 

 

 

 

SECTION 5.01.

Events of Default

 

26

 

 

 

 

SECTION 5.02.

Payment of Debt Securities on Default; Suit Therefor

 

28

 

 

 

 

SECTION 5.03.

Application of Moneys Collected by Trustee

 

30

 

 

 

 

SECTION 5.04.

Proceedings by Securityholders

 

30

 

 

 

 

SECTION 5.05.

Proceedings by Trustee

 

30

 

 

 

 

SECTION 5.06.

Remedies Cumulative and Continuing

 

31

 

 

 

 

SECTION 5.07.

Direction of Proceedings and Waiver of Defaults by Majority of Securityholders

 

31

 

 

 

 

SECTION 5.08.

Notice of Defaults

 

32

 

 

 

 

SECTION 5.09.

Undertaking to Pay Costs

 

32

 

 

 

 

ARTICLE VI

CONCERNING THE TRUSTEE

 

 

 

 

SECTION 6.01.

Duties and Responsibilities of Trustee

 

33

 

 

 

 

SECTION 6.02.

Reliance on Documents, Opinions, etc

 

34

 

 

 

 

SECTION 6.03.

No Responsibility for Recitals, etc

 

35

 

 

 

 

SECTION 6.04.

Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May
Own Debt Securities

 

35

 

 

 

 

SECTION 6.05.

Moneys to be Held in Trust

 

35

 

 

 

 

SECTION 6.06.

Compensation and Expenses of Trustee

 

36

 

 

 

 

SECTION 6.07.

Officers’ Certificate as Evidence

 

36

 

 

 

 

SECTION 6.08.

Eligibility of Trustee

 

37

 

 

 

 

SECTION 6.09.

Resignation or Removal of Trustee, Calculation Agent, Paying Agent or Debt
Security Registrar

 

37

 

 

 

 

SECTION 6.10.

Acceptance by Successor

 

38

 

 

 

 

SECTION 6.11.

Succession by Merger, etc

 

39

 

 

 

 

SECTION 6.12.

Authenticating Agents

 

40

 

 

 

 

ARTICLE VII

CONCERNING THE SECURITYHOLDERS

 

 

 

 

SECTION 7.01.

Action by Securityholders

 

41

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TABLE OF CONTENTS
(CONTINUED)

 

 

 

 

 

 

 

Page

 

 

 

 

SECTION 7.02.

Proof of Execution by Securityholders

 

42

 

 

 

 

SECTION 7.03.

Who Are Deemed Absolute Owners

 

42

 

 

 

 

SECTION 7.04.

Debt Securities Owned by Company Deemed Not Outstanding

 

42

 

 

 

 

SECTION 7.05.

Revocation of Consents; Future Securityholders Bound

 

43

 

 

 

 

ARTICLE VIII

SECURITYHOLDERS’ MEETINGS

 

 

 

 

SECTION 8.01.

Purposes of Meetings

 

43

 

 

 

 

SECTION 8.02.

Call of Meetings by Trustee

 

44

 

 

 

 

SECTION 8.03.

Call of Meetings by Company or Securityholders

 

44

 

 

 

 

SECTION 8.04.

Qualifications for Voting

 

44

 

 

 

 

SECTION 8.05.

Regulations

 

44

 

 

 

 

SECTION 8.06.

Voting

 

45

 

 

 

 

SECTION 8.07.

Quorum; Actions

 

45

 

 

 

 

SECTION 8.08.

Written Consent Without a Meeting

 

46

 

 

 

 

ARTICLE IX

SUPPLEMENTAL INDENTURES

 

 

 

 

SECTION 9.01.

Supplemental Indentures without Consent of Securityholders

 

46

 

 

 

 

SECTION 9.02.

Supplemental Indentures with Consent of Securityholders

 

48

 

 

 

 

SECTION 9.03.

Effect of Supplemental Indentures

 

49

 

 

 

 

SECTION 9.04.

Notation on Debt Securities

 

49

 

 

 

 

SECTION 9.05.

Evidence of Compliance of Supplemental Indenture to be furnished to Trustee

 

49

 

 

 

 

ARTICLE X

REDEMPTION OF SECURITIES

 

 

 

 

SECTION 10.01.

Optional Redemption

 

49

 

 

 

 

SECTION 10.02.

Special Event Redemption

 

50

 

 

 

 

SECTION 10.03.

Notice of Redemption; Selection of Debt Securities

 

50

 

 

 

 

SECTION 10.04.

Payment of Debt Securities Called for Redemption

 

51

 

 

 

 

ARTICLE XI

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

 

 

 

SECTION 11.01.

Company May Consolidate, etc., on Certain Terms

 

51

 

 

 

 

SECTION 11.02.

Successor Entity to be Substituted

 

52

 

 

 

 

SECTION 11.03.

Opinion of Counsel to be Given to Trustee

 

53

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TABLE OF CONTENTS
(CONTINUED)

 

 

 

 

 

 

 

Page

 

 

 

 

ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE

 

 

 

 

SECTION 12.01.

Discharge of Indenture

 

53

 

 

 

 

SECTION 12.02.

Deposited Moneys to be Held in Trust by Trustee

 

53

 

 

 

 

SECTION 12.03.

Paying Agent to Repay Moneys Held

 

54

 

 

 

 

SECTION 12.04.

Return of Unclaimed Moneys

 

54

 

 

 

 

ARTICLE XIII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

 

 

 

SECTION 13.01.

Indenture and Debt Securities Solely Corporate Obligations

 

54

 

 

 

 

ARTICLE XIV

MISCELLANEOUS PROVISIONS

 

 

 

 

SECTION 14.01.

Successors

 

55

 

 

 

 

SECTION 14.02.

Official Acts by Successor Entity

 

55

 

 

 

 

SECTION 14.03.

Surrender of Company Powers

 

55

 

 

 

 

SECTION 14.04.

Addresses for Notices, etc

 

55

 

 

 

 

SECTION 14.05.

Governing Law

 

56

 

 

 

 

SECTION 14.06.

Evidence of Compliance with Conditions Precedent

 

56

 

 

 

 

SECTION 14.07.

Non-Business Days

 

56

 

 

 

 

SECTION 14.08.

Table of Contents, Headings, etc

 

56

 

 

 

 

SECTION 14.09.

Execution in Counterparts

 

57

 

 

 

 

SECTION 14.10.

Severability

 

57

 

 

 

 

SECTION 14.11.

Assignment

 

57

 

 

 

 

SECTION 14.12.

Acknowledgment of Rights

 

57

 

 

 

 

ARTICLE XV

SUBORDINATION OF DEBT SECURITIES

 

 

 

 

SECTION 15.01.

Agreement to Subordinate

 

58

 

 

 

 

SECTION 15.02.

Default on Senior Indebtedness

 

58

 

 

 

 

SECTION 15.03.

Liquidation; Dissolution; Bankruptcy

 

58

 

 

 

 

SECTION 15.04.

Subrogation

 

60

 

 

 

 

SECTION 15.05.

Trustee to Effectuate Subordination

 

61

 

 

 

 

SECTION 15.06.

Notice by the Company

 

61

 

 

 

 

SECTION 15.07.

Rights of the Trustee, Holders of Senior Indebtedness

 

61

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TABLE OF CONTENTS
(CONTINUED)

 

 

 

 

 

 

 

Page

 

 

 

 

SECTION 15.08.

Subordination May Not Be Impaired

 

62

 

 

 

 

EXHIBITS

 

 

 

 

 

 

 

EXHIBIT A

FORM OF DEBT SECURITY

 

 

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                    THIS INDENTURE, dated as of June 28, 2006, between Codorus
Valley Bancorp, Inc., a bank holding company incorporated in Pennsylvania
(hereinafter sometimes called the “Company”), and Wells Fargo Bank, National
Association, a national banking association with its principal place of business
in the State of Delaware, as trustee (hereinafter sometimes called the
“Trustee”).

W I T N E S S E T H:

                    WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issuance of its Junior Subordinated Debt Securities due July
7, 2036 (the “Debt Securities”) under this Indenture and to provide, among other
things, for the execution and authentication, delivery and administration
thereof, the Company has duly authorized the execution of this Indenture.

                    NOW, THEREFORE, in consideration of the premises, and the
purchase of the Debt Securities by the holders thereof, the Company covenants
and agrees with the Trustee for the equal and proportionate benefit of the
respective holders from time to time of the Debt Securities as follows:

ARTICLE I

DEFINITIONS

          SECTION 1.01. Definitions.

                    The terms defined in this Section 1.01 (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 1.01. 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” shall have the meaning set forth in
Section 3.06.

                    “Additional Provisions” shall have the meaning set forth in
Section 15.01.

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

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

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

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

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

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

                    “Calculation Agent” means the Person identified as “Trustee”
in the first paragraph hereof with respect to the Debt Securities and the
Institutional Trustee with respect to the Trust Securities.

                    “Capital Securities” means undivided beneficial interests in
the assets of the Trust which are designated as “Capital Securities” and rank
pari passu with Common Securities issued by the Trust; provided, however, that
if an Event of Default has occurred and is continuing, the rights of holders of
such Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of holders
of such Capital Securities.

                    “Capital Securities Guarantee” means the guarantee agreement
that the Company will enter into with Wells Fargo Bank, National Association or
other Persons that operates directly or indirectly for the benefit of holders of
Capital Securities of the Trust.

                    “Capital Treatment Event” means the receipt by the Company
and the Trust of an Opinion of Counsel experienced in such matters to the effect
that, as a result of any amendment to, or change in, the laws, rules or
regulations of the United States or any political subdivision thereof or
therein, or as the result of any official or administrative pronouncement or
action or decision interpreting or applying such laws, rules or regulations,
which amendment or change is effective or which pronouncement, action or
decision is announced on or after the date of original issuance of the Debt
Securities, there is more than an insubstantial risk that, within 90 days of the
receipt of such opinion, the aggregate Liquidation Amount of the Capital
Securities will not be eligible to be treated by the Company as “Tier 1 Capital”
(or the then equivalent thereof) for purposes of the capital adequacy guidelines
of the Federal Reserve or OTS, as applicable (or any successor regulatory
authority with jurisdiction over bank, savings & loan or financial holding
companies), as then in effect and applicable to the Company; provided, however,
that the inability of the Company to treat all or any portion of the Liquidation
Amount of the Capital Securities as Tier 1 Capital shall not constitute the
basis for a Capital Treatment Event, if such inability results from the Company
having cumulative preferred stock, minority interests in consolidated
subsidiaries, or any other class of security or interest which the Federal
Reserve or OTS, as applicable, may now or hereafter accord Tier 1 Capital
treatment in excess of the amount which may now or hereafter qualify for
treatment as Tier 1 Capital under applicable

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capital adequacy guidelines; provided further, however, that the distribution of
the Debt Securities in connection with the liquidation of the Trust by the
Company shall not in and of itself constitute a Capital Treatment Event unless
such liquidation shall have occurred in connection with a Tax Event or an
Investment Company Event.

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

                    “Common Securities” means undivided beneficial interests in
the assets of the Trust which are designated as “Common Securities” and rank
pari passu with Capital Securities issued by the Trust; provided, however, that
if an Event of Default has occurred and is continuing, the rights of holders of
such Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of holders
of such Capital Securities.

                    “Company” means Codorus Valley Bancorp, Inc., a bank holding
company incorporated in Pennsylvania, and, subject to the provisions of Article
XI, shall include its successors and assigns.

                    “Debt Security” or “Debt Securities” has the meaning stated
in the first recital of this Indenture.

                    “Debt Security Register” has the meaning specified in
Section 2.05.

                    “Declaration” means the Amended and Restated Declaration of
Trust of the Trust dated as of June 28, 2006, as amended or supplemented from
time to time.

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

                    “Defaulted Interest” has the meaning set forth in Section
2.08.

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

                    “Depositary” means an organization registered as a clearing
agency under the Securities Exchange Act of 1934 that is designated as
Depositary by the Company or any successor thereto. DTC will be the initial
Depositary.

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

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

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

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                    “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.

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

                    “Federal Reserve” means the Board of Governors of the
Federal Reserve System.

                    “Global Debenture” means a security that evidences all or
part of the Debt Securities, the ownership and transfers of which shall be made
through book entries by a Depositary.

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

                    “Initial Purchaser” means the initial purchaser of the
Capital Securities.

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

                    “Interest Payment Date” means January 7, April 7, July 7 and
October 7 of each year, commencing on October 7, 2006, during the term of this
Indenture.

                    “Interest Payment Period” means the period from and
including an Interest Payment Date, or in the case of the first Interest Payment
Period, the original date of issuance of the Debt Securities, to, but excluding,
the next succeeding Interest Payment Date or, in the case of the last Interest
Payment Period, the Redemption Date, Special Redemption Date or Maturity Date,
as the case may be.

                    “Interest Rate” means, with respect to any Interest Payment
Period, a per annum rate of interest, reset quarterly, equal to LIBOR, as
determined on the LIBOR Determination Date immediately preceding each Interest
Payment Date, plus 1.54%; provided, however, that the Interest Rate for any
Interest Payment Period may not exceed the highest rate permitted by New York
law, as the same may be modified by United States law of general applicability.

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

                    “LIBOR” means the London Interbank Offered Rate for U.S.
Dollar deposits in Europe as determined by the Calculation Agent according to
Section 2.10(b).

                    “LIBOR Banking Day” has the meaning set forth in Section
2.10(b)(1).

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                    “LIBOR Business Day” has the meaning set forth in Section
2.10(b)(1).

