Exhibit
      4.12
            Execution
      Copy











PMA
CAPITAL CORPORATION,


as
Issuer











INDENTURE


Dated
as of June 21, 2007











WILMINGTON
TRUST COMPANY,


as
Trustee














FLOATING
RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES





DUE
2037


























TABLE OF
CONTENTS








Page








ARTICLE
      I.
            DEFINITIONS
            1





Section
      1.1.
            Definitions
            1





ARTICLE
      II.
            DEBENTURES
            7





Section
      2.1.
            Authentication
      and Dating
            7Section
      2.2.
            Form
      of Trustee’s Certificate of Authentication
            8Section
      2.3.
            Form
      and Denomination of Debentures
            8Section
      2.4.
            Execution
      of Debentures
            8Section
      2.5.
            Exchange
      and Registration of Transfer of Debentures.
            9Section
      2.6.
            Mutilated,
      Destroyed, Lost or Stolen Debentures
            11Section
      2.7.
            Temporary
      Debentures
            12Section
      2.8.
            Payment
      of Interest and Additional Interest
            13Section
      2.9.
            Cancellation
      of Debentures Paid, etc
            14Section
      2.10.
            Computation
      of Interest
            14Section
      2.11.
            Extension
      of Interest Payment Period
            16Section
      2.12.
            CUSIP
      Numbers
            17





ARTICLE
      III.
            PARTICULAR
      COVENANTS OF THE COMPANY
            18





Section
      3.1.
            Payment
      of Principal, Premium and Interest; Agreed Treatment of the
      Debentures.
            18Section
      3.2.
            Offices
      for Notices and Payments, etc
            19Section
      3.3.
            Appointments
      to Fill Vacancies in Trustee’s Office
            19Section
      3.4.
            Provision
      as to Paying Agent.
            19Section
      3.5.
            Certificate
      to Trustee
            20Section
      3.6.
            Additional
      Sums
            20Section
      3.7.
            Compliance
      with Consolidation Provisions
            21Section
      3.8.
            Limitation
      on Dividends
            21Section
      3.9.
            Covenants
      as to the Trust
            22Section
      3.10.
            Additional
      Junior Indebtedness
            22





ARTICLE
      IV.
            SECURITYHOLDERS
      LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
            22





Section
      4.1.
            Securityholders
      Lists
            22Section
      4.2.
            Preservation
      and Disclosure of Lists.
            23





ARTICLE
      V.
            REMEDIES
      OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
DEFAULT
            24





Section
      5.1.
            Events
      of Default
            24Section
      5.2.
            Payment
      of Debentures on Default; Suit Therefor
            26Section
      5.3.
            Application
      of Moneys Collected by Trustee
            27




i




Section
      5.4.
            Proceedings
      by Securityholders
            28Section
      5.5.
            Proceedings
      by Trustee
            28Section
      5.6.
            Remedies
      Cumulative and Continuing; Delay or Omission Not a Waiver
            29Section
      5.7.
            Direction
      of Proceedings and Waiver of Defaults by Majority of
      Securityholders
            29Section
      5.8.
            Notice
      of Defaults
            30Section
      5.9.
            Undertaking
      to Pay Costs
            30





ARTICLE
      VI.
            CONCERNING
      THE TRUSTEE
            30





Section
      6.1.
            Duties
      and Responsibilities of Trustee
            30Section
      6.2.
            Reliance
      on Documents, Opinions, etc
            31Section
      6.3.
            No
      Responsibility for Recitals, etc
            32Section
      6.4.
            Trustee,
      Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own
      Debentures
            33Section
      6.5.
            Moneys
      to be Held in Trust
            33Section
      6.6.
            Compensation
      and Expenses of Trustee
            33Section
      6.7.
            Officers’
      Certificate as Evidence
            34Section
      6.8.
            Eligibility
      of Trustee
            34Section
      6.9.
            Resignation
      or Removal of Trustee.
            35Section
      6.10.
            Acceptance
      by Successor Trustee
            36Section
      6.11.
            Succession
      by Merger, etc
            37Section
      6.12.
            Authenticating
      Agents
            37





ARTICLE
      VII.
            CONCERNING
      THE SECURITYHOLDERS
            38





Section
      7.1.
            Action
      by Securityholders
            38Section
      7.2.
            Proof
      of Execution by Securityholders
            39Section
      7.3.
            Who
      Are Deemed Absolute Owners
            39Section
      7.4.
            Debentures
      Owned by Company Deemed Not Outstanding
            39Section
      7.5.
            Revocation
      of Consents; Future Holders Bound
            40





ARTICLE
      VIII.
            SECURITYHOLDERS
      MEETINGS
            40





Section
      8.1.
            Purposes
      of Meetings
            40Section
      8.2.
            Call
      of Meetings by Trustee
            40Section
      8.3.
            Call
      of Meetings by Company or Securityholders
            41Section
      8.4.
            Qualifications
      for Voting
            41Section
      8.5.
            Regulations
            41Section
      8.6.
            Voting
            41Section
      8.7.
            Quorum;
      Actions
            42




ARTICLE
      IX.
            SUPPLEMENTAL
      INDENTURES
            43





Section
      9.1.
            Supplemental
      Indentures without Consent of Securityholders
            43Section
      9.2.
            Supplemental
      Indentures with Consent of Securityholders
            44Section
      9.3.
            Effect
      of Supplemental Indentures
            45Section
      9.4.
            Notation
      on Debentures
            45




ii




Section
      9.5.
            Evidence
      of Compliance of Supplemental Indenture to be Furnished to
      Trustee
            45





ARTICLE
      X.
            REDEMPTION
      OF SECURITIES
            45





Section
      10.1.
            Optional
      Redemption
            45Section
      10.2.
            Special
      Event Redemption
            46Section
      10.3.
            Notice
      of Redemption; Selection of Debentures
            46Section
      10.4.
            Payment
      of Debentures Called for Redemption
            47





ARTICLE
      XI.
            CONSOLIDATION,
      MERGER, SALE, CONVEYANCE AND LEASE
            47Section
      11.1.
            Company
      May Consolidate, etc., on Certain Terms
            47Section
      11.2.
            Successor
      Entity to be Substituted
            47Section
      11.3.
            Opinion
      of Counsel to be Given to Trustee
            48





ARTICLE
      XII.
            SATISFACTION
      AND DISCHARGE OF INDENTURE
            48





Section
      12.1.
            Discharge
      of Indenture.
            48Section
      12.2.
            Deposited
      Moneys to be Held in Trust by Trustee
            49Section
      12.3.
            Paying
      Agent to Repay Moneys Held
            49Section
      12.4.
            Return
      of Unclaimed Moneys
            49





ARTICLE
      XIII.
            IMMUNITY
      OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
            49




Section
      13.1.
            Indenture
      and Debentures Solely Corporate Obligations
            49





ARTICLE
      XIV.
            MISCELLANEOUS
      PROVISIONS
            50





Section
      14.1.
            Successors
            50Section
      14.2.
            Official
      Acts by Successor Entity
            50Section
      14.3.
            Surrender
      of Company Powers
            50Section
      14.4.
            Addresses
      for Notices, etc
            50Section
      14.5.
            Governing
      Law
            50Section
      14.6.
            Evidence
      of Compliance with Conditions Precedent
            51Section
      14.7.
            Table
      of Contents, Headings, etc
            51Section
      14.8.
            Execution
      in Counterparts
            51Section
      14.9.
            Severability
            51Section
      14.10.
            Assignment
            51Section
      14.11.
            Acknowledgment
      of Rights
            51





ARTICLE
      XV.
            SUBORDINATION
      OF DEBENTURES
            52





Section
      15.1.
            Agreement
      to Subordinate
            52Section
      15.2.
            Default
      on Senior Indebtedness
            52Section
      15.3.
            Liquidation,
      Dissolution, Bankruptcy
            53Section
      15.4.
            Subrogation
            54Section
      15.5.
            Trustee
      to Effectuate Subordination
            55Section
      15.6.
            Notice
      by the Company
            55




iii




Section
      15.7.
            Rights
      of the Trustee; Holders of Senior Indebtedness
            55Section
      15.8.
            Subordination
      May Not Be Impaired
            56








Exhibit
A                      Form
of Floating Rate Junior Subordinated Deferrable Interest Debenture





iv





THIS
INDENTURE, dated as of June 21, 2007, between PMA Capital Corporation, a
Pennsylvania corporation (the “Company”), and
Wilmington Trust Company, a banking corporation organized under the laws of the
State of Delaware, as debenture trustee (the “Trustee”).




WITNESSETH:




WHEREAS,
for its lawful corporate purposes, the Company has duly authorized the issuance
of its Floating Rate Junior Subordinated Deferrable Interest Debentures due 2037
(the “Debentures”) under
this Indenture to provide, among other things, for the execution and
authentication, delivery and administration thereof, and the Company has duly
authorized the execution of this Indenture; and




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




NOW,
THEREFORE, in consideration of the premises, and the purchase of the Debentures
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 Debentures as follows:




ARTICLE
I.


DEFINITIONS




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




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




“Additional Junior
Indebtedness” means, without duplication and other than the Debentures,
(a) any indebtedness, liabilities or obligations of the Company, or any
Subsidiary of the Company, under debt securities (or guarantees in respect of
debt securities) initially issued on or after the date of this Indenture to any
trust, or a trustee of a trust, partnership or other entity that is, directly or
indirectly, a finance subsidiary (as such term is defined in Rule 3a-5 under the
Investment Company Act of 1940) or other financing vehicle of the Company or any
Subsidiary of the Company in connection with the issuance by that entity of
preferred securities, (b) other securities that are issued either junior and
subordinate to or on a pari
passu basis with the Debentures or (c) any guarantees of the Company
in respect of the equity or other securities of any entity referred to in clause
(a).




“Additional Sums” has
the meaning set forth in Section 3.6.




1




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




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




“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 New York City or Wilmington, Delaware are permitted or required
by any applicable law to close.




“Capital Securities”
means undivided beneficial interests in the assets of the Trust which rank pari passu with Common Securities
issued by the Trust; provided, however, that upon
the occurrence and during the continuation of an Event of Default (as defined in
the Declaration), 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 enters into
with Wilmington Trust Company, as guarantee trustee, or other Persons that
operates directly or indirectly for the benefit of holders of Capital Securities
of the Trust.




“Capital Stock” means
any and all shares, interests, rights to purchase, warrants, options,
participations or interests in (however designated) equity of such Person,
including without limitation any common stock, preferred stock and Trust
Preferred Securities.




“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 rank pari passu with Capital
Securities issued by the Trust; provided, however, that upon
the occurrence and during the continuation of an Event of Default (as defined in
the Declaration), 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 PMA
Capital Corporation, a Pennsylvania corporation, and, subject to the provisions
of Article XI, shall include its successors and assigns.




2




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




“Debenture” or “Debentures” has the
meaning stated in the first recital of this Indenture.




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




“Declaration” means
the Amended and Restated Declaration of Trust of the Trust, 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 2.8.




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




“Distribution Period”
means (i) with respect to the first Interest Payment Date, the period beginning
on (and including) the date of original issuance and ending on (but excluding)
the Interest Payment Date in September 2007 and (ii) thereafter, with respect to
each Interest Payment Date, the period beginning on (and including) the
preceding Interest Payment Date and ending on (but excluding) such current
Interest Payment Date.




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




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




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




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




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




“Interest Payment
Date” means each March 15, June 15, September 15 and December 15 of each
year during the term of this Indenture, or if any such day is not a Business
Day, then the next succeeding Business Day, commencing in September
2007.




“Interest Rate” means
for the period beginning on (and including) the date of original issuance and
ending on (but excluding) the Interest Payment Date in September 2007 the rate
per annum of 8.91% and for each Distribution Period thereafter, the Coupon
Rate.




“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 the
occurrence of a change in law or regulation or written change (including any
announced prospective 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




3




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 issuance of the
Debentures.




“Liquidation Amount”
means the stated amount of $1,000.00 per Trust Security.




“Maturity Date” means
June 15, 2037.




“Officers’
Certificate” means a certificate signed by the Chief Executive Officer,
the Vice Chairman, the President, or any Vice President, and by the Chief
Financial Officer, the Treasurer, an Assistant Treasurer, 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 14.6 if and to the extent required by the provisions of such
Section.




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




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




“Optional Redemption
Price” means 100% of the principal amount of the Debentures being
redeemed, plus accrued and unpaid interest (including any Additional Interest)
on such Debentures to the Optional Redemption Date.




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




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




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




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




4




“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.




“Pooled Companies”
means Pennsylvania Manufacturers’ Association Insurance Company, Manufacturers
Alliance Insurance Company and Pennsylvania Manufacturers Indemnity Company,
collectively.




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




“Principal Office of the
Trustee,” or other similar term, means the office of the Trustee, at
which at any particular time its corporate trust business shall be principally
administered, which at the time of the execution of this Indenture shall be 1100
North Market Street, Wilmington, Delaware 19890-1600, Attention: Corporate Trust
Administration.