                    “LIBOR Determination Date” has the meaning set forth in
Section 2.10(b).

                    “Liquidation Amount” means the liquidation amount of $1,000
per Trust Security.

                    “Maturity Date” means July 7, 2036.

                    “Notice” has the meaning set forth in Section 2.11.

                    “Officers’ Certificate” means a certificate signed by the
Chairman of the Board, the Vice Chairman, the President or any Vice President,
and by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Comptroller, an Assistant Comptroller, the Secretary or an Assistant Secretary
of the Company, and delivered to the Trustee. Each such certificate shall
include the statements provided for in Section 14.06 if and to the extent
required by the provisions of such Section.

                    “Opinion of Counsel” means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company, or may be
other counsel reasonably satisfactory to the Trustee. Each such opinion shall
include the statements provided for in Section 14.06 if and to the extent
required by the provisions of such Section.

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

                    “Outstanding” means, when used with reference to Debt
Securities, subject to the provisions of Section 7.04, as of any particular
time, all Debt Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except

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

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

                    (c)          Debt Securities paid pursuant to Section 2.06
or in lieu of or in substitution for which other Debt Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.06 unless proof
satisfactory to the Company and the Trustee is presented that any such Debt
Securities are held by bona fide holders in due course.

                    “Paying Agent” has the meaning set forth in Section 3.04(e).

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                    “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 Debt Security means
every previous Debt Security evidencing all or a portion of the same debt as
that evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 2.06 in
lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.

                    “Principal Office of the Trustee” means the office of the
Trustee, at which at any particular time its corporate trust business shall be
principally administered, which at all times shall be located within the United
States and at the time of the execution of this Indenture shall be 919 Market
Street, Suite 700, Wilmington, DE 19801.

                    “Redemption Date” has the meaning set forth in Section
10.01.

                    “Redemption Price” means 100% of the principal amount of the
Debt Securities being redeemed plus accrued and unpaid interest on such Debt
Securities to the Redemption Date or, in the case of a redemption due to the
occurrence of a Special Event to the Special Redemption Date if such Special
Redemption Date is on or after July 7, 2010.

                    “Responsible Officer” means, with respect to the Trustee,
any officer within the Principal Office of the Trustee with direct
responsibility for the administration of the Indenture, 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 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 Debt Securities” or other
similar terms, means any Person in whose name at the time a particular Debt
Security is registered on the Debt Security Register.

                    “Senior Indebtedness” means, with respect to the Company,
(i) the principal, premium, if any, and interest in respect of (A) indebtedness
of the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company;
(ii) all capital lease obligations of the Company; (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Company and all obligations of the Company
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business); (iv) all obligations of the Company
for the reimbursement of any letter of credit, any banker’s acceptance, any
security purchase facility, any repurchase agreement or similar arrangement, any
interest rate swap, any other hedging arrangement, any obligation under

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options or any similar credit or other transaction; (v) all obligations of the
type referred to in clauses (i) through (iv) above of other Persons for the
payment of which the Company is responsible or liable as obligor, guarantor or
otherwise; and (vi) all obligations of the type referred to in clauses (i)
through (v) above of other Persons secured by any lien on any property or asset
of the Company (whether or not such obligation is assumed by the Company),
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless (1) with the prior approval of the Federal Reserve or OTS, as
applicable, if not otherwise generally approved, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are not superior or are pari passu in right of payment to
the Debt Securities; or (2) the Federal Reserve or OTS, as applicable, shall
hereafter classify or otherwise recognize any such obligation as pari passu or
subordinate to the Debt Securities.

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

                    “Special Redemption Date” has the meaning set forth in
Section 10.02.

                    “Special Redemption Price” means, with respect to the
redemption of any Debt Security following a Special Event, an amount in cash
equal to 104% of the principal amount of Debt Securities to be redeemed prior to
July 7, 2007 and thereafter equal to the percentage of the principal amount of
the Debt Securities that is specified below for the Special Redemption Date
plus, in each case, unpaid interest accrued thereon to the Special Redemption
Date:

 

 

 

Special Redemption During the
12-Month Period Beginning July 7

 

Percentage of Principal Amount

 

 

 

2007

 

103%

2008

 

102%

2009

 

101%

2010 and thereafter

 

100%

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

                    “Tax Event” means the receipt by the Company and the Trust
of an Opinion of Counsel experienced in such matters to the effect that, as a
result of any amendment to or change

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

                    “Trust” means CVB Statutory Trust No. 2, the Delaware
statutory trust, or any other similar trust created for the purpose of issuing
Capital Securities in connection with the issuance of Debt Securities under this
Indenture, of which the Company is the sponsor.

                    “Trust Indenture Act” means the Trust Indenture Act of 1939,
as amended from time-to-time, or any successor legislation.

                    “Trust Securities” means Common Securities and Capital
Securities of CVB Statutory Trust No. 2.

                    “Trustee” means the Person identified as “Trustee” in the
first paragraph hereof, and, subject to the provisions of Article VI hereof,
shall also include its successors and assigns as Trustee hereunder.

                    “United States” means the United States of America and the
District of Columbia.

                    “U.S. Person” has the meaning given to United States Person
as set forth in Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended.

ARTICLE II

DEBT SECURITIES

          SECTION 2.01. Authentication and Dating.

                    Upon the execution and delivery of this Indenture, or from
time to time thereafter, Debt Securities in an aggregate principal amount not in
excess of $7,217,000 may be executed and delivered by the Company to the Trustee
for authentication, and the Trustee shall thereupon authenticate and make
available for delivery said Debt Securities to or upon the written order of the
Company, signed by its Chairman of the Board of Directors, Vice Chairman,
President or

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Chief Financial Officer or one of its Vice Presidents, without any further
action by the Company hereunder. In authenticating such Debt Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Debt Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon 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 or other officers with
appropriate delegated authority of the Company as the case may be.

                    The Trustee shall have the right to decline to authenticate
and deliver any Debt Securities under this Section if the Trustee, being advised
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
Securityholders.

                    The definitive Debt Securities 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 Debt Securities,
as evidenced by their execution of such Debt Securities.

          SECTION 2.02. Form of Trustee’s Certificate of Authentication.

                    The Trustee’s certificate of authentication on all Debt
Securities shall be in substantially the following form:

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

                    WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its
individual capacity but solely as trustee

 

 

 

 

 

By

 

 

 

 

Authorized Officer

 

          SECTION 2.03. Form and Denomination of Debt Securities.

                    The Debt Securities shall be substantially in the form of
Exhibit A hereto. The Debt Securities shall be in registered, certificated form
without coupons and in minimum denominations of $100,000 and any multiple of
$1,000 in excess thereof. The Debt Securities 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 2.04. Execution of Debt Securities.

                    The Debt Securities shall be signed in the name and on
behalf of the Company by the manual or facsimile signature of its Chairman of
the Board of Directors, Vice Chairman, President or Chief Financial Officer or
one of its Executive Vice Presidents, Senior Vice Presidents or Vice Presidents,
by facsimile or otherwise, and which need not be attested. Only such Debt
Securities 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

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signature of an authorized officer, 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 Debt Security executed by the
Company shall be conclusive evidence that the Debt Security so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.

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

                    Every Debt Security shall be dated the date of its
authentication.

          SECTION 2.05. Exchange and Registration of Transfer of Debt
Securities.

                    The Company shall cause to be kept, at the office or agency
maintained for the purpose of registration of transfer and for exchange as
provided in Section 3.02, a register (the “Debt Security Register”) for the Debt
Securities issued hereunder in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration and transfer of
all Debt Securities as provided in this Article II. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time.

                    Debt Securities to be exchanged may be surrendered at the
Principal Office of the Trustee or at any office or agency to be maintained by
the Company for such purpose as provided in Section 3.02, and the Company shall
execute, the Company or the Trustee shall register and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in
exchange therefor the Debt Security or Debt Securities which the Securityholder
making the exchange shall be entitled to receive. Upon due presentment for
registration of transfer of any Debt Security at the Principal Office of the
Trustee or at any office or agency of the Company maintained for such purpose as
provided in Section 3.02, the Company shall execute, the Company or the Trustee
shall register and the Trustee or the Authenticating Agent shall authenticate
and make available for delivery in the name of the transferee or transferees a
new Debt Security for a like aggregate principal amount. Registration or
registration of transfer of any Debt Security by the Trustee or by any agent of
the Company appointed pursuant to Section 3.02, and delivery of such Debt
Security, shall be deemed to complete the registration or registration of
transfer of such Debt Security.

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

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

                    The Company or the Trustee shall not be required to exchange
or register a transfer of any Debt Security for a period of 15 days immediately
preceding the date of selection of Debt Securities for redemption.

                    Notwithstanding the foregoing, Debt Securities may not be
transferred except in compliance with the restricted securities legend set forth
below, unless otherwise determined by the Company in accordance with applicable
law, which legend shall be placed on each Debt Security:

                    THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR
ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY
(A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO A “NON U.S. PERSON” IN
AN “OFFSHORE TRANSACTION” PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (D)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN “ACCREDITED INVESTOR,” 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 (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

                    THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES,
REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING

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TRANSACTIONS INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE
WITH THE SECURITIES ACT OR AN APPLICABLE EXEMPTION THEREFROM.

                    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 THIS SECURITY OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
96-23,95-60,91-38,90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE
AND HOLDING OF THIS SECURITY 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 THIS SECURITY 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.

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

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

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                    THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE
UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL
DEPOSIT INSURANCE CORPORATION (THE “FDIC”). THIS OBLIGATION IS SUBORDINATED TO
THE CLAIMS OF DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.

          SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debt Securities.

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

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

                    Every substituted Debt Security issued pursuant to the
provisions of this Section 2.06 by virtue of the fact that any such Debt
Security is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Debt
Security 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 Debt
Securities duly issued hereunder. All Debt Securities 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 Debt Securities 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.

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          SECTION 2.07. Temporary Debt Securities.

                    Pending the preparation of definitive Debt Securities, the
Company may execute and the Trustee shall authenticate and make available for
delivery temporary Debt Securities that are typed, printed or lithographed.
Temporary Debt Securities shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debt Securities but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every such temporary Debt
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Securities. Without unreasonable delay, the
Company will execute and deliver to the Trustee or the Authenticating Agent
definitive Debt Securities and thereupon any or all temporary Debt Securities
may be surrendered in exchange therefor, at the Principal Office of the Trustee
or at any office or agency maintained by the Company for such purpose as
provided in Section 3.02, and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange for such temporary Debt
Securities a like aggregate principal amount of such definitive Debt Securities.
Such exchange shall be made by the Company at its own expense and without any
charge therefor except that in case of any such exchange involving a
registration of transfer the Company may require payment of a sum sufficient to
cover any tax, fee or other governmental charge that may be imposed in relation
thereto. Until so exchanged, the temporary Debt Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Debt
Securities authenticated and delivered hereunder.

          SECTION 2.08. Payment of Interest.

                    Each Debt Security will bear interest at the then applicable
Interest Rate from and including each Interest Payment Date or, in the case of
the first Interest Payment Period, the original date of issuance of such Debt
Security to, but excluding, the next succeeding Interest Payment Date or, in the
case of the last Interest Payment Period, the Redemption Date, Special
Redemption Date or Maturity Date, as applicable, on the principal thereof, on
any overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on Deferred Interest and on any overdue
installment of interest (including Defaulted Interest), payable (subject to the
provisions of Article XV) on each Interest Payment Date commencing on October 7,
2006. Interest and any Deferred Interest on any Debt Security that is payable,
and is punctually paid or duly provided for by the Company, on any Interest
Payment Date shall be paid to the Person in whose name said Debt Security (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 Deferred Interest payable on the Maturity Date, the Redemption Date (to the
extent redeemed) or the Special Redemption Date, shall be paid to the Person to
whom principal is paid. In (i) case the Maturity Date of any Debt Security or
(ii) the event that any Debt Security or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date and either on or prior to such Interest
Payment Date, interest on such Debt Security will be paid upon presentation and
surrender of such Debt Security.

                    Any interest on any Debt Security, other than Deferred
Interest, that is payable, but is not punctually paid or duly provided for by
the Company, on any Interest Payment Date

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(herein called “Defaulted Interest”) shall forthwith cease to be payable to the
registered holder on the relevant regular record date by virtue of having been
such holder, and such Defaulted Interest shall be paid by the Company to the
Persons in whose names such Debt Securities (or their respective Predecessor
Securities) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner: the Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Debt Security and the date
of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements reasonably
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 fifteen nor less than ten days
prior to the date of the proposed payment and not less than ten days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her address as it
appears in the Debt Security Register, not less than ten 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 Debt
Securities (or their respective Predecessor Securities) are registered on such
special record date and thereafter the Company shall have no further payment
obligation in respect of the Defaulted Interest.

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

                    The term “regular record date” as used in this Section shall
mean the fifteenth day prior to the applicable Interest Payment Date, whether or
not such date is a Business Day.

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

          SECTION 2.09. Cancellation of Debt Securities Paid, etc.

                    All Debt Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer, shall, if surrendered to the
Company or any Paying Agent, be surrendered to the Trustee and promptly canceled
by it, or, if surrendered to the Trustee or any Authenticating Agent, shall be
promptly canceled by it, and no Debt Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. All
Debt Securities canceled by any Authenticating Agent shall be delivered to the
Trustee. The Trustee shall destroy all canceled Debt Securities unless the
Company otherwise directs the Trustee in writing, in which case the Trustee
shall dispose of such Debt Securities as directed by

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the Company. If the Company shall acquire any of the Debt Securities, however,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debt Securities unless and until the same are
surrendered to the Trustee for cancellation.