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




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




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




“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; (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 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




5




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.  Notwithstanding the foregoing, “Senior Indebtedness” shall
not include (1) any Additional Junior Indebtedness, (2) Debentures
issued pursuant to this Indenture and guarantees in respect of such Debentures,
(3) trade accounts payable of the Company arising in the ordinary course of
business (such trade accounts payable being pari passu in right of
payment to the Debentures), or (4) obligations with respect to which (a) in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are pari passu, junior or
otherwise not superior in right of payment to the Debentures and (b) the
Company, prior to the issuance thereof, has, if required, notified the relevant
state insurance regulatory agency.  Senior Indebtedness shall continue
to be Senior Indebtedness and be entitled to the subordination provisions
irrespective of any amendment, modification or waiver of any term of such Senior
Indebtedness.




“Special Event” means
either of an Investment Company Event or a Tax Event.




“Special Redemption
Date” has the meaning set forth in Section 10.2.




“Special Redemption
Price” means (i) 107.5% of the principal amount of the Debentures
being redeemed on a Special Redemption Date that occurs before the Interest
Payment Date in June, 2012 and (ii) 100% of the principal amount of the
Debentures being redeemed on a Special Redemption Date that occurs on or after
the Interest Payment Date in June, 2012, plus accrued and unpaid interest
(including any Additional Interest) on such Debentures to the Special Redemption
Date.




“Subsidiary” means
with respect to any Person, (i) any corporation or limited liability
company 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
(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, field service
advice, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (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




6




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 Debentures, 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 Debentures; (ii) interest payable by
the Company on the Debentures 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 more than a de
minimis amount of other taxes (excluding withholding taxes), duties or other
governmental charges.




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




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




“Trust” shall mean PMA
Capital Statutory Trust VII, a Delaware statutory trust, or any other
similar trust created for the purpose of issuing Capital Securities in
connection with the issuance of Debentures under this Indenture, of which the
Company is the sponsor.




“Trust Preferred
Securities” means any preferred securities issued by an entity that is,
directly or indirectly, a finance subsidiary (as such term is defined in Rule
3a-5 under the Investment Company Act of 1940) or other financing vehicle of the
Company or any Subsidiary of the Company.




“Trustee” means
Wilmington Trust Company, and, subject to the provisions of Article VI
hereof, shall also include its successors and assigns as Trustee
hereunder.




“Trust Securities”
means Common Securities and Capital Securities of the Trust.




ARTICLE
II.


DEBENTURES




Section 2.1.Authentication
and Dating.  Upon the execution and delivery of this Indenture,
or from time to time thereafter, Debentures in an aggregate principal amount not
in excess of $20,619,000.00 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 Debentures to or upon the written order of the
Company, signed by its Chief Executive Officer, the President, or one of its
Vice Presidents without any further action by the Company
hereunder.  In authenticating such Debentures, and accepting the
additional responsibilities under this Indenture in relation to such Debentures,
the Trustee shall be entitled to receive, and (subject to Section 6.1)
shall be fully protected in relying upon:




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




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




7




(1)           that
such Debentures, when authenticated and delivered by the Trustee and issued by
the Company in each case in the manner and subject to any conditions specified
in such Opinion of Counsel, will have been duly authorized, executed and
delivered by the Company, will be entitled to the benefits of this Indenture and
will be legal, valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws affecting
the rights and remedies of creditors generally and of general principles of
equity; and




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




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




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




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




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




WILMINGTON
TRUST COMPANY, as Trustee




By


Authorized
Signer




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




Section 2.4.Execution
of Debentures.  The Debentures shall be signed in the name and
on behalf of the Company by the manual or facsimile signature of its Chief
Executive Officer, President, or one of its Executive Vice Presidents, Senior
Vice Presidents or Vice Presidents.  Only such Debentures as shall
bear thereon a certificate of authentication




8




substantially
in the form herein before recited, executed by the Trustee or the Authenticating
Agent by the manual signature of an authorized signer, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any
purpose.  Such certificate by the Trustee or the Authenticating Agent
upon any Debenture executed by the Company shall be conclusive evidence that the
Debenture so authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this Indenture.




In case
any officer of the Company who shall have signed any of the Debentures shall
cease to be such officer before the Debentures so signed shall have been
authenticated and delivered by the Trustee or the Authenticating Agent, or
disposed of by the Company, such Debentures nevertheless may be authenticated
and delivered or disposed of as though the Person who signed such Debentures had
not ceased to be such officer of the Company; and any Debenture may be signed on
behalf of the Company by such Persons as, at the actual date of the execution of
such Debenture, 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
Debenture shall be dated the date of its authentication.




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




Debentures
to be exchanged may be surrendered at the Principal Office of the Trustee or at
any office or agency to be maintained by the Company for such purpose as
provided in Section 3.2, 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 Debenture
or Debentures which the Securityholder making the exchange shall be entitled to
receive.  Upon due presentment for registration of transfer of any
Debenture at the Principal Office of the Trustee or at any office or agency of
the Company maintained for such purpose as provided in Section 3.2, 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 Debenture for a like
aggregate principal amount.  Registration or registration of transfer
of any Debenture by the Trustee or by any agent of the Company appointed
pursuant to Section 3.2, and delivery of such Debenture, shall be deemed to
complete the registration or registration of transfer of such
Debenture.




All
Debentures 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 the Trustee or the
Authenticating Agent duly executed by the holder or his attorney duly authorized
in writing.




9




No
service charge shall be made for any exchange or registration of transfer of
Debentures, 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 Debenture for a period of 15 days next preceding the date of
selection of Debentures for redemption.




Notwithstanding
anything herein to the contrary, Debentures may not be transferred except in
compliance with the restricted securities legend set forth below, unless
otherwise determined by the Company, upon the advice of counsel expert in
securities law, in accordance with applicable law:




THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW.  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 AND ANY APPLICABLE STATE SECURITIES
LAWS.  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO A
NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR
RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF
SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY.




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




10




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 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.




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




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




THIS
SECURITY IS IN REGISTERED FORM WITHIN THE MEANING OF TREASURY REGULATIONS
SECTION 1.871-14(c)(1)(i) FOR U.S. FEDERAL INCOME AND WITHHOLDING TAX
PURPOSES.




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




Section 2.6.Mutilated,
Destroyed, Lost or Stolen Debentures.  In case any Debenture
shall become mutilated or be destroyed, lost or stolen, the Company shall
execute, and upon its written request the Trustee shall
authenticate and deliver, a new Debenture bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or
stolen.  In every case the applicant for a substituted Debenture shall
furnish to the Company and the Trustee




11




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 Debenture and of the ownership
thereof.




The
Trustee may authenticate any such substituted Debenture and deliver the same
upon the written request or authorization of any officer of the
Company.  Upon the issuance of any substituted Debenture, 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 Debenture which has matured
or is about to mature or has been called for redemption in full shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Debenture, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debenture) if the applicant
for such payment shall furnish to the 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 Debenture and of the ownership
thereof.