          SECTION 2.10. Computation of Interest.

                    (a)          The amount of interest payable for any Interest
Payment Period will be computed on the basis of a 360-day year and the actual
number of days elapsed in the relevant interest period; provided, however, that
upon the occurrence of a Special Event Redemption pursuant to Section 10.02 the
amounts payable pursuant to this Indenture shall be calculated as set forth in
the definition of Special Redemption Price.

                    (b)          LIBOR, for any Interest Payment Period, shall
be determined by the Calculation Agent in accordance with the following
provisions:

 

 

 

               (1)          On the second LIBOR Business Day (provided, that on
such day commercial banks are open for business (including dealings in foreign
currency deposits) in London (a “LIBOR Banking Day”), and otherwise the next
preceding LIBOR Business Day that is also a LIBOR Banking Day) prior to the
January 15, April 15, July 15 and October 15 immediately succeeding the
commencement of such Interest Payment Period (or, with respect to the first
Interest Payment Period, on June 26, 2006) (each such day, a “LIBOR
Determination Date” for such Interest Payment Period), the Calculation Agent
shall obtain the rate for three-month U.S. Dollar deposits in Europe, which
appears on Telerate Page 3750 (as defined in the International Swaps and
Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange
Definitions) or such other page as may replace such Telerate Page 3750 on the
Moneyline Telerate, Inc. service (or such other service or services as may be
nominated by the British Banker’s Association as the information vendor for the
purpose of displaying London interbank offered rates for U.S. dollar deposits),
as of 11:00 a.m. (London time) on such LIBOR Determination Date, and the rate so
obtained shall be LIBOR for such Interest Payment Period. “LIBOR Business Day”
means any day that is not a Saturday, Sunday or other day on which commercial
banking institutions in The City of New York or Wilmington, Delaware are
authorized or obligated by law or executive order to be closed. If such rate is
superseded on Telerate Page 3750 by a corrected rate before 12:00 noon (London
time) on the same LIBOR Determination Date, the corrected rate as so substituted
will be LIBOR for that Interest Payment Period.

 

 

 

               (2)          If, on any LIBOR Determination Date, such rate does
not appear on Telerate Page 3750 or such other page as may replace such Telerate
Page 3750 on the Moneyline Telerate, Inc. service (or such other service or
services as may be nominated by the British Banker’s Association as the
information vendor for the purpose of displaying London interbank offered rates
for U.S. dollar deposits), the Calculation Agent shall determine the arithmetic
mean of the offered quotations of the Reference Banks (as defined below) to
leading banks in the London Interbank market for three-month U.S. Dollar
deposits in Europe (in an

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amount determined by the Calculation Agent) by reference to requests for
quotations as of approximately 11:00 a.m. (London time) on the LIBOR
Determination Date made by the Calculation Agent to the Reference Banks. If, on
any LIBOR Determination Date, at least two of the Reference Banks provide such
quotations, LIBOR shall equal the arithmetic mean of such quotations. If, on any
LIBOR Determination Date, only one or none of the Reference Banks provide such a
quotation, LIBOR shall be deemed to be the arithmetic mean of the offered
quotations that at least two leading banks in the City of New York (as selected
by the Calculation Agent) are quoting on the relevant LIBOR Determination Date
for three-month U.S. Dollar deposits in Europe at approximately 11:00 a.m.
(London time) (in an amount determined by the Calculation Agent). As used
herein, “Reference Banks” means four major banks in the London Interbank market
selected by the Calculation Agent.

 

 

 

               (3)          If the Calculation Agent is required but is unable
to determine a rate in accordance with at least one of the procedures provided
above, LIBOR for the applicable Interest Payment Period shall be LIBOR in effect
for the immediately preceding Interest Payment Period.

                    (c)          All percentages resulting from any calculations
on the Debt Securities 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).

                    (d)          On each LIBOR Determination Date, the
Calculation Agent shall notify, in writing, the Company and the Paying Agent of
the applicable Interest Rate in effect for the related Interest Payment Period.
The Calculation Agent shall, upon the request of the holder of any Debt
Securities, provide the Interest Rate then in effect. All calculations made by
the Calculation Agent in the absence of manifest error shall be conclusive for
all purposes and binding on the Company and the holders of the Debt Securities.
The Paying Agent shall be entitled to rely on information received from the
Calculation Agent or the Company as to the Interest Rate. The Company shall,
from time to time, provide any necessary information to the Paying Agent
relating to any original issue discount and interest on the Debt Securities that
is included in any payment and reportable for taxable income calculation
purposes.

          SECTION 2.11. Extension of Interest Payment Period.

                    As long as it is acting in good faith, and so long as no
Event of Default pursuant to paragraphs (c), (e), (f) or (g) of Section 5.01 of
the Indenture has occurred and is continuing, the Company shall have the right,
from time to time and without causing an Event of Default, to defer payments of
interest on the Debt Securities by extending the interest distribution period on
the Debt Securities at any time and from time to time during the term of the
Debt Securities, for up to twenty consecutive quarterly periods (each such
extended interest distribution period, an “Extension Period”), during which
Extension Period no interest shall be due and payable (except any Additional
Interest that may be due and payable). No Extension Period may end on a date
other than an Interest Payment Date or extend beyond the Maturity Date, any
Redemption Date

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(to the extent redeemed) or any Special Redemption Date. During any Extension
Period, interest will continue to accrue on the Debt Securities, and interest on
such accrued interest (such accrued interest and interest thereon referred to
herein as “Deferred Interest”) will accrue at an annual rate equal to the
Interest Rate applicable during such Extension Period, compounded quarterly from
the date such Deferred Interest would have been payable were it not for the
Extension Period, to the extent permitted by law. No interest or Deferred
Interest shall be due and payable during an Extension Period, except at the end
thereof. At the end of any such Extension Period the Company shall pay all
Deferred Interest then accrued and unpaid on the Debt Securities; provided,
however, that no Extension Period may extend beyond the Maturity Date,
Redemption Date (to the extent redeemed) or Special Redemption Date; and
provided further, however, that during any such Extension Period, the Company
shall be subject to the restrictions set forth in Section 3.08 of this
Indenture. Prior to the termination of any Extension Period, the Company may
further extend such period, provided, that such period together with all such
previous and further consecutive extensions thereof shall not exceed twenty
consecutive quarterly periods, or extend beyond the Maturity Date, Redemption
Date (to the extent redeemed) or Special Redemption Date. Upon the termination
of any Extension Period and upon the payment of all Deferred Interest, the
Company may commence a new Extension Period, subject to the foregoing
requirements. The Company must give the Trustee notice of its election to begin
such Extension Period (“Notice”) not later than the related regular record date
for the relevant Interest Payment Date. The Notice shall describe, in reasonable
detail, why the Company has elected to begin an Extension Period. The Notice
shall acknowledge and affirm the Company’s understanding that it is prohibited
from issuing dividends and other distributions during the Extension Period. Upon
receipt of the Notice, an Initial Purchaser shall have the right, at its sole
discretion, to disclose the name of the Company, the fact that the Company has
elected to begin an Extension Period and other information that such Initial
Purchaser, at its sole discretion, deems relevant to the Company’s election to
begin an Extension Period. The Trustee shall give notice of the Company’s
election to begin a new Extension Period to the Securityholders.

          SECTION 2.12. CUSIP Numbers.

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

          SECTION 2.13. Global Debentures.

                    (a)          Upon the election of a holder of Outstanding
Debt Securities, which election need not be in writing, the Debt Securities
owned by such holder shall be issued in the form of one or more Global
Debentures registered in the name of the Depositary or its nominee. Each Global
Debenture issued under this Indenture shall be registered in the name of the
Depositary designated by the Company for such Global Debenture or a nominee
thereof and

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delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Debenture shall constitute a single Debt Security for all
purposes of this Indenture.

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

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

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

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

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

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

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

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ARTICLE III

PARTICULAR COVENANTS OF THE COMPANY

          SECTION 3.01. Payment of Principal, Premium and Interest; Agreed
Treatment of the Debt Securities.

                    (a)          The Company covenants and agrees that it will
duly and punctually pay or cause to be paid all payments due on the Debt
Securities at the place, at the respective times and in the manner provided in
this Indenture and the Debt Securities. At the option of the Company, each
installment of interest on the Debt Securities may be paid (i) by mailing checks
for such interest payable to the order of the holders of Debt Securities
entitled thereto as they appear on the Debt Security Register or (ii) by wire
transfer to any account with a banking institution located in the United States
designated by such Person to the Paying Agent no later than the related record
date.

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

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

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

          SECTION 3.02. Offices for Notices and Payments, etc.

                    So long as any of the Debt Securities remain outstanding,
the Company will maintain in Wilmington, Delaware an office or agency where the
Debt Securities may be presented for payment, an office or agency where the Debt
Securities may be presented for registration of transfer and for exchange as
provided in this Indenture and an office or agency where notices and demands to
or upon the Company in respect of the Debt Securities or of this Indenture may
be served. The Company will give to the Trustee written notice of the location
of any such office or agency and of any change of location thereof. Until
otherwise designated from time to time by the Company in a notice to the
Trustee, or specified as contemplated by Section

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2.05, such office or agency for all of the above purposes shall be the Principal
Office of the Trustee. In case the Company shall fail to maintain any such
office or agency in Wilmington, Delaware or shall fail to give such notice of
the location or of any change in the location thereof, presentations and demands
may be made and notices may be served at the Principal Office of the Trustee.

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

          SECTION 3.03. Appointments to Fill Vacancies in Trustee’s Office.

                    The Company, whenever necessary to avoid or fill a vacancy
in the office of Trustee, will appoint, in the manner provided in Section 6.09,
a Trustee, so that there shall at all times be a Trustee hereunder.

          SECTION 3.04. Provision as to Paying Agent.

                    (a)          If the Company shall appoint a Paying Agent
other than the Trustee, it will cause such Paying Agent to execute and deliver
to the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provision of this Section 3.04:

 

 

 

               (1)          that it will hold all sums held by it as such agent
for the payment of all payments due on the Debt Securities (whether such sums
have been paid to it by the Company or by any other obligor on the Debt
Securities) in trust for the benefit of the holders of the Debt Securities;

 

 

 

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

 

 

 

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

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

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                    Whenever the Company shall have one or more Paying Agents
for the Debt Securities, it will, on or prior to each due date of the payments
on the Debt Securities, deposit with a Paying Agent a sum sufficient to pay all
payments so becoming due, such sum to be held in trust for the benefit of the
Persons entitled thereto and (unless such Paying Agent is the Trustee) the
Company shall promptly notify the Trustee in writing of its action or failure to
act.

                    (c)          Anything in this Section 3.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge with respect to the Debt Securities, or for any other
reason, pay, or direct any Paying Agent to pay to the Trustee all sums held in
trust by the Company or any such Paying Agent, such sums to be held by the
Trustee upon the same terms and conditions herein contained.

                    (d)          Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
3.04 is subject to Sections 12.03 and 12.04.

                    (e)          The Company hereby initially appoints the
Trustee to act as Paying Agent (the “Paying Agent”).

          SECTION 3.05. Certificate to Trustee.

                    The Company will deliver to the Trustee on or before 120
days after the end of each fiscal year, so long as Debt Securities are
outstanding hereunder, a Certificate stating that in the course of the
performance by the signers of their duties as officers of the Company they would
normally have knowledge of any default by the Company in the performance of any
covenants of the Company 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 thereof.

          SECTION 3.06. Additional Interest.

                    If and for so long as the Trust is the holder of all Debt
Securities and is subject to or otherwise required to pay, or is required to
withhold from distributions to holders of Trust Securities, any additional taxes
(including withholding taxes), duties, assessments or other governmental charges
as a result of a Tax Event, the Company will pay such additional amounts (the
“Additional Interest”) on the Debt Securities as shall be required so that the
net amounts received and retained by the Trust for distribution to holders of
Trust Securities after paying all taxes (including withholding taxes on
distributions to holders of Trust Securities), duties, assessments or other
governmental charges will be equal to the amounts the Trust would have received
and retained for distribution to holders of Trust Securities after paying all
taxes (including withholding taxes on distributions to holders of Trust
Securities), duties, assessments or other governmental charges if no such
additional taxes, duties, assessments or other governmental charges had been
imposed. Whenever in this Indenture or the Debt Securities there is a reference
in any context to the payment of principal of or premium, if any, or interest on
the Debt Securities, such mention shall be deemed to include mention of payments
of the Additional Interest provided for in this paragraph to the extent that, in
such context, Additional Interest is, was or would be payable in respect thereof
pursuant to the provisions of this paragraph and

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express mention of the payment of Additional Interest (if applicable) in any
provisions hereof shall not be construed as excluding Additional Interest in
those provisions hereof where such express mention is not made, provided,
however, that notwithstanding anything to the contrary contained in this
Indenture or any Debt Security, the deferral of the payment of interest during
an Extension Period pursuant to Section 2.11 shall not defer the payment of any
Additional Interest that may be due and payable.

          SECTION 3.07. Compliance with Consolidation Provisions.

                    The Company will not, while any of the Debt Securities
remain outstanding, consolidate with, or merge into any other Person, or merge
into itself, or sell, convey, transfer or otherwise dispose of all or
substantially all of its property or capital stock to any other Person unless
the provisions of Article XI hereof are complied with.

          SECTION 3.08. Limitation on Dividends.