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




Section 2.7.Temporary
Debentures.  Pending the preparation of definitive Debentures,
the Company may execute and the Trustee shall authenticate and make available
for delivery temporary Debentures that are typed, printed or
lithographed.  Temporary Debentures shall be issuable in any
authorized denomination, and substantially in the form of the definitive
Debentures in lieu of which they are issued but with such omissions, insertions
and variations as may be appropriate for temporary Debentures, all as may be
determined by the Company.  Every such temporary Debenture 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 Debentures.  Without unreasonable delay the Company
will execute and deliver to the Trustee or the Authenticating Agent definitive
Debentures and thereupon any or all temporary Debentures may be surrendered in
exchange therefor, at the principal corporate trust office of the Trustee or at
any office or agency maintained by the Company for such purpose as provided in
Section 3.2, and the Trustee or the Authenticating Agent shall authenticate
and make available for delivery in exchange for such temporary Debentures a like
aggregate principal amount of such definitive Debentures.  Such
exchange shall be made by the 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,




12




fee or
other governmental charge that may be imposed in relation
thereto.  Until so exchanged, the temporary Debentures shall in all
respects be entitled to the same benefits under this Indenture as definitive
Debentures authenticated and delivered hereunder.




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




Each
Debenture shall bear interest for the period beginning on (and including) the
date of original issuance and ending on (but excluding) the Interest Payment
Date in September 2007 at a rate per annum of 8.91%, and shall bear interest for
each successive period beginning on or after the Interest Payment Date in
September 2007 at a rate per annum equal to the 3-Month LIBOR, determined as
described in Section 2.10, plus 3.55% (the “Coupon Rate”),
applied to the principal amount thereof, until the principal thereof becomes due
and payable, and on any overdue principal and to the extent that payment of such
interest is enforceable under applicable law (without duplication) on any
overdue installment of interest (including Additional Interest) at the Interest
Rate in effect for each applicable period compounded
quarterly.  Interest shall be payable (subject to any relevant
Extension Period) quarterly in arrears on each Interest Payment Date with the
first installment of interest to be paid on the Interest Payment Date in
September 2007.




Any
interest on any Debenture, including Additional Interest, that is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called “Defaulted Interest”)
shall forthwith cease to be payable to the registered holder on the relevant
regular record date by virtue of having been such holder; and such Defaulted
Interest shall be paid by the Company to the Persons in whose names such
Debentures (or their respective Predecessor Securities) are registered at the
close of business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company shall notify
the Trustee in writing at least 25 days prior to the date of the proposed
payment of the amount of Defaulted Interest proposed to be paid on each such
Debenture and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided.  Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest which shall not be more than 15 nor less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed
payment.  The Trustee shall promptly notify the 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 its address as it appears in the Debenture Register, not less
than 10 days prior to such special record date.  Notice of the
proposed payment of such Defaulted Interest and the special record date therefor
having




13




been
mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Debentures (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer
payable.




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




Any
interest (including Additional 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 Debentures.




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




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




Section 2.9. Cancellation
of Debentures Paid, etc.  All
Debentures surrendered for the purpose of payment, redemption, exchange or
registration of transfer, shall, if surrendered to the 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 Debentures shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture.  All
Debentures canceled by any Authenticating Agent shall be delivered to the
Trustee.  The Trustee shall destroy all canceled Debentures unless the
Company otherwise directs the Trustee in writing.  If the Company
shall acquire any of the Debentures, however, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such
Debentures unless and until the same are surrendered to the Trustee for
cancellation.




Section 2.10.Computation
of Interest.  The amount of interest payable for the
Distribution Period commencing on the Interest Payment Date in September 2007
and each succeeding Distribution Period will be calculated by applying the
Interest Rate to the principal amount outstanding at the commencement of the
Distribution Period and multiplying each such amount by the actual number of
days in the Distribution Period concerned divided by 360.  All
percentages resulting from any calculations on the Debentures will be rounded,
if necessary, to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or
..09876545) being rounded to 9.87655% (or .0987655), and all dollar amounts used
in or resulting from such calculation will be rounded to the nearest cent (with
one-half cent being rounded upward)).




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




14




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




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




(3)           if
fewer than two such quotations are provided as requested in clause (2)
above, the Trustee will request four major New York City banks to provide such
banks’ offered quotations (expressed as percentages per annum) to leading
European banks for loans in U.S. dollars as of 11:00 a.m. (London time) on
such Determination Date.  If at least two such quotations are
provided, 3-Month LIBOR will be the arithmetic mean of such quotations;
and




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




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




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




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




(d)           The
Trustee shall notify the Company, the Institutional Trustee and any securities
exchange or interdealer quotation system on which the Capital Securities are
listed, of the Coupon Rate and the Determination Date for each Distribution
Period, in each case as soon as practicable after the determination thereof but
in no event later than the thirtieth (30th) day of the




15




relevant
Distribution Period.  Failure to notify the Company, the Institutional
Trustee or any securities exchange or interdealer quotation system, or any
defect in said notice, shall not affect the obligation of the Company to make
payment on the Debentures at the applicable Coupon Rate.  Any error in
the calculation of the Coupon Rate by the Trustee may be corrected at any time
by notice delivered as above provided.  Upon the request of a holder
of a Debenture, the Trustee shall provide the Coupon Rate then in effect and, if
determined, the Coupon Rate for the next Distribution Period.




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




Section 2.11.Extension
of Interest Payment Period.  So long as no Event of Default 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
Debentures by extending the interest payment period on the Debentures at any
time and from time to time during the term of the Debentures, for up to
20 consecutive quarterly periods (each such extended interest payment
period, an “Extension
Period”), during which Extension Period no interest (including Additional
Interest) shall be due and payable (except any Additional Sums that may be due
and payable).  No Extension Period may end on a date other than an
Interest Payment Date.  During an Extension Period, interest will
continue to accrue on the Debentures, and interest on such accrued interest will
accrue at an annual rate equal to the Interest Rate in effect for such Extension
Period, compounded quarterly from the date such interest would have been payable
were it not for the Extension Period, to the extent permitted by law (such
interest referred to herein as “Additional
Interest”).  At the end of any such Extension Period the
Company shall pay all interest then accrued and unpaid on the Debentures
(together with Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date; provided further, however, that during
any such Extension Period, the Company shall not, and shall not permit any
Affiliate of the Company controlled by the Company (including, without
limitation, any entity issuing Trust Preferred Securities) to, (i) declare
or pay any dividends or distributions on, or repay, repurchase, redeem, acquire,
or make a liquidation payment with respect to, any of the Company's or such
Affiliates' common stock or preferred stock (other than payments of dividends or
distributions to the Company or a Subsidiary of the Company) or make any
guarantee payments with respect to the foregoing, (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities or other debt obligations of the Company or any Affiliate of
the Company controlled by the Company that rank pari passu in all
respects with or junior in interest to the Debentures or (iii) enter into, amend
or modify any contract with a shareholder that directly or indirectly
beneficially owns (as determined under Rule 13d-3 of the Exchange Act and which
shall include securities beneficially owned by (a) all controlled Affiliates of
such shareholder and (b) all other Persons with whom such shareholder would
constitute a “group” within the meaning of Section 13(d) of the