                    If Debt Securities are initially issued to the Trust or a
trustee of such Trust in connection with the issuance of Trust Securities by the
Trust (regardless of whether Debt Securities continue to be held by such Trust)
and (i) there shall have occurred and be continuing an Event of Default, (ii)
the Company shall be in default with respect to its payment of any obligations
under the Capital Securities Guarantee or (iii) the Company shall have given
notice of its election to defer payments of interest on the Debt Securities by
extending the interest distribution period as provided herein and such period,
or any extension thereof, shall have commenced and be continuing, then the
Company may not (A) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company’s capital stock or (B) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu in all respects with or junior in interest to the
Debt Securities or (C) make any payment under any guarantees of the Company that
rank pari passu in all respects with or junior in interest to the Capital
Securities Guarantee (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company (I) 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, (II)
in connection with a dividend reinvestment or stockholder stock purchase plan or
(III) in connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital stock), as
consideration in an acquisition transaction entered into prior to the occurrence
of (i), (ii) or (iii) above, (b) as a result of any exchange, reclassification,
combination or conversion of any class or series of the Company’s capital stock
(or any capital stock of a subsidiary of the Company) for any class or series of
the Company’s capital stock or of any class or series of the Company’s
indebtedness for any class or series of the Company’s capital stock, (c) the
purchase of fractional interests in shares of the Company’s capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder’s rights plan, or the issuance of rights, stock
or other property under any stockholder’s rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options or other rights where the dividend stock or the stock issuable
upon exercise of such warrants, options or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock).

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          SECTION 3.09. Covenants as to the Trust.

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

ARTICLE IV

LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

          SECTION 4.01. Securityholders’ Lists.

                    The Company covenants and agrees that it will furnish or
cause to be furnished to the Trustee:

                    (a)          on each regular record date for an Interest
Payment Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Securityholders of the Debt Securities as of such
record date; and

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

except that no such lists need be furnished under this Section 4.01 so long as
the Trustee is in possession thereof by reason of its acting as Debt Security
registrar.

          SECTION 4.02. Preservation and Disclosure of Lists.

                    (a)          The Trustee shall preserve, in as current a
form as is reasonably practicable, all information as to the names and addresses
of the holders of Debt Securities (1) contained in the most recent list
furnished to it as provided in Section 4.01 or (2) received by it in the
capacity of Debt Securities registrar (if so acting) hereunder. The Trustee may
destroy any list furnished to it as provided in Section 4.01 upon receipt of a
new list so furnished.

                    (b)          In case three or more holders of Debt
Securities (hereinafter referred to as “applicants”) apply in writing to the
Trustee and furnish to the Trustee reasonable proof that each such applicant has
owned a Debt Security for a period of at least six months preceding the date of
such application, and such application states that the applicants desire to
communicate with other holders of Debt Securities with respect to their rights
under this Indenture or under such Debt Securities and is accompanied by a copy
of the form of proxy or other communication

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which such applicants propose to transmit, then the Trustee shall within five
Business Days after the receipt of such application, at its election either:

 

 

 

               (1)          afford such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.02, or

 

 

 

               (2)          inform such applicants as to the approximate number
of holders of Debt Securities whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02, and as to the approximate
cost of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.

                    If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of Debt Securities whose name and
address appear in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this Section 4.02 a copy of
the form of proxy or other communication which is specified in such request with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission, if
permitted or required by applicable law, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
all Debt Securities, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If said
Commission, as permitted or required by applicable law, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, said Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.

                    (c)          Each and every holder of Debt Securities, by
receiving and holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any Paying Agent shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debt Securities in accordance with the
provisions of subsection (b) of this Section 4.02, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
said subsection (b).

          SECTION 4.03. Financial and Other Information.

                    The Company shall deliver to each Securityholder (1) each
Report on Form 10-K and Form 10-Q prepared by the Company and filed with the
Securities and Exchange

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Commission in accordance with the Exchange Act within 7 days after the filing
thereof, (2) if the Company is not then (y) subject to Section 13 or 15(d) of
the Exchange Act or (z) exempt from reporting pursuant to Rule 12g3-2(b)
thereunder, the Company shall be required to provide within 45 days of the end
of each calendar quarterly period and 90 days after the end of each calendar
year, the information required to be provided by Rule 144A(d)(4) under the
Securities Act and (3) within 30 days after the end of the fiscal year of the
Company, Form 1099 or such other annual U.S. federal income tax information
statement required by the Code containing such information with regard to the
Debt Securities held by such holder as is required by the Code and the income
tax regulations of the U.S. Treasury thereunder.

                    The Company will cause copies of its regulatory reports to
be delivered to the Holder promptly following their filing with the Federal
Reserve.

ARTICLE V

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
DEFAULT

          SECTION 5.01. Events of Default.

                    The following events shall be “Events of Default” with
respect to Debt Securities:

                    (a)          the Company defaults in the payment of any
interest upon any Debt Security when it becomes due and payable (unless the
Company has elected and may defer interest payments pursuant to Section 2.11),
and continuance of such default for a period of 30 days; for the avoidance of
doubt, an extension of any interest distribution period by the Company in
accordance with Section 2.11 of this Indenture shall not constitute a default
under this clause 5.01(a); or

                    (b)          the Company defaults in the payment of all or
any part of the principal of (or premium, if any, on) any Debt Securities as and
when the same shall become due and payable either at maturity, upon redemption,
by declaration of acceleration pursuant to Section 5.01 of this Indenture or
otherwise; or

                    (c)          the Company defaults in the payment of any
interest upon any Debt Security when it becomes due and payable following the
nonpayment of any such interest for 20 or more consecutive quarterly periods; or

                    (d)          the Company defaults in the performance of, or
breaches, any of its covenants or agreements in Sections 3.06, 3.07, 3.08 or
3.09 of this Indenture and continuance of such default or breach for a period of
30 days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the holders of not
less than 25% in aggregate principal amount of the outstanding Debt Securities,
a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder; or

                    (e)          a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy,

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insolvency or other similar law now or hereafter in effect, or appoints a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property, or orders
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

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

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

                    If an Event of Default specified under clause (c) of this
Section 5.01 occurs and is continuing with respect to the Debt Securities, then,
and in each and every such case, unless the principal of the Debt Securities
shall have already become due and payable, either the Trustee or the holders of
not less than 25% in aggregate principal amount of the Debt Securities then
outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by Securityholders), may declare the entire principal of the Debt
Securities and any premium and interest accrued, but unpaid, thereon, if any, to
be due and payable immediately, and upon any such declaration the same shall
become immediately due and payable. If an Event of Default specified under
clause (e), (f) or (g) of this Section 5.01 occurs, then, in each and every such
case, the entire principal amount of the Debt Securities and any premium and
interest accrued, but unpaid, thereon shall ipso facto become immediately due
and payable without further action. Notwithstanding anything to the contrary in
this Section 5.01, if at any time during the period in which this Indenture
remains in force and effect, the Company ceases or elects to cease to be subject
to the supervision and regulations of the Federal Reserve, OTS, OCC or similar
regulatory authority overseeing bank, thrift, savings and loan or financial
holding companies or similar institutions requiring specifications for the
treatment of capital similar in nature to the capital adequacy guidelines under
the Federal Reserve rules and regulations, then the first sentence of this
paragraph shall be deemed to include clauses (a), (b) and (d) under this Section
5.01 as an Event of Default resulting in an acceleration of payment of the Debt
Securities to the same extent as provided herein for clause (c).

                    Anything in this Section 5.01 to the contrary
notwithstanding, if an Event of Default specified under clause (d) occurs and is
continuing, then, and in each and every such case, the Trustee, in its own name
and as trustee of an express trust, shall pursue all available remedies at law
and/or equity against the Company. The Company acknowledges and affirms that in
the event of breach of such covenants and agreements referenced in clause (d) of
this Section 5.01, the damages to the holders of the Debt Securities and the
Capital Securities may be difficult or impossible to ascertain. Therefore, in
addition to any remedies available at law for

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breach of any or all of said covenants or agreements, the holders of the Debt
Securities and the Capital Securities shall be entitled to injunctive or other
equitable relief in connection with the violation of any such covenants or
agreements referenced in Section 5.01(c).

                    The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the Debt Securities shall
have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, (i) the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Debt
Securities and all payments on the Debt Securities which shall have become due
otherwise than by acceleration (with interest upon all such payments and
Deferred Interest, to the extent permitted by law) 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 6.06, if any, and (ii) all Events of
Default under this Indenture, other than the non-payment of the payments on Debt
Securities 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 Debt Securities then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults and rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon; provided,
however, that if the Debt Securities are held by the Trust or a trustee of the
Trust, such waiver or rescission and annulment shall not be effective until the
holders of a majority in aggregate liquidation amount of the outstanding Capital
Securities of the Trust shall have consented to such waiver or rescission and
annulment.

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

          SECTION 5.02. Payment of Debt Securities on Default; Suit Therefor.

                    The Company covenants that upon the occurrence of an Event
of Default under paragraphs (c), (e), (f) or (g) of Section 5.01 of the
Indenture, the Company will pay to the Trustee, for the benefit of the holders
of the Debt Securities, the whole amount that then shall have become due and
payable on all Debt Securities including Deferred Interest accrued on the Debt
Securities; 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 6.06. In case the Company shall fail
forthwith to pay such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
any other obligor on such Debt Securities and

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collect in the manner provided by law out of the property of the Company or any
other obligor on such Debt Securities wherever situated the moneys adjudged or
decreed to be payable.

                    In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other obligor on the
Debt Securities under Bankruptcy Law, or in case a receiver or trustee shall
have been appointed for the property of the Company or such other obligor, or in
the case of any other similar judicial proceedings relative to the Company or
other obligor upon the Debt Securities, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of the Debt Securities 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 5.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the Debt
Securities and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for reasonable compensation
to the Trustee and each predecessor Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all other amounts due to the
Trustee under Section 6.06) and of the Securityholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Debt Securities,
or to the creditors or property of the Company or such other obligor, unless
prohibited by applicable law and regulations, to vote on behalf of the holders
of the Debt Securities 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,
and to collect and receive any moneys or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of its
charges and expenses; and 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 6.06.

                    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 Debt Securities 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 Debt Securities, may be enforced by the Trustee
without the possession of any of the Debt Securities, 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 Debt Securities.

                    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

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Trustee shall be held to represent all the holders of the Debt Securities, and
it shall not be necessary to make any holders of the Debt Securities parties to
any such proceedings.

          SECTION 5.03. Application of Moneys Collected by Trustee.

                    Any moneys collected by the Trustee 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 Debt Securities 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 6.06;

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

                    Third: To the payment of the amounts then due and unpaid
upon Debt Securities, 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 Debt Securities; and

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

          SECTION 5.04. Proceedings by Securityholders.

                    No holder of any Debt Security 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 Debt Securities and unless the holders of not less
than 25% in aggregate principal amount of the Debt Securities then outstanding
shall have given the Trustee a written request to institute such action, suit or
proceeding and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred thereby,
and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity shall have failed to institute any such action, suit or proceeding;
provided, that no holder of Debt Securities shall have any right to prejudice
the rights of any other holder of Debt Securities, obtain priority or preference
over any other such holder or enforce any right under this Indenture except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Debt Securities.

                    Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Debt Security to receive payment of the
principal of, premium, if any, and interest on such Debt Security when due, or
to institute suit for the enforcement of any such payment, shall not be impaired
or affected without the consent of such holder. For the protection and
enforcement of the provisions of this Section, each and every Securityholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.

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          SECTION 5.05. Proceedings by Trustee.

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

          SECTION 5.06. Remedies Cumulative and Continuing.

                    Except as otherwise provided in Section 2.06, all powers and
remedies given by this Article V to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to the Debt Securities, and no delay or
omission of the Trustee or of any holder of any of the Debt Securities to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.04, every power and remedy given by this
Article V or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.

          SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.

                    The holders of a majority in aggregate principal amount of
the Debt Securities affected (voting as one class) at the time outstanding and,
if the Debt Securities are held by the Trust or a trustee of the Trust, the
holders of a majority in aggregate liquidation amount of the outstanding Capital
Securities of the Trust shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to such Debt
Securities; provided, however, that if the Debt Securities are held by the Trust
or a trustee of the Trust, such time, method and place or such exercise, as the
case may be, may not be so directed until the holders of a majority in aggregate
liquidation amount of the outstanding Capital Securities of the Trust shall have
directed such time, method and place or such exercise, as the case may be;
provided, further, that (subject to the provisions of Section 6.01) the Trustee
shall have the right to decline to follow any such direction if the Trustee
being advised by counsel shall determine that the action so directed would be
unjustly prejudicial to the holders not taking part in such direction or if the
Trustee being advised by counsel determines that the action or proceeding so
directed may not lawfully be taken or if a Responsible Officer of the Trustee
shall determine that the action or proceedings so directed would involve the
Trustee in personal liability. Prior to any declaration of acceleration, or ipso
facto acceleration, of the maturity of the Debt Securities, the holders of a
majority in aggregate principal amount of the Debt Securities at the time
outstanding may on behalf of the holders of all of the Debt Securities waive (or
modify any previously granted

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waiver of) any past default or Event of Default and its consequences, except a
default (a) in the payment of principal of, premium, if any, or interest on any
of the Debt Securities, (b) in respect of covenants or provisions hereof which
cannot be modified or amended without the consent of the holder of each Debt
Security affected, or (c) in respect of the covenants contained in Section 3.09;
provided, however, that if the Debt Securities are held by the Trust or a
trustee of the Trust, such waiver or modification to such waiver shall not be
effective until the holders of a majority in Liquidation Amount of the Trust
Securities of the Trust shall have consented to such waiver or modification to
such waiver; provided, further, that if the consent of the holder of each
outstanding Debt Security is required, such waiver or modification to such
waiver shall not be effective until each holder of the outstanding Capital
Securities of the Trust shall have consented to such waiver or modification to
such waiver. Upon any such waiver or modification to such waiver, the Default or
Event of Default covered thereby shall be deemed to be cured for all purposes of
this Indenture and the Company, the Trustee and the holders of the Debt
Securities shall be restored to their former positions and rights hereunder,
respectively; but no such waiver or modification to such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon. Whenever any Default or Event of Default hereunder shall
have been waived as permitted by this Section 5.07, said Default or Event of
Default shall for all purposes of the Debt Securities and this Indenture be
deemed to have been cured and to be not continuing.