16




Exchange
Act and the rules promulgated thereunder) more than 10% of the outstanding
shares of common stock of the Company (other than, with respect to
clauses (i) and (ii) above, (a) repurchases, redemptions or other
acquisitions of shares of Capital Stock of the Company or any Subsidiary of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of Capital
Stock of the Company or of such Subsidiary (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 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 in the case of a Subsidiary
of the Company, any class or series of such Subsidiary’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 (or in the case of indebtedness of a Subsidiary of the
Company, of any class or series of such Subsidiary’s indebtedness for any class
or series of such Subsidiary’s Capital Stock), (c) the purchase of
fractional interests in shares of the Company’s Capital Stock (or the Capital
Stock of a Subsidiary of the Company) 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 stockholders’
rights plan, or the issuance of rights, stock or other property under any
stockholders’ rights plan, or the redemption or repurchase of rights pursuant
thereto, (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 and any cash payments in lieu of fractional shares issued in
connection therewith, or (f) payments under the Capital Securities
Guarantee).  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.  Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and Additional Interest, the Company
may commence a new Extension Period, subject to the foregoing
requirements.  No interest or Additional Interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during an
Extension Period shall bear Additional Interest to the extent permitted by
applicable law.  The Company must give the Trustee notice of its
election to begin or extend an Extension Period at least 5 Business Days prior
to the regular record date (as such term is used in Section 2.8) immediately
preceding the Interest Payment Date with respect to which interest on the
Debentures would have been payable except for the election to begin or extend 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 Debentures may use “CUSIP”
numbers (if then generally in use), and, if so, the Trustee shall use CUSIP
numbers in notices of redemption as a convenience to Securityholders; provided, however, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Debentures or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such




17




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 numbers.




Section 2.13.Ranking.  The
Company’s obligations in respect of the Debentures shall rank pari passu with
the Company’s obligations under the Indenture dated as of May 15, 2003, in
respect of the Company’s Floating Rate Junior Subordinated Deferrable Interest
Debentures due 2033 issued thereunder and under the Guarantee Agreement by and
between the Company and U.S. Bank National Association, dated as of May 15,
2003.




ARTICLE
III.


PARTICULAR COVENANTS OF THE
COMPANY




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




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




(b)           The
Company will treat the Debentures as indebtedness of the Company that is in
registered form within the meaning of Treasury Regulations Section
1.871-14(c)(1)(i).  The Company will further treat the amounts payable
in respect of the principal amount of such Debentures as interest for all United
States federal income and withholding tax purposes.  All interest
payments in respect of such Debentures will be made free and clear of United
States withholding tax to any beneficial owner thereof that has provided an
Internal Revenue Service Form W-8BEN (or any substitute or successor form)
establishing its non-United States status for United States federal income and
withholding tax purposes.




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




(d)           As
of the date of this Indenture, the Company believes that the likelihood that it
would exercise its right under Section 2.11 to
defer payments of interest on the Debentures by commencing an Extension Period
at any time during which the Debentures 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




18




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 Debentures.




Section 3.2.Offices
for Notices and Payments, etc.So long as any of the
Debentures remain outstanding, the Company will maintain in Wilmington,
Delaware, an office or agency where the Debentures may be presented for payment,
an office or agency where the Debentures may be presented for registration of
transfer and for exchange as in this Indenture provided and an office or agency
where notices and demands to or upon the Company in respect of the Debentures 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 2.5, such office or agency for all of the
above purposes shall be the office or agency 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, where
the Debentures 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 3.3.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 6.9, a Trustee, so that there shall at all
times be a Trustee hereunder.




Section 3.4.Provision
as to Paying Agent.




(a)           If
the 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 3.4,




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




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




19




(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 principal of and premium, if any, or interest or other payments, if
any, on the Debentures, set aside, segregate and hold in trust for the benefit
of the holders of the Debentures a sum sufficient to pay such principal,
premium, interest or other 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 Debentures) to make any payment of the
principal of and premium, if any, or interest or other payments, if any, on the
Debentures when the same shall become due and payable.




Whenever
the Company shall have one or more paying agents for the Debentures, it will, on
or prior to each due date of the principal of and premium, if any, or interest,
if any, on the Debentures, deposit with a paying agent a sum sufficient to pay
the principal, premium, interest or other 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 3.4 to the contrary notwithstanding, the Company may, at
any time, for the purpose of obtaining a satisfaction and discharge with respect
to the Debentures, or for any other reason, pay, or direct any paying agent to
pay to the Trustee all sums held in trust by the Company or any such paying
agent, such sums to be held by the Trustee upon the trusts herein
contained.




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




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




Section 3.6.Additional
Sums.  If and for so long as the Trust or a trustee of the
Trust is the holder of all Debentures and the Trust is required to pay any
additional taxes (excluding withholding taxes), duties, assessments or other
governmental charges as a result of a Tax Event, then the Company will pay such
additional amounts (“Additional Sums”) on
the Debentures as shall be required so that the net amounts received and
retained by the Trust after paying such taxes (excluding withholding taxes),
duties, assessments or other governmental charges will be equal to the amounts
the Trust would have received if no such taxes (excluding withholding taxes),
duties, assessments or other governmental charges had been
imposed.  Whenever in this Indenture or the Debentures there is a
reference in any context to the payment of principal of or interest on the
Debentures, such mention shall be deemed to include mention of payments of the




20




Additional
Sums provided for in this paragraph to the extent that, in such context,
Additional Sums are, were or would be payable in respect thereof pursuant to the
provisions of this paragraph and express mention of the payment of Additional
Sums (if applicable) in any provisions hereof shall not be construed as
excluding Additional Sums in those provisions hereof where such express mention
is not made; provided, however, that the
deferral of the payment of interest during an Extension Period pursuant to
Section 2.11 shall not defer the payment of any Additional Sums that may be
due and payable.




Section 3.7.Compliance
with Consolidation Provisions.  The Company will not, while any
of the Debentures remain outstanding, consolidate with, or merge into any other
Person, or sell, convey, transfer or otherwise dispose of, directly or
indirectly through its subsidiaries, in a single transaction or in any series of
transactions occurring during any twelve-month period, more than 51% of its
assets, unless in each case of a consolidation, merger, sale, conveyance,
transfer or other disposition of assets, the provisions of Article XI
hereof are complied with.