          SECTION 5.08. Notice of Defaults.

                    The Trustee shall, within 90 days after a Responsible
Officer of the Trustee shall have actual knowledge or received written notice of
the occurrence of a Default with respect to the Debt Securities, mail to all
Securityholders, as the names and addresses of such holders appear upon the Debt
Security Register, notice of all Defaults with respect to the Debt Securities
actually known to the Trustee, unless such Defaults shall have been cured before
the giving of such notice (the term “Defaults” for the purpose of this Section
5.08 being hereby defined to be the events specified in subsections (a), (b),
(c), (d), (e), (f) and (g) of Section 5.01, not including periods of grace, if
any, provided for therein); provided, that, except in the case of default in the
payment of the principal of, premium, if any, or interest on any of the Debt
Securities, the Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders.

          SECTION 5.09. Undertaking to Pay Costs.

                    All parties to this Indenture agree, and each holder of any
Debt Security by such holder’s acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 5.09 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more than
10% in principal amount of the Debt

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Securities (or, if such Debt Securities are held by the Trust or a trustee of
the Trust, more than 10% in liquidation amount of the outstanding Capital
Securities) to any suit instituted by any Securityholder for the enforcement of
the payment of the principal of (or premium, if any) or interest on any Debt
Security against the Company on or after the same shall have become due and
payable, or to any suit instituted in accordance with Section 14.12.

ARTICLE VI

CONCERNING THE TRUSTEE

          SECTION 6.01. Duties and Responsibilities of Trustee.

                    With respect to the holders of Debt Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with
respect to the Debt Securities and after the curing or waiving of all Events of
Default which may have occurred, with respect to the Debt Securities, undertakes
to perform such duties and only such duties as are specifically set forth in
this Indenture. In case an Event of Default with respect to the Debt Securities
has occurred (which has not been cured or waived) the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of such person’s own affairs.

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

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

 

 

 

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

 

 

 

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

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

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                    (c)          the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith, in accordance with
the direction of the Securityholders pursuant to Section 5.07, relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture;

                    (d)          the Trustee shall not be charged with knowledge
of any Default or Event of Default with respect to the Debt Securities unless
either (1) a Responsible Officer shall have actual knowledge of such Default or
Event of Default or (2) written notice of such Default or Event of Default shall
have been given to the Trustee by the Company or any other obligor on the Debt
Securities or by any holder of the Debt Securities, except with respect to an
Event of Default pursuant to Sections 5.01 (a) or 5.01 (b) hereof (other than an
Event of Default resulting from the default in the payment of Additional
Interest or premium, if any, if the Trustee does not have actual knowledge or
written notice that such payment is due and payable), of which the Trustee shall
be deemed to have knowledge; and

                    (e)          in the absence of bad faith on the part of the
Trustee, the Trustee may seek and rely on reasonable instructions from the
Company.

                    None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers.

          SECTION 6.02. Reliance on Documents, Opinions, etc.

                    Except as otherwise provided in Section 6.01:

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

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

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

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

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

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

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

          SECTION 6.03. No Responsibility for Recitals, etc.

                    The recitals contained herein and in the Debt Securities
(except in the certificate of authentication of the Trustee or the
Authenticating Agent) shall be taken as the statements of the Company, and the
Trustee and the Authenticating Agent assume no responsibility for the
correctness of the same. The Trustee and the Authenticating Agent make no
representations as to the validity or sufficiency of this Indenture or of the
Debt Securities. The Trustee and the Authenticating Agent shall not be
accountable for the use or application by the Company of any Debt Securities or
the proceeds of any Debt Securities authenticated and delivered by the Trustee
or the Authenticating Agent in conformity with the provisions of this Indenture.

          SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debt Securities.

                    The Trustee or any Authenticating Agent or any Paying Agent
or any transfer agent or any Debt Security registrar, in its individual or any
other capacity, may become the owner or pledgee of Debt Securities with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
transfer agent or Debt Security registrar.

          SECTION 6.05. Moneys to be Held in Trust.

                    Subject to the provisions of Section 12.04, all moneys
received by the Trustee or any Paying Agent shall, until used or applied as
herein provided, be held in trust for the purpose for which they were received,
but need not be segregated from other funds except to the extent

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required by law. The Trustee and any Paying Agent shall be under no liability
for interest on any money received by it hereunder except as otherwise agreed in
writing with the Company. So long as no Event of Default shall have occurred and
be continuing, all interest allowed on any such moneys, if any, shall be paid
from time to time to the Company upon the written order of the Company, signed
by the Chairman of the Board of Directors, the President, the Chief Operating
Officer, a Vice President, the Treasurer or an Assistant Treasurer of the
Company.

          SECTION 6.06. Compensation and Expenses of Trustee.

                    Other than as provided in the Fee Agreement of even date
herewith, the Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as shall be agreed
to in writing between the Company and the Trustee (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its written
request for all documented reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance that arises from its
negligence, willful misconduct or bad faith. The Company also covenants to
indemnify each of the Trustee (including in its individual capacity) and any
predecessor Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless against, any and all loss, damage, claim, liability or
expense including taxes (other than taxes based on the income of the Trustee),
except to the extent such loss, damage, claim, liability or expense results from
the negligence, willful misconduct or bad faith of such indemnitee, arising out
of or in connection with the acceptance or administration of this Trust,
including the costs and expenses of defending itself against any claim or
liability in the premises. The obligations of the Company under this Section
6.06 to compensate and indemnify the Trustee and to pay or reimburse the Trustee
for documented expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by (and
the Company hereby grants and pledges to the Trustee) a lien prior to that of
the Debt Securities upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the benefit of the holders of particular
Debt Securities.

                    Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses or renders
services in connection with an Event of Default specified in subsections (d),
(e) or (f) of Section 5.01, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.

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

          SECTION 6.07. Officers’ Certificate as Evidence.

                    Except as otherwise provided in Sections 6.01 and 6.02,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable

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that a matter be proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence, willful misconduct
or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers’ Certificate delivered to the Trustee, and such
certificate, in the absence of negligence, willful misconduct or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken or omitted by it under the provisions of this Indenture upon the faith
thereof.

          SECTION 6.08. Eligibility of Trustee.

                    The Trustee hereunder shall at all times be a U.S. Person
that is a banking corporation or national association organized and doing
business under the laws of the United States of America or any state thereof or
of the District of Columbia and authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least fifty million
U.S. dollars ($50,000,000) and subject to supervision or examination by federal,
state, or District of Columbia authority. If such corporation or national
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 6.08 the combined capital and surplus of such
corporation or national association shall be deemed to be its combined capital
and surplus as set forth in its most recent records of condition so published.

                    The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with the Company,
serve as Trustee, notwithstanding that such corporation or national association
shall be otherwise eligible and qualified under this Article.

                    In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section 6.08, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.09.

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

          SECTION 6.09. Resignation or Removal of Trustee, Calculation Agent,
Paying Agent or Debt Security Registrar.

                    (a)          The Trustee, or any trustee or trustees
hereafter appointed, the Calculation Agent, the Paying Agent and any Debt
Security Registrar may at any time resign by giving written notice of such
resignation to the Company and by mailing notice thereof, at the Company’s
expense, to the holders of the Debt Securities at their addresses as they shall
appear on the Debt Security Register. Upon receiving such notice of resignation,
the Company shall promptly appoint a successor or successors by written
instrument, in duplicate, executed by order of its Board of Directors, one copy
of which instrument shall be delivered to the resigning party and one copy to
the successor. If no successor shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation to
the affected Securityholders, the resigning party may petition any court of
competent jurisdiction for the

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appointment of a successor, or any Securityholder who has been a bona fide
holder of a Debt Security or Debt Securities for at least six months may,
subject to the provisions of Section 5.09, on behalf of himself or herself and
all others similarly situated, petition any such court for the appointment of a
successor. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor.

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

 

 

 

               (1)          the Trustee shall fail to comply with the provisions
of the last paragraph of Section 6.08 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder of a Debt
Security or Debt Securities for at least six months,

 

 

 

               (2)          the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.08 and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or

 

 

 

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

then, in any such case, the Company may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 5.09, if no successor Trustee shall have been so appointed
and have accepted appointment within 30 days of the occurrence of any of (1),
(2) or (3) above, any Securityholder who has been a bona fide holder of a Debt
Security or Debt Securities for at least six months may, on behalf of himself or
herself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor Trustee.

                    (c)          Upon prior written notice to the Company and
the Trustee, the holders of a majority in aggregate principal amount of the Debt
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor Trustee, which shall be deemed appointed as successor
Trustee unless within ten Business Days after such nomination the Company
objects thereto, in which case or in the case of a failure by such holders to
nominate a successor Trustee, the Trustee so removed or any Securityholder, upon
the terms and conditions and otherwise as in subsection (a) of this Section 6.09
provided, may petition any court of competent jurisdiction for an appointment of
a successor.

                    (d)          Any resignation or removal of the Trustee, the
Calculation Agent, the Paying Agent and any Debt Security Registrar and
appointment of a successor pursuant to any of the provisions of this Section
6.09 shall become effective upon acceptance of appointment by the successor as
provided in Section 6.10.

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          SECTION 6.10. Acceptance by Successor.

                    Any successor Trustee, Calculation Agent, Paying Agent or
Debt Security Registrar appointed as provided in Section 6.09 shall execute,
acknowledge and deliver to the Company and to its predecessor an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the retiring party shall become effective and such successor, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations with respect to the Debt Securities of its
predecessor hereunder, with like effect as if originally named herein; but,
nevertheless, on the written request of the Company or of the successor, the
party ceasing to act shall, upon payment of the amounts then due it pursuant to
the provisions of Section 6.06, execute and deliver an instrument transferring
to such successor all the rights and powers of the party so ceasing to act and
shall duly assign, transfer and deliver to such successor all property and money
held by such retiring party hereunder. Upon request of any such successor, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor all such rights and
powers. Any party ceasing to act shall, nevertheless, retain a lien upon all
property or funds held or collected to secure any amounts then due it pursuant
to the provisions of Section 6.06.

                    If a successor Trustee is appointed, the Company, the
retiring Trustee and the successor Trustee shall execute and deliver an
indenture supplemental hereto which shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Debt Securities as to which
the predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the Trust hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee.

                    No successor Trustee shall accept appointment as provided in
this Section 6.10 unless at the time of such acceptance such successor Trustee
shall be eligible and qualified under the provisions of Section 6.08.

                    In no event shall a retiring Trustee, Calculation Agent,
Paying Agent or Debt Security Registrar be liable for the acts or omissions of
any successor hereunder.

                    Upon acceptance of appointment by a successor Trustee,
Calculation Agent, Paying Agent or Debt Security Registrar as provided in this
Section 6.10, the Company shall mail notice of the succession to the holders of
Debt Securities at their addresses as they shall appear on the Debt Security
Register. If the Company fails to mail such notice within ten Business Days
after the acceptance of appointment by the successor, the successor shall cause
such notice to be mailed at the expense of the Company.

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          SECTION 6.11. Succession by Merger, etc.

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

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

          SECTION 6.12. Authenticating Agents.

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

                    Any Person into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, consolidation or conversion to which any Authenticating Agent shall
be a party, or any Person succeeding to all or substantially all of the
corporate trust business of any Authenticating Agent, shall be the successor of
such Authenticating Agent hereunder, if such successor Person is otherwise
eligible

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under this Section 6.12 without the execution or filing of any paper or any
further act on the part of the parties hereto or such Authenticating Agent.

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

                    Other than as provided in the Fee Agreement of even date
herewith, the Company agrees to pay to any Authenticating Agent from time to
time reasonable compensation for its services. Any Authenticating Agent shall
have no responsibility or liability for any action taken by it as such in
accordance with the directions of the Trustee and shall receive such reasonable
indemnity as it may require against the costs, expenses and liabilities incurred
in furtherance of its duties under this Section 6.12.

ARTICLE VII

CONCERNING THE SECURITYHOLDERS

          SECTION 7.01. Action by Securityholders.

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

                    If the Company shall solicit from the Securityholders any
request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same, the Company may, at its option, as evidenced
by an Officers’ Certificate, fix in advance a record date

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for such Debt Securities for the determination of Securityholders entitled to
give such request, demand, authorization, direction, notice, consent, waiver or
other action or revocation of the same, but the Company shall have no obligation
to do so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action or revocation of the same may
be given before or after the record date, but only the Securityholders of record
at the close of business on the record date shall be deemed to be
Securityholders for the purposes of determining whether Securityholders of the
requisite proportion of outstanding Debt Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same, and for that purpose the
outstanding Debt Securities shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

          SECTION 7.02. Proof of Execution by Securityholders.

                    Subject to the provisions of Sections 6.01, 6.02 and 8.05,
proof of the execution of any instrument by a Securityholder or such
Securityholder’s agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The ownership of Debt
Securities shall be proved by the Debt Security Register or by a certificate of
the Debt Security Registrar. The Trustee may require such additional proof of
any matter referred to in this Section as it shall deem necessary.

                    The record of any Securityholders’ meeting shall be proved
in the manner provided in Section 8.06.

          SECTION 7.03. Who Are Deemed Absolute Owners.

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

          SECTION 7.04. Debt Securities Owned by Company Deemed Not Outstanding.

                    In determining whether the holders of the requisite
aggregate principal amount of Debt Securities have concurred in any direction,
consent or waiver under this Indenture, Debt Securities which are owned by the
Company or any other obligor on the Debt Securities or by

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any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company (other than the Trust) or any other
obligor on the Debt Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided, that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Debt Securities which a Responsible
Officer of the Trustee actually knows are so owned shall be so disregarded. Debt
Securities so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 7.04 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee’s right to vote such Debt
Securities and that the pledgee is not the Company or any such other obligor or
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In the case
of a dispute as to such right, any decision by the Trustee taken upon the advice
of counsel shall be full protection to the Trustee.

          SECTION 7.05. Revocation of Consents; Future Securityholders Bound.

                    At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.01, of the taking of any action by the holders
of the percentage in aggregate principal amount of the Debt Securities specified
in this Indenture in connection with such action, any holder (in cases where no
record date has been set pursuant to Section 7.01) or any holder as of an
applicable record date (in cases where a record date has been set pursuant to
Section 7.01) of a Debt Security (or any Debt Security issued in whole or in
part in exchange or substitution therefor) the serial number of which is shown
by the evidence to be included in the Debt Securities the holders of which have
consented to such action may, by filing written notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02, revoke such action so far as concerns such Debt Security (or so far as
concerns the principal amount represented by any exchanged or substituted Debt
Security). Except as aforesaid any such action taken by the holder of any Debt
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debt Security, and of any Debt Security issued in
exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.

ARTICLE VIII

SECURITYHOLDERS’ MEETINGS

          SECTION 8.01. Purposes of Meetings.

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

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

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

                    (c)          to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section 9.02; or

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

          SECTION 8.02. Call of Meetings by Trustee.

                    The Trustee may at any time call a meeting of
Securityholders to take any action specified in Section 8.01, to be held at such
time and at such place in New York or Wilmington, Delaware, as the Trustee shall
determine. Notice of every meeting of the Securityholders, setting forth the
time and the place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be mailed to holders of Debt Securities affected
at their addresses as they shall appear on the Debt Securities Register. Such
notice shall be mailed not less than 20 nor more than 180 days prior to the date
fixed for the meeting.

          SECTION 8.03. Call of Meetings by Company or Securityholders.

                    In case at any time the Company pursuant to a Board
Resolution, or the holders of at least 10% in aggregate principal amount of the
Debt Securities, as the case may be, then outstanding, shall have requested the
Trustee to call a meeting of Securityholders, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Company or such Securityholders may determine
the time and the place in for such meeting and may call such meeting to take any
action authorized in Section 8.01, by mailing notice thereof as provided in
Section 8.02.

          SECTION 8.04. Qualifications for Voting.

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

          SECTION 8.05. Regulations.

                    Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Securityholders, in regard to proof of the holding of Debt Securities
and of the appointment of proxies, and in regard to the appointment and duties
of inspectors of votes, the submission and examination of proxies,

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certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate.

                    The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote at the meeting.

                    Subject to the provisions of Section 7.04, at any meeting
each holder of Debt Securities with respect to which such meeting is being held
or proxy therefor shall be entitled to one vote for each $1,000 principal amount
of Debt Securities held or represented by such holder; provided, however, that
no vote shall be cast or counted at any meeting in respect of any Debt Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debt Securities held by such chairman or instruments in writing as
aforesaid duly designating such chairman as the Person to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.

          SECTION 8.06. Voting.

                    The vote upon any resolution submitted to any meeting of
holders of Debt Securities with respect to which such meeting is being held
shall be by written ballots on which shall be subscribed the signatures of such
holders or of their representatives by proxy and the serial number or numbers of
the Debt Securities held or represented by them. The permanent chairman of the
meeting shall appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 8.02. The record
shall show the serial numbers of the Debt Securities voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

          SECTION 8.07. Quorum; Actions.

                    The Persons entitled to vote a majority in outstanding
principal amount of the Debt Securities shall constitute a quorum for a meeting
of Securityholders; provided, however, that if any action is to be taken at such
meeting with respect to a consent, waiver, request, demand, notice,
authorization, direction or other action which may be given by the holders of
not

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less than a specified percentage in outstanding principal amount of the Debt
Securities, the Persons holding or representing such specified percentage in
outstanding principal amount of the Debt Securities will constitute a quorum. In
the absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Securityholders, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the permanent chairman of the meeting prior
to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days as determined by the permanent chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening of
any adjourned meeting shall be given as provided in Section 8.02, except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the outstanding principal amount of the Debt Securities which shall constitute a
quorum.

                    Except as limited by the proviso in the first paragraph of
Section 9.02, any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the holders of not less than a majority in outstanding
principal amount of the Debt Securities; provided, however, that, except as
limited by the proviso in the first paragraph of Section 9.02, any resolution
with respect to any consent, waiver, request, demand, notice, authorization,
direction or other action that this Indenture expressly provides may be given by
the holders of not less than a specified percentage in outstanding principal
amount of the Debt Securities may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid only by
the affirmative vote of the holders of not less than such specified percentage
in outstanding principal amount of the Debt Securities.

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

          SECTION 8.08. Written Consent Without a Meeting.

                    Whenever under this Indenture, Securityholders are required
or permitted to take any action by vote, such action may be taken without a
meeting on written consent, setting forth the action so taken, signed by the
Securityholders of all outstanding Debt Securities entitled to vote thereon. No
consent shall be effective to take the action referred to therein unless, within
sixty days of the earliest dated consent delivered in the manner required by
this paragraph to the Trustee, written consents signed by a sufficient number of
Securityholders to take action are delivered to the Trustee at its Principal
Office. Delivery made to the Trustee at its Principal Office, shall be by hand
or by certificated or registered mail, return receipt requested. Written consent
thus given by the Securityholders of such number of Debt Securities as is
required hereunder, shall have the same effect as a valid vote of
Securityholders of such number of Debt Securities.

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ARTICLE IX

SUPPLEMENTAL INDENTURES

          SECTION 9.01. Supplemental Indentures without Consent of
Securityholders.

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

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

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

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

                    (d)          to add to, delete from, or revise the terms of
Debt Securities, including, without limitation, any terms relating to the
issuance, exchange, registration or transfer of Debt Securities, including to
provide for transfer procedures and restrictions substantially similar to those
applicable to the Capital Securities, as required by Section 2.05 (for purposes
of assuring that no registration of Debt Securities is required under the
Securities Act of 1933, as amended); provided, that any such action shall not
adversely affect the interests of the holders of the Debt Securities then
outstanding (it being understood, for purposes of this proviso, that transfer
restrictions on Debt Securities substantially similar to those applicable to
Capital Securities shall not be deemed to adversely affect the holders of the
Debt Securities);

                    (e)          to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Debt Securities
and to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.10;

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

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

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

                    Any supplemental indenture authorized by the provisions of
this Section 9.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Debt Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.

          SECTION 9.02. Supplemental Indentures with Consent of Securityholders.

                    With the consent (evidenced as provided in Section 7.01) of
the holders of not less than a majority in aggregate principal amount of the
Debt Securities at the time outstanding affected by such supplemental indenture
(voting as a class), the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act, then in effect, applicable to indentures qualified
thereunder) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Debt Securities; provided, however, that no such supplemental indenture
shall without such consent of the holders of each Debt Security then outstanding
and affected thereby (i) extend the Maturity Date of any Debt Security, or
reduce the principal amount thereof or any premium thereon, or reduce the rate
(or manner of calculation of the rate) or extend the time of payment of interest
thereon, or reduce (other than as a result of the maturity or earlier redemption
of any such Debt Security in accordance with the terms of this Indenture and
such Debt Security) or increase the aggregate principal amount of Debt
Securities then outstanding, or change any of the redemption provisions, or make
the principal thereof or any interest or premium thereon payable in any coin or
currency other than United States Dollars, or impair or affect the right of any
Securityholder to institute suit for payment thereof or impair the right of
repayment, if any, at the option of the holder, or (ii) reduce the aforesaid
percentage of Debt Securities the holders of which are required to consent to
any such supplemental indenture; and provided, further, that if the Debt
Securities are held by the Trust or a trustee of such trust, such supplemental
indenture shall not be effective until the holders of a majority in Liquidation
Amount of the outstanding Capital Securities shall have consented to such
supplemental indenture; provided, further, that if the consent of the
Securityholder of each outstanding Debt Security is required, such supplemental
indenture shall not be effective until each holder of the outstanding Capital
Securities shall have consented to such supplemental indenture.

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

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

                    It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.

          SECTION 9.03. Effect of Supplemental Indentures.

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

          SECTION 9.04. Notation on Debt Securities.

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

          SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be
furnished to Trustee.

                    The Trustee, subject to the provisions of Sections 6.01 and
6.02, shall, in addition to the documents required by Section 14.06, receive an
Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article IX. The Trustee shall receive an Opinion of

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Counsel as conclusive evidence that any supplemental indenture executed pursuant
to this Article IX is authorized or permitted by, and conforms to, the terms of
this Article IX and that it is proper for the Trustee under the provisions of
this Article IX to join in the execution thereof.

ARTICLE X

REDEMPTION OF SECURITIES

          SECTION 10.01. Optional Redemption.

                    At any time the Company shall have the right, subject to the
receipt by the Company of prior approval from any regulatory authority with
jurisdiction over the Company if such approval is then required under applicable
capital guidelines or policies of such regulatory authority, to redeem the Debt
Securities, in whole or (provided that all accrued and unpaid interest has been
paid on all Debt Securities for all Interest Payment Periods terminating on or
prior to such date) from time to time in part, on any January 7, April 7, July 7
or October 7 on or after July 7, 2011 (the “Redemption Date”), at the Redemption
Price.

          SECTION 10.02. Special Event Redemption.

                    If a Special Event shall occur and be continuing, the
Company shall have the right, subject to the receipt by the Company of prior
approval from any regulatory authority with jurisdiction over the Company if
such approval is then required under applicable capital guidelines or policies
of such regulatory authority, to redeem the Debt Securities, in whole or in
part, at any time within 90 days following the occurrence of such Special Event
(the “Special Redemption Date”), at the Special Redemption Price.

          SECTION 10.03. Notice of Redemption; Selection of Debt Securities.

                    In case the Company shall desire to exercise the right to
redeem all, or, as the case may be, any part of the Debt Securities, it shall
fix a date for redemption and shall mail, or cause the Trustee to mail (at the
expense of the Company) a notice of such redemption at least 30 and not more
than 60 days prior to the date fixed for redemption to the holders of Debt
Securities so to be redeemed as a whole or in part at their last addresses as
the same appear on the Debt Security Register. Such mailing shall be by first
class mail. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Debt Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debt Security.

                    Each such notice of redemption shall specify the CUSIP
number, if any, of the Debt Securities to be redeemed, the date fixed for
redemption, the redemption price (or manner of calculation of the price) at
which Debt Securities are to be redeemed, the place or places of payment, that
payment will be made upon presentation and surrender of such Debt Securities,
that interest accrued to the date fixed for redemption will be paid as specified
in said notice, and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue. If less than all the Debt
Securities are to be redeemed the notice of redemption shall specify the numbers
of the Debt Securities to be redeemed. In case the Debt Securities are to be

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redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debt Security, a new Debt
Security or Debt Securities in principal amount equal to the unredeemed portion
thereof will be issued.

                    Prior to 10:00 a.m. New York City time on the Redemption
Date or the Special Redemption Date specified in the notice of redemption given
as provided in this Section, the Company will deposit with the Trustee or with
one or more Paying Agents an amount of money sufficient to redeem on the
redemption date all the Debt Securities so called for redemption at the
appropriate redemption price, together with unpaid interest accrued to such
date.

                    The Company will give the Trustee notice not less than 45
nor more than 60 days prior to the Redemption Date as to the Redemption Price at
which the Debt Securities are to be redeemed and the aggregate principal amount
of Debt Securities to be redeemed and the Trustee shall select, in such manner
as in its sole discretion it shall deem appropriate and fair, the Debt
Securities or portions thereof (in integral multiples of $1,000) to be redeemed.

          SECTION 10.04. Payment of Debt Securities Called for Redemption.

                    If notice of redemption has been given as provided in
Section 10.03, the Debt Securities or portions of Debt Securities with respect
to which such notice has been given shall become due and payable on the
Redemption Date or the Special Redemption Date (as the case may be) and at the
place or places stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and on and
after said Redemption Date or the Special Redemption Date (unless the Company
shall default in the payment of such Debt Securities at the redemption price,
together with unpaid interest accrued thereon to said date) interest on the Debt
Securities or portions of Debt Securities so called for redemption shall cease
to accrue. On presentation and surrender of such Debt Securities at a place of
payment specified in said notice, such Debt Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with unpaid interest accrued thereon to the Redemption Date or
the Special Redemption Date (as the case may be).

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

ARTICLE XI

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

          SECTION 11.01. Company May Consolidate, etc., on Certain Terms.