Section 3.8.Limitation
on Dividends.  If Debentures 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 Debentures continue to be held by such
Trust) and (i) there shall have occurred and be continuing an Event of
Default; (ii) the dollar amount of the Company’s premium volume from insurance
policies in any calendar year fails to exceed 51% of the Company’s premium
volume from insurance policies in the previous calendar year; (iii) the Company
sells more than 51% of its rights to renew insurance policies in any single
transaction or series of related transactions; (iv) the Pooled Companies or any
entity which becomes a significant subsidiary (as defined in
Section 1-02(w) of Regulation S-X to the Securities Act) of the Company
which is rated by A.M. Best Company, Inc. (x) receives a rating from A.M. Best
Company Inc. of B- or lower; or (y) submits a request to withdraw its rating by
A.M.Best Company, Inc.; (v) the Company shall be in default with respect to
its payment of any obligations under the Capital Securities Guarantee; or
(vi) the Company shall have given notice of its election to defer payments
of interest on the Debentures by extending the interest payment period as
provided herein and such period, or any extension thereof, shall be continuing,
then the Company shall not, and shall not permit any Affiliate of the Company
controlled by the Company (including, without limitation, any entity issuing
Trust Preferred Securities) to, (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s or such Affiliates’ Capital Stock (other
than payments of dividends or distributions to the Company or a Subsidiary of
the Company) or make any guarantee payments with respect to the foregoing;
(y) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities or other debt obligations of the
Company or any Affiliate of the Company controlled by the Company that rank
pari passu in all
respects with or junior in interest to the Debentures; or (z) enter into, amend
or modify any contract with a shareholder that directly or indirectly
beneficially owns (as determined under Rule 13d-3 of the Exchange Act and which
shall include securities beneficially owned by (i) all controlled Affiliates of
such shareholder and (ii) all other Persons with whom such shareholder would
constitute a “group” within the meaning of Section 13(d) of the Exchange Act and
the rules promulgated thereunder) more than 10% of the outstanding shares of
common stock of the Company (other than, with respect to clauses (x) and (y)
above, (1) repurchases, redemptions or other acquisitions of shares of
Capital Stock of the




21




Company
or any Subsidiary of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or more
employees, officers, directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of Capital Stock of the Company or of such Subsidiary (or securities
convertible into or exercisable for such Capital Stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(2) as a result of any exchange or conversion of any class or series of the
Company’s Capital Stock (or any Capital Stock of a Subsidiary of the Company)
for any class or series of the Company’s Capital Stock (or in the case of a
Subsidiary of the Company, any class or series of such Subsidiary’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 (or in the case of indebtedness of a
Subsidiary of the Company, of any class or series of such Subsidiary’s
indebtedness for any class or series of such Subsidiary’s Capital Stock),
(3) the purchase of fractional interests in shares of the Company’s Capital
Stock (or the Capital Stock of a Subsidiary of the Company) pursuant to the
conversion or exchange provisions of such Capital Stock or the security being
converted or exchanged, (4) any declaration of a dividend in connection
with any stockholders’ rights plan, or the issuance of rights, stock or other
property under any stockholders’ rights plan, or the redemption or repurchase of
rights pursuant thereto, (5) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to
such stock and any cash payments in lieu of fractional shares issued in
connection therewith, or (6) payments under the Capital Securities
Guarantee).




Section 3.9.Covenants
as to the Trust.  For so long as the 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 may succeed to the
Company’s ownership of such Common Securities.  The Company, as owner
of the Common Securities, shall, except in connection with a distribution of
Debentures 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, cause the
Trust  (a) to remain a statutory trust, (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 Debentures.




Section 3.10.Additional
Junior Indebtedness.The Company shall not,
and it shall not cause or permit any Subsidiary of the Company to, incur, issue
or be obligated on any Additional Junior Indebtedness, either directly or
indirectly, by way of guarantee, suretyship or otherwise, other than Additional
Junior Indebtedness that, by its terms, is expressly stated to be either junior
and subordinate or pari
passu in all respects to the Debentures.




ARTICLE
IV.


SECURITYHOLDERS LISTS AND
REPORTS


BY THE COMPANY AND THE
TRUSTEE




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




22




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




(b)           at
such other times as the Trustee may request in writing, within 30 days
after the receipt by the 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 4.1 so long as the
Trustee is in possession thereof by reason of its acting as Debenture
registrar.




Section 4.2.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 Debentures
(1) contained in the most recent list furnished to it as provided in
Section 4.1 or (2) received by it in the capacity of Debentures
registrar (if so acting) hereunder.  The Trustee may destroy any list
furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.




(b)           In
case three or more holders of Debentures (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 Debenture for a period of
at least 6 months preceding the date of such application, and such application
states that the applicants desire to communicate with other holders of
Debentures with respect to their rights under this Indenture or under such
Debentures and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within 5 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 4.2, or




(2)           inform
such applicants as to the approximate number of holders of Debentures 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 4.2, 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 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 4.2 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




23




interests
of the holders of all Debentures, 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 Debentures, by receiving and holding the same, agrees with
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 Debentures in
accordance with the provisions of subsection (b) of this Section 4.2,
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).




ARTICLE
V.


REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS


UPON AN EVENT OF
DEFAULT




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




(a)           the
Company defaults in the payment of any interest upon any Debenture when it
becomes due and payable, and fails to cure such default for a period of
30 days; provided, however, that a valid
extension of an interest payment period by the Company in accordance with the
terms of this Indenture shall not constitute a default in the payment of
interest for this purpose; or




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




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




24




breach
and requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder; or




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




(e)           the
Company shall commence a voluntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary case under
any such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the 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




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




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




The
foregoing provisions, however, are subject to the condition that if, at any time
after the principal of the Debentures shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debentures and the principal of and
premium, if any, on the Debentures which shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and
Additional Interest) and such amount as shall be sufficient to cover reasonable
compensation of the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other amounts due to the Trustee pursuant
to Section 6.6, if any, and (ii) all Events of Default under this
Indenture, other than the non-payment of the principal of or premium, if any, on
the Debentures which shall have become due by acceleration, shall have been
cured, waived or otherwise remedied as provided herein -- then and in every
such case the holders of a majority in aggregate principal amount of the
Debentures then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults and rescind and annul such declaration and its
consequences, but no such waiver or




25




rescission
and annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.




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




Section 5.2.Payment
of Debentures on Default; Suit Therefor.  The Company covenants
that upon the occurrence and during the continuation of an Event of Default
pursuant to Section 5.1(a) or Section 5.1(b) then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the
Debentures the whole amount that then shall have become due and payable on all
Debentures for principal and premium, if any, or interest, or both, as the case
may be, with Additional Interest accrued on the Debentures (to the extent that
payment of such interest is enforceable under applicable law and, if the
Debentures are held by the Trust or a trustee of such Trust, without duplication
of any other amounts paid by the Trust or a trustee of the Trust in respect
thereof); and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any other
amounts due to the Trustee under Section 6.6.  In case the
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 Debentures and
collect in the manner provided by law out of the property of the Company or any
other obligor on such Debentures wherever situated the moneys adjudged or
decreed to be payable.




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




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




(b) in case
of any judicial proceedings, (i) 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
  26
  and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all other amounts due to the Trustee under Section 6.6),
and of the Securityholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Debentures, or to the creditors or property
of the Company or such other obligor, unless prohibited by applicable law and
regulations and (ii) to vote on behalf of the holders of the Debentures in any
election of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person performing
similar functions in comparable proceedings,




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




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




By its
acceptance of any Debentures, each Securityholder shall be deemed to have
authorized any receiver, assignee or trustee in bankruptcy or reorganization to
make such payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other amounts due to the Trustee under
Section 6.6.




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




All
rights of action and of asserting claims under this Indenture, or under any of
the Debentures, may be enforced by the Trustee without the possession of any of
the Debentures, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and, subject to
Section 5.3, any recovery of judgment shall be for the ratable benefit of
the holders of the Debentures.




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




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




27




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




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




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




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




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




Notwithstanding
any other provisions in this Indenture, however, the right of any holder of any
Debenture to receive payment of the principal of, premium, if any, and interest,
on such Debenture 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
and by accepting a Debenture hereunder it is expressly understood, intended and
covenanted by the taker and holder of every Debenture with every other such
taker and holder and the Trustee, that no one or more holders of Debentures
shall have any right in any manner whatsoever by virtue or by availing itself of
any provision of this Indenture to affect, disturb or prejudice the rights of
the holders of any other Debentures, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures.  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.




Section 5.5.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.




28




Section 5.6.Remedies
Cumulative and Continuing; Delay or Omission Not a
Waiver.  Except as otherwise provided in Section 2.6 with
respect to the replacement of mutilated, destroyed, lost or stolen Debentures,
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 Debentures, 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 Debentures, and no delay
or omission of the Trustee or of any holder of any of the Debentures to exercise
any right, remedy or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right, remedy 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 5.4, 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 (in accordance with its duties under Section 6.1) or by the
Securityholders.




No delay
or omission of the Trustee or any Securityholder to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence
therein.  Every right and remedy given by this Article or by law to
the Trustee or to any Securityholder may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee (in accordance with its duties
under Section 6.1 hereof) or by such holder, as the case may be.




Section 5.7.Direction
of Proceedings and Waiver of Defaults by Majority of
Securityholders.  The holders of a majority in aggregate
principal amount of the Debentures affected (voting as one class) at the time
outstanding 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 Debentures;
provided, however, that
(subject to the provisions of Section 6.1) the Trustee shall have the right
to decline to follow any such direction if the Trustee 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.




The
holders of a majority in aggregate principal amount of the Debentures at the
time outstanding may on behalf of the holders of all of the Debentures waive (or
modify any previously granted waiver of) any past default or Event of Default,
and its consequences, except an Event of Default (a) specified in Sections
5.1(a) and (b), (b) in respect of covenants or provisions hereof which
cannot be modified or amended without the consent of the holder of each
Debenture affected, or (c) in respect of the covenants contained in
Section 3.9; provided, however, that if the
Debentures are held by the Trust or a trustee of such 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 shall have consented to
such waiver or modification to such waiver, provided, further, that if the
consent of the holder of each outstanding Debenture is required, such waiver
shall not be effective until each holder of the Trust Securities shall have
consented to such waiver.  Upon any such waiver, the default covered
thereby shall be deemed to




29




be cured
for all purposes of this Indenture and the Company, the Trustee and the holders
of the Debentures shall be restored to their former positions and rights
hereunder, respectively; but no 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, said default or Event of Default
shall for all purposes of the Debentures and this Indenture be deemed to have
been cured and to be not continuing.




Section 5.8.Notice of
Defaults.  The Trustee shall, within 90 days after the
actual knowledge by a Responsible Officer of the Trustee of the occurrence of a
default with respect to the Debentures, mail to all Securityholders, as the
names and addresses of such holders appear upon the Debenture Register, notice
of all defaults with respect to the Debentures 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 5.8 being hereby defined to be
the events specified in clauses (a), (b), (c), (d), (e) and (f) of
Section 5.1, not including periods of grace, if any, provided for therein);
provided, however, that, except
in the case of default in the payment of the principal of, premium, if any, or
interest on any of the Debentures, 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 5.9.Undertaking
to Pay Costs.  All parties to this Indenture agree, and each
holder of any Debenture by his 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; provided, however, that the
provisions of this Section 5.9 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 Debentures outstanding, or 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 Debenture against the Company on or after the same shall have
become due and payable.




ARTICLE
VI.


CONCERNING THE
TRUSTEE




Section 6.1.Duties
and Responsibilities of Trustee.  With respect to the holders
of Debentures issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Debentures and after the curing or waiving of all
Events of Default which may have occurred, with respect to the Debentures,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee.  In case an Event of Default with
respect to the Debentures 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 man would exercise or use under the circumstances in the conduct of his
own affairs.




30




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 Debentures 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 Debentures 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 Debentures 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 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; and




(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 5.7, 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.




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, if there is ground for believing that the repayment of such funds or
liability is not assured to it under the terms of this Indenture or indemnity
satisfactory to the Trustee against such risk is not reasonably assured to
it.




Section 6.2.Reliance
on Documents, Opinions, etc.  Except as otherwise provided in
Section 6.1:




(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 to be genuine and to have been signed or
presented by the proper party or parties;




31




(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;




(e)           the
Trustee shall not be liable for any action taken or omitted by it in good faith
and 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 Debentures (that has not been cured or waived) to
exercise with respect to Debentures 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 man would exercise or use under the circumstances in the
conduct of his 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 aggregate principal amount of the outstanding Debentures
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;




(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; and




(h)           with
the exceptions of defaults under Sections 5.1(a) or 5.1(b), the Trustee shall
not be charged with knowledge of any Default or Event of Default with respect to
the Debentures unless a 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
Debentures or by any holder of the Debentures.




Section 6.3.No
Responsibility for Recitals, etc.  The recitals contained
herein and in the Debentures (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 Debentures.  The Trustee and the Authenticating




32




Agent
shall not be accountable for the use or application by the Company of any
Debentures or the proceeds of any Debentures authenticated and delivered by the
Trustee or the Authenticating Agent in conformity with the provisions of this
Indenture.