                    Nothing contained in this Indenture or in the Debt
Securities shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company) or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,

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conveyance, transfer or other disposition of all or substantially all of the
property or capital stock of the Company or its successor or successors, to any
other corporation (whether or not affiliated with the Company, or its successor
or successors) authorized to acquire and operate the same; provided, however,
that the Company hereby covenants and agrees that, (i) upon any such
consolidation, merger (where the Company is not the surviving corporation),
sale, conveyance, transfer or other disposition, the successor entity shall be a
corporation organized and existing under the laws of the United States or any
state thereof or the District of Columbia (unless such corporation has (1)
agreed to make all payments due in respect of the Debt Securities or, if
outstanding, the Capital Securities and Capital Securities Guarantee without
withholding or deduction for, or on account of, any taxes, duties, assessments
or other governmental charges under the laws or regulations of the jurisdiction
of organization or residence (for tax purposes) of such corporation or any
political subdivision or taxing authority thereof or therein unless required by
applicable law, in which case such corporation shall have agreed to pay such
additional amounts as shall be required so that the net amounts received and
retained by the holders of such Debt Securities or Capital Securities, as the
case may be, after payment of all taxes (including withholding taxes), duties,
assessments or other governmental charges, will be equal to the amounts that
such holders would have received and retained had no such taxes (including
withholding taxes), duties, assessments or other governmental charges been
imposed, (2) irrevocably and unconditionally consented and submitted to the
jurisdiction of any United States federal court or New York state court, in each
case located in The City of New York, Borough of Manhattan, in respect of any
action, suit or proceeding against it arising out of or in connection with this
Indenture, the Debt Securities, the Capital Securities Guarantee or the
Declaration and irrevocably and unconditionally waived, to the fullest extent
permitted by law, any objection to the laying of venue in any such court or that
any such action, suit or proceeding has been brought in an inconvenient forum
and (3) irrevocably appointed an agent in The City of New York for service of
process in any action, suit or proceeding referred to in clause (2) above) and
such corporation expressly assumes all of the obligations of the Company under
the Debt Securities, this Indenture, the Capital Securities Guarantee and the
Declaration and (ii) after giving effect to any such consolidation, merger,
sale, conveyance, transfer or other disposition, no Default or Event of Default
shall have occurred and be continuing.

          SECTION 11.02. Successor Entity to be Substituted.

                    In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition contemplated in Section 11.01 and upon the
assumption by the successor entity, by supplemental indenture, executed and
delivered to the Trustee and reasonably satisfactory in form to the Trustee, of
the due and punctual payment of the principal of and premium, if any, and
interest on all of the Debt Securities and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor entity shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the Company, and thereupon the predecessor entity shall be relieved of
any further liability or obligation hereunder or upon the Debt Securities. Such
successor entity thereupon may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Debt Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee or the Authenticating Agent; and, upon the order of
such successor entity instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee or the
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Agent shall authenticate and deliver any Debt Securities which previously shall
have been signed and delivered by the officers of the Company, to the Trustee or
the Authenticating Agent for authentication, and any Debt Securities which such
successor entity thereafter shall cause to be signed and delivered to the
Trustee or the Authenticating Agent for that purpose. All the Debt Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Debt Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Debt Securities had been
issued at the date of the execution hereof.

          SECTION 11.03. Opinion of Counsel to be Given to Trustee.

                    The Trustee, subject to the provisions of Sections 6.01 and
6.02, shall receive, in addition to the Opinion of Counsel required by Section
9.05, an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or other disposition, and any assumption,
permitted or required by the terms of this Article XI complies with the
provisions of this Article XI.

ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE

          SECTION 12.01. Discharge of Indenture.

                    When (a) the Company shall deliver to the Trustee for
cancellation all Debt Securities theretofore authenticated (other than any Debt
Securities which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.06) and not theretofore canceled,
or (b) all the Debt Securities not theretofore canceled or delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds, which shall be immediately due and payable, sufficient
to pay at maturity or upon redemption all of the Debt Securities (other than any
Debt Securities which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.06) not theretofore canceled
or delivered to the Trustee for cancellation, including principal and premium,
if any, and interest due or to become due to such date of maturity or redemption
date, as the case may be, but excluding, however, the amount of any moneys for
the payment of principal of, and premium, if any, or interest on the Debt
Securities (1) theretofore repaid to the Company in accordance with the
provisions of Section 12.04, or (2) paid to any state or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in the case
of either clause (a) or clause (b) the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect except for the provisions of Sections 2.05, 2.06,
3.01, 3.02, 3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such
Debt Securities shall mature or are redeemed, as the case may be, and are paid
in full. Thereafter, Sections 6.06, 6.09 and 12.04 shall survive, and the
Trustee, on demand of the Company accompanied by an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with, and at

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the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture, the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee in connection with
this Indenture or the Debt Securities.

          SECTION 12.02. Deposited Moneys to be Held in Trust by Trustee.

                    Subject to the provisions of Section 12.04, all moneys
deposited with the Trustee pursuant to Section 12.01 shall be held in trust and
applied by it to the payment, either directly or through any Paying Agent
(including the Company if acting as its own Paying Agent), to the holders of the
particular Debt Securities for the payment of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal, and premium, if any, and interest.

          SECTION 12.03. Paying Agent to Repay Moneys Held.

                    Upon the satisfaction and discharge of this Indenture, all
moneys then held by any Paying Agent of the Debt Securities (other than the
Trustee) shall, upon demand of the Company, be repaid to the Company or paid to
the Trustee, and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.

          SECTION 12.04. Return of Unclaimed Moneys.

                    Any moneys deposited with or paid to the Trustee or any
Paying Agent for payment of the principal of, and premium, if any, or interest
on Debt Securities and not applied but remaining unclaimed by the holders of
Debt Securities for two years after the date upon which the principal of, and
premium, if any, or interest on such Debt Securities, as the case may be, shall
have become due and payable, shall be repaid to the Company by the Trustee or
such Paying Agent on written demand; and the holder of any of the Debt
Securities shall thereafter look only to the Company for any payment which such
holder may be entitled to collect and all liability of the Trustee or such
Paying Agent with respect to such moneys shall thereupon cease.

ARTICLE XIII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

          SECTION 13.01. Indenture and Debt Securities Solely Corporate
Obligations.

                    No recourse for the payment of the principal of or premium,
if any, or interest on any Debt Security, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture, or in any such Debt Security, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer, director, employee or agent, as such, past, present or
future, of the Company or of any predecessor or successor corporation of the
Company, either directly or through the Company or any successor corporation of
the Company, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly

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understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debt Securities.

ARTICLE XIV

MISCELLANEOUS PROVISIONS

          SECTION 14.01. Successors.

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

          SECTION 14.02. Official Acts by Successor Entity.

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

          SECTION 14.03. Surrender of Company Powers.

                    The Company by instrument in writing executed by authority
of 2/3 (two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company hereunder and thereupon such
power so surrendered shall terminate both as to the Company and as to any
permitted successor.

          SECTION 14.04. Addresses for Notices, etc.

                    Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Securityholders on the Company may be given or served in writing by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee for such purpose) to the Company at:

Codorus Valley Bancorp, Inc.
105 Leader Heights Road
York, PA 17403
Attention: Jann Allen Weaver

                    Any notice, direction, request or demand by any
Securityholder or the Company to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing
at the office of Wells Fargo Bank, National Association at:

919 Market Street
Suite 700
Wilmington, DE 19801
Attention: Corporate Trust Division

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          SECTION 14.05. Governing Law.

                    This Indenture and each Debt Security shall be deemed to be
a contract made under the law of the State of New York, and for all purposes
shall be governed by and construed in accordance with the law of said State,
without regard to conflict of laws principles of said State other than Section 5
1401 of the New York General Obligations Law.

          SECTION 14.06. Evidence of Compliance with Conditions Precedent.

                    Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers’ Certificate stating that in the
opinion of the signers all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with (except that no such Opinion of Counsel is
required to be furnished to the Trustee in connection with the authentication
and issuance of Debt Securities issued on the date of this Indenture).

                    Each certificate or opinion provided for in this Indenture
and delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture (except certificates delivered pursuant
to Section 3.05) shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition; (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (c) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.

          SECTION 14.07. Non-Business Days.

                    Notwithstanding anything to the contrary contained herein,
if any Interest Payment Date, other than on the Maturity Date, any Redemption
Date or the Special Redemption Date, falls on a day that is not a Business Day,
then any interest payable will be paid on, and such Interest Payment Date will
be moved to, the next succeeding Business Day, and additional interest will
accrue for each day that such payment is delayed as a result thereof. If the
Maturity Date, any Redemption Date or the Special Redemption Date falls on a day
that is not a Business Day, then the principal, premium, if any, and/or interest
payable on such date will be paid on the next succeeding Business Day, and no
additional interest will accrue in respect of such payment made on such next
succeeding Business Day (except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding Business
Day).

          SECTION 14.08. Table of Contents, Headings, etc.

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

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          SECTION 14.09. Execution in Counterparts.

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

          SECTION 14.10. Severability.

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

          SECTION 14.11. Assignment.

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

          SECTION 14.12. Acknowledgment of Rights.

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

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ARTICLE XV

SUBORDINATION OF DEBT SECURITIES

          SECTION 15.01. Agreement to Subordinate.

                    The Company covenants and agrees, and each holder of Debt
Securities issued hereunder and under any supplemental indenture (the
“Additional Provisions”) by such Securityholder’s acceptance thereof likewise
covenants and agrees, that all Debt Securities shall be issued subject to the
provisions of this Article XV; and each holder of a Debt Security, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.

                    The payment by the Company of the payments due on all Debt
Securities issued hereunder and under any Additional Provisions shall, to the
extent and in the manner hereinafter set forth, be subordinated and junior in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or thereafter
incurred.

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

          SECTION 15.02. Default on Senior Indebtedness.

                    In the event and during the continuation of any default by
the Company in the payment of principal, premium, interest or any other payment
due on any Senior Indebtedness of the Company following any applicable grace
period, or in the event that the maturity of any Senior Indebtedness of the
Company has been accelerated because of a default, and such acceleration has not
been rescinded or canceled and such Senior Indebtedness has not been paid in
full, then, in either case, no payment shall be made by the Company with respect
to the payments due on the Debt Securities.

                    In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 15.02, such payment shall, subject to
Section 15.06, be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or a trustee) notify
the Trustee in writing within 90 days of such payment of the amounts then due
and owing on the Senior Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Senior Indebtedness.

          SECTION 15.03. Liquidation; Dissolution; Bankruptcy.

                    Upon any payment by the Company or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or

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

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

                    For purposes of this Article XV, the words “cash, property
or securities” shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided, that (a) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (b) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer or other
disposition of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article XI of
this Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 15.03 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article

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XI of this Indenture. Nothing in Section 15.02 or in this Section 15.03 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
6.06 of this Indenture.

          SECTION 15.04. Subrogation.

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

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

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

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          SECTION 15.05. Trustee to Effectuate Subordination.

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

          SECTION 15.06. Notice by the Company.

                    The Company shall give prompt written notice to a
Responsible Officer of the Trustee at the Principal Office of the Trustee of any
fact known to the Company that would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Debt Securities pursuant to the
provisions of this Article XV. Notwithstanding the provisions of this Article XV
or any other provision of this Indenture or any Additional Provisions, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of moneys to or by the Trustee in
respect of the Debt Securities pursuant to the provisions of this Article XV,
unless and until a Responsible Officer of the Trustee at the Principal Office of
the Trustee shall have received written notice thereof from the Company or a
holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Article VI of this Indenture, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 15.06 at least two
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (or premium, if any) or interest on any Debt Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any notice
to the contrary that may be received by it within two Business Days prior to
such date.

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

          SECTION 15.07. Rights of the Trustee, Holders of Senior Indebtedness.

                    The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article XV in respect of any Senior
Indebtedness at any time held by it, to the same extent as

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any other holder of Senior Indebtedness, and nothing in this Indenture or any
Additional Provisions shall deprive the Trustee of any of its rights as such
holder.

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

                    Nothing in this Article XV shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06.

          SECTION 15.08. Subordination May Not Be Impaired.

                    No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company, or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company, with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.

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

                    Wells Fargo Bank, National Association, in its capacity as
Trustee, hereby accepts the trusts in this Indenture declared and provided, upon
the terms and conditions herein above set forth.

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

 

 

 

 

 

 

Codorus Valley Bancorp, Inc.

 

 

 

 

By:

 

 

Name: 

 

 

Title: 

 

 

 

 

 

Wells Fargo Bank, National Association, as
Trustee

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

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EXHIBIT A

FORM OF JUNIOR SUBORDINATED DEBT SECURITY
DUE 2036

[FORM OF FACE OF SECURITY]

                    THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR
ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY
(A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO A “NON U.S. PERSON” IN
AN “OFFSHORE TRANSACTION” PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (D)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN “ACCREDITED INVESTOR,” FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

                    THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES,
REPRESENTS AND WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS
INVOLVING THIS SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE
SECURITIES ACT OR ANY APPLICABLE EXEMPTION THEREFROM.

A-1

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                    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 THIS SECURITY OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY 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 THIS SECURITY 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.

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

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

                    THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE
UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL
DEPOSIT INSURANCE CORPORATION (THE “FDIC”). THIS OBLIGATION IS SUBORDINATED TO
THE CLAIMS OF DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS

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INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES
AND IS NOT SECURED.

A-3

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Form of Junior Subordinated Debt Security due 2036

of

Codorus Valley Bancorp, Inc.

                    Codorus Valley Bancorp, Inc., a bank holding company
incorporated in Pennsylvania (the “Company”), for value received promises to pay
to Wells Fargo Bank, National Association, not in its individual capacity but
solely as Institutional Trustee for CVB Statutory Trust No. 2, a Delaware
statutory trust (the “Holder”), or registered assigns, the principal sum of
Seven Million Two Hundred Seventeen Thousand Dollars on July 7, 2036 and to pay
interest on said principal sum from June 28, 2006, or from the most recent
interest payment date (each such date, an “Interest Payment Date”) to which
interest has been paid or duly provided for, quarterly (subject to deferral as
set forth herein) in arrears on January 7, April 7, July 7 and October 7 of each
year commencing October 7, 2006, at a variable per annum rate equal to LIBOR (as
defined in the Indenture) plus 1.54% (the “Interest Rate”) (provided, however,
that the Interest Rate for any Interest Payment Period may not exceed the
highest rate permitted by New York law, as the same may be modified by United
States law of general applicability) until the principal hereof shall have
become due and payable, and on any overdue principal and (without duplication
and to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at an annual rate equal to the
Interest Rate in effect for each such Extension Period compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year and the actual number of days elapsed in the relevant
interest period. Notwithstanding anything to the contrary contained herein, if
any Interest Payment Date, other than on the Maturity Date, any Redemption Date
or the Special Redemption Date, falls on a day that is not a Business Day, then
any interest payable will be paid on, and such Interest Payment Date will be
moved to, the next succeeding Business Day, and additional interest will accrue
for each day that such payment is delayed as a result thereof. If the Maturity
Date, any Redemption Date or the Special Redemption Date falls on a day that is
not a Business Day, then the principal, premium, if any, and/or interest payable
on such date will be paid on the next succeeding Business Day, and no additional
interest will accrue in respect of such payment made on such next succeeding
Business Day (except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day). The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Debt Security (or one or more Predecessor Securities,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, except that interest and any
Deferred Interest payable on the Maturity Date shall be paid to the Person to
whom principal is paid. Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered holders
on such regular record date and may be paid to the Person in whose name this
Debt Security (or one or more Predecessor Debt Securities) is registered at the
close of business on a special record date to be fixed by the Trustee for the
payment of such defaulted interest, notice whereof shall be given to the
registered holders of the Debt Securities not less than 10 days prior to such
special record date, all as more fully provided in the Indenture. The principal
of and interest on this Debt Security shall be payable at the office or agency
of the Trustee (or other Paying Agent appointed by the Company) maintained for
that purpose in any coin or

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currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Debt Security Register
or by wire transfer of immediately available funds to an account appropriately
designated by the holder hereof. Notwithstanding the foregoing, so long as the
holder of this Debt Security is the Institutional Trustee, the payment of the
principal of and premium, if any, and interest on this Debt Security shall be
made in immediately available funds when due at such place and to such account
as may be designated by the Institutional Trustee. All payments in respect of
this Debt Security shall be payable in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debts.

                    Upon submission of Notice (as defined in the Indenture) and
so long as no Event of Default pursuant to paragraphs (c), (e), (f) or (g) of
Section 5.01 of the Indenture has occurred and is continuing, the Company shall
have the right, from time to time and without causing an Event of Default, to
defer payments of interest on the Debt Securities by extending the interest
distribution period on the Debt Securities at any time and from time to time
during the term of the Debt Securities, for up to 20 consecutive quarterly
periods (each such extended interest distribution period, an “Extension
Period”), during which Extension Period no interest shall be due and payable
(except any Additional Interest that may be due and payable). During any
Extension Period, interest will continue to accrue on the Debt Securities, and
interest on such accrued interest (such accrued interest and interest thereon
referred to herein as “Deferred Interest”) will accrue at an annual rate equal
to the Interest Rate applicable during such Extension Period, compounded
quarterly from the date such Deferred Interest would have been payable were it
not for the Extension Period, to the extent permitted by law. No Extension
Period may end on a date other than an Interest Payment Date. At the end of any
such Extension Period the Company shall pay all Deferred Interest then accrued
and unpaid on the Debt Securities; provided, however, that no Extension Period
may extend beyond the Maturity Date, Redemption Date (to the extent redeemed) or
Special Redemption Date; and provided, further, however, during any such
Extension Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s capital stock or (ii) make any payment of
principal of or premium, if any, or interest on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu in all respects with or
junior in interest to the Debt Securities or (iii) make any payment under any
guarantees of the Company that rank in all respects pari passu with or junior in
respect to the Capital Securities Guarantee (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company (A)
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, (B) in connection with a dividend reinvestment or
stockholder stock purchase plan or (C) in connection with the issuance of
capital stock of the Company (or securities convertible into or exercisable for
such capital stock), as consideration in an acquisition transaction entered into
prior to the applicable Extension Period, (b) as a result of any exchange,
reclassification, combination or conversion of any class or series of the
Company’s capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company’s capital stock or of any class or series
of the Company’s indebtedness for any class or series of the Company’s capital
stock, (c) the purchase of fractional interests in shares of the Company’s
capital stock pursuant to the conversion or exchange provisions of such

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capital stock or the security being converted or exchanged, (d) any declaration
of a dividend in connection with any stockholder’s rights plan, or the issuance
of rights, stock or other property under any stockholder’s rights plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock). Prior to the termination of any Extension Period, the
Company may further extend such period, provided, that such period together with
all such previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date, Redemption
Date (to the extent redeemed) or Special Redemption Date. Upon the termination
of any Extension Period and upon the payment of all Deferred Interest, the
Company may commence a new Extension Period, subject to the foregoing
requirements. No interest or Deferred Interest shall be due and payable during
an Extension Period, except at the end thereof, but Deferred Interest shall
accrue upon each installment of interest that would otherwise have been due and
payable during such Extension Period until such installment is paid. The Company
must give the Trustee notice of its election to begin or extend an Extension
Period (“Notice”) not later than the related regular record date for the
relevant Interest Payment Date. The Notice shall describe, in reasonable detail,
why the Company has elected to begin an Extension Period. The Notice shall
acknowledge and affirm the Company’s understanding that it is prohibited from
issuing dividends and other distributions during the Extension Period. Upon
receipt of the Notice, an Initial Purchaser shall have the right, at its sole
discretion, to disclose the name of the Company, the fact that the Company has
elected to begin an Extension Period and other information that such Initial
Purchaser, at its sole discretion, deems relevant to the Company’s election to
begin an Extension Period. The Trustee shall give notice of the Company’s
election to begin a new Extension Period to the Securityholders.

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

                    The Company waives diligence, presentment, demand for
payment, notice of nonpayment, notice of protest, and all other demands and
notices.

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

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

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

 

 

 

 

 

 

Codorus Valley Bancorp, Inc.

 

 

 

 

By:

 

 

Name: 

 

 

Title: 

 

Dated:__________________, 2006

CERTIFICATE OF AUTHENTICATION

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

 

 

 

 

Wells Fargo Bank, National Association, not in its individual capacity but
solely as the Trustee

 

 

 

 

By:

 

 

 

Authorized Officer

Dated:__________________, 2006

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[FORM OF REVERSE OF SECURITY]

                    This Debt Security is one of a duly authorized series of
Debt Securities of the Company, all issued or to be issued pursuant to an
Indenture (the “Indenture”), dated as of June 28, 2006, duly executed and
delivered between the Company and Wells Fargo Bank, National Association, as
Trustee (the “Trustee”), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Debt Securities (referred to herein as the “Debt
Securities”) of which this Debt Security is a part. The summary of the terms of
this Debt Security contained herein does not purport to be complete and is
qualified by reference to the Indenture.

                    Upon the occurrence and continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event (each a “Special Event”),
this Debt Security may become due and payable, in whole or in part, at any time,
within 90 days following the occurrence of such Tax Event, Investment Company
Event or Capital Treatment Event (the “Special Redemption Date”), as the case
may be, at the Special Redemption Price. In the event that the Special
Redemption Date falls on a day prior to the LIBOR Determination Date for any
Interest Payment Period, then the Company shall be required to pay to
Securityholders, on the Business Day following such LIBOR Determination Date,
any additional amount of interest that would have been payable on the Special
Redemption Date had the amount of interest determined on such LIBOR
Determination Date been known on the first day of such Interest Payment Period.
The Company shall also have the right to redeem this Debt Security at the option
of the Company, in whole or in part, on any January 7, April 7, July 7 or
October 7 on or after July 7, 2011 (a “Redemption Date”), at the Redemption
Price.

                    Any redemption pursuant to either of the two preceding
paragraphs will be made, subject to the receipt by the Company of prior approval
from any regulatory authority with jurisdiction over the Company if such
approval is then required under applicable capital guidelines or policies of
such regulatory authority, upon not less than 30 days’ nor more than 60 days’
notice. If the Debt Securities are only partially redeemed by the Company, the
Debt Securities will be redeemed pro rata or by lot or by any other method
utilized by the Trustee.

                    “Redemption Price” means 100% of the principal amount of the
Debt Securities being redeemed plus accrued and unpaid interest on such Debt
Securities to the Redemption Date or, in the case of a redemption due to the
occurrence of a Special Event, to the Special Redemption Date if such Special
Redemption Date is on or after July 7, 2010.

                    “Special Redemption Price” means, with respect to the
redemption of any Debt Security following a Special Event, an amount in cash
equal to 104% of the principal amount of Debt Securities to be redeemed prior to
July 7, 2007 and thereafter equal to the percentage of the principal amount of
the Debt Securities that is specified below for the Special Redemption Date
plus, in each case, unpaid interest accrued thereon to the Special Redemption
Date:

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Special Redemption During the
12-Month Period Beginning July 7

 

Percentage of Principal Amount

 

 

 

2007

 

103%

2008

 

102%

2009

 

101%

2010 and thereafter

 

100%

                    In the event of redemption of this Debt Security in part
only, a new Debt Security or Debt Securities for the unredeemed portion hereof
will be issued in the name of the holder hereof upon the cancellation hereof.

                    Upon the occurrence of an Event of Default pursuant to
paragraphs (c), (e), (f) or (g), of Section 5.01 of the Indenture, the principal
of all of the Debt Securities may be declared, and in certain cases shall ipso
facto become, due and payable, and upon such acceleration shall become due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.

                    The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debt Securities at the time outstanding
affected thereby, as specified in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders of the Debt
Securities; provided, however, that no such supplemental indenture shall, among
other things, without the consent of the holders of each Debt Security then
outstanding and affected thereby (i) change the Maturity Date of any Debt
Security, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or manner of calculation of the rate or extend the time of
payment of interest thereon, or reduce (other than as a result of the maturity
or earlier redemption of any such Debt Security in accordance with the terms of
the Indenture and such Debt Security) or increase the aggregate principal amount
of Debt Securities then outstanding, or change any of the redemption provisions,
or make the principal thereof or any interest or premium thereon payable in any
coin or currency other than that of the United States that at the time of
payment is legal tender for payment of public and private debts, or impair or
affect the right of any holder of Debt Securities to institute suit for the
payment thereof, or (ii) reduce the aforesaid percentage of Debt Securities, the
holders of which are required to consent to any such supplemental indenture. The
Indenture also contains provisions permitting the holders of a majority in
aggregate principal amount of the Debt Securities at the time outstanding, on
behalf of all of the holders of the Debt Securities, to waive any past default
in the performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture, and its consequences, except (a) a
default in payments due in respect of any of the Debt Securities, (b) in respect
of covenants or provisions of the Indenture which cannot be modified or amended
without the consent of the holder of each Debt Security affected, or (c) in
respect of the covenants of the Company relating to its ownership of Common
Securities of the Trust. Any such consent or waiver by the registered holder of
this Debt Security (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Debt Security and of any Debt Security issued in exchange herefor or in
place hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this Debt
Security.

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                    No reference herein to the Indenture and no provision of
this Debt Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay all payments due on
this Debt Security at the time and place and at the rate and in the money herein
prescribed.

                    As provided in the Indenture and subject to certain
limitations herein and therein set forth, this Debt Security is transferable by
the registered holder hereof on the Debt Security Register of the Company, upon
surrender of this Debt Security for registration of transfer at the office or
agency of the Trustee in Wilmington, Delaware accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered holder hereof or such holder’s attorney
duly authorized in writing, and thereupon one or more new Debt Securities of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
made for any such registration of transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.

                    Prior to due presentment for registration of transfer of
this Debt Security, the Company, the Trustee, any Authenticating Agent, any
Paying Agent, any transfer agent and the Debt Security Registrar may deem and
treat the registered holder hereof as the absolute owner hereof (whether or not
this Debt Security shall be overdue and notwithstanding any notice of ownership
or writing hereon) for the purpose of receiving payment of the principal of and
premium, if any, and interest on this Debt Security and for all other purposes,
and neither the Company nor the Trustee nor any Authenticating Agent nor any
Paying Agent nor any transfer agent nor any Debt Security Registrar shall be
affected by any notice to the contrary.

                    No recourse shall be had for the payment of the principal of
or the interest on this Debt Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.

                    The Debt Securities are issuable only in registered
certificated form without coupons. As provided in the Indenture and subject to
certain limitations herein and therein set forth, Debt Securities are
exchangeable for a like aggregate principal amount of Debt Securities of a
different authorized denomination, as requested by the holder surrendering the
same.

                    All terms used in this Debt Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                    THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE DEBT SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF
(OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

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