Section 6.4.Trustee,
Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own
Debentures.  The Trustee or any Authenticating Agent or any
paying agent or any transfer agent or any Debenture registrar, in its individual
or any other capacity, may become the owner or pledgee of Debentures with the
same rights it would have if it were not Trustee, Authenticating Agent, paying
agent, transfer agent or Debenture registrar.




Section 6.5.Moneys to
be Held in Trust.  Subject to the provisions of
Section 12.4, 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 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 shall be paid from time to time to the Company upon the written order of
the Company, signed by the Chief Executive Officer, the President, a Vice
President, the Treasurer or an Assistant Treasurer of the Company.




Section 6.6.Compensation
and Expenses of Trustee.  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 request for all 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 expenses and disbursements of its counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or willful misconduct.  The Company also
covenants to indemnify the Trustee and any predecessor Trustee (and its
officers, agents, directors and employees) for, and to hold it harmless against,
any and all loss, damage, action, suit, claim, liability, cost or expense
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or willful misconduct on the part of the Trustee and 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 of
liability.  The obligations of the Company under this Section 6.6
to compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder.  Such additional indebtedness shall be secured by a lien
prior to that of the Debentures 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 Debentures.




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 Section 5.1(d), Section 5.1(e) or
Section 5.1(f), the expenses (including the reasonable charges




33




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.




Notwithstanding
anything in this Indenture or any Debenture to the contrary, the Trustee shall
have no obligation whatsoever to advance funds to pay any principal of or
interest on or other amounts with respect to the Debentures or otherwise advance
funds to or on behalf of the Company.




Section 6.7.Officers’
Certificate as Evidence.  Except as otherwise provided in
Sections 6.1 and 6.2, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable 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 or willful misconduct 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 or willful misconduct 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 6.8.Eligibility
of Trustee.  The Trustee hereunder shall at all times be a
banking corporation or national association organized and doing business under
the laws of the United States of America or any state or territory thereof or of
the District of Columbia authorized under such laws to exercise corporate trust
powers, having (or whose obligations under this Indenture are guaranteed by an
affiliate having) a combined capital and surplus of at least fifty million U.S.
dollars ($50,000,000.00) and subject to supervision or examination by federal,
state, territorial, 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 6.8 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.




In case
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.8, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.9.




If the
Trustee has or shall acquire any “conflicting interest” within the meaning of
§310(b) of the Trust Indenture Act of 1939, the Trustee shall either eliminate
such interest or resign, to the extent and in the manner described by this
Indenture.




34




Section 6.9.Resignation
or Removal of Trustee.




(a)           The
Trustee, or any trustee or trustees hereafter appointed, 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 Debentures at
their addresses as they shall appear on the Debenture Register.  Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, executed by
order of its Board of Directors, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor Trustee.  If no
successor Trustee 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 Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Securityholder
who has been a bona fide holder of a Debenture or Debentures for at least six
months may, subject to the provisions of Section 5.9, on behalf of himself
and all others similarly situated, petition any such court for the appointment
of a successor Trustee.  Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor
Trustee.




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




(1)           the
Trustee shall fail to comply with the provisions of Section 6.8 after
written request therefor by the Company or by any Securityholder who has been a
bona fide holder of a Debenture or Debentures for at least 6 months,
or




(2)           the
Trustee shall cease to be eligible in accordance with the provisions of
Section 6.8 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 a 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 5.9, any Securityholder who has been a bona fide holder of a
Debenture or Debentures for at least 6 months may, on behalf of himself 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 Debentures 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 10 Business Days after such
nomination the Company objects




35




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 6.9
provided, may petition any court of competent jurisdiction for an appointment of
a successor Trustee.




(d)           Any
resignation or removal of the Trustee and appointment of a successor Trustee
pursuant to any of the provisions of this Section shall become effective upon
acceptance of appointment by the successor Trustee as provided in
Section 6.10.




Section 6.10.Acceptance
by Successor Trustee.  Any successor Trustee appointed as
provided in Section 6.9 shall execute, acknowledge and deliver to the
Company and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, duties and
obligations with respect to the Debentures of its predecessor hereunder, with
like effect as if originally named as Trustee herein; but, nevertheless, on the
written request of the Company or of the successor Trustee, the Trustee ceasing
to act shall, upon payment of any amounts then due it pursuant to the provisions
of Section 6.6, execute and deliver an instrument transferring to such
successor Trustee all the rights and powers of the Trustee so ceasing to act and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee thereunder.  Upon request of
any such successor Trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
Trustee all such rights and powers.  Any Trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.




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 Debentures 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 unless at
the time of such acceptance such successor Trustee shall be eligible under the
provisions of Section 6.8.




In no
event shall a retiring Trustee be liable for the acts or omissions of any
successor Trustee hereunder.




Upon
acceptance of appointment by a successor Trustee as provided in this
Section 6.10, the Company shall mail notice of the succession of such
Trustee hereunder to the holders of Debentures at their addresses as they shall
appear on the Debenture Register.  If the Company




36




fails to
mail such notice within 10 Business Days after the acceptance of appointment by
the successor Trustee, the successor Trustee shall cause such notice to be
mailed at the expense of the Company.




Section 6.11.Succession
by Merger, etc.  Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation 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
corporation 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 Debentures 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 Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee may authenticate such
Debentures 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 Debentures 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 Debentures 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
the Debentures 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 Debentures; provided, however, 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 any
Debentures.  Any such Authenticating Agent shall at all times be a
corporation 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 $50,000,000.00 and being subject to supervision or
examination by federal, state, territorial or District of Columbia
authority.  If such corporation 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
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  If at any time
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
corporation into which any Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
consolidation or conversion to which any Authenticating Agent shall be a party,
or any corporation succeeding to all or substantially all of the corporate trust
business of any Authenticating Agent, shall be the




37




successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible 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
Debentures 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 Debentures as the names and addresses of such holders appear on the
Debenture 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 Debentures of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein.




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.




ARTICLE
VII.


CONCERNING THE
SECURITYHOLDERS




Section 7.1.Action by
Securityholders.  Whenever in this Indenture it is provided
that the holders of a specified percentage in aggregate principal amount of the
Debentures 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 in person or by agent or proxy appointed in writing, or
(b) by the record of such holders of Debentures voting in favor thereof at
any meeting of such Securityholders duly called and held in accordance with the
provisions of Article VIII, or (c) by a combination of such instrument
or instruments and any such record of such a meeting of such Securityholders 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 for such Debentures 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 Debentures have




38




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 Debentures 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 6 months after the record
date.




Section 7.2.Proof of
Execution by Securityholders.  Subject to the provisions of
Section 6.1, 6.2 and 8.5, proof of the execution of any instrument by a
Securityholder or his 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 Debentures shall be proved by the Debenture Register or by a
certificate of the Debenture 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 8.6.




Section 7.3.Who Are
Deemed Absolute Owners.  Prior to due presentment for
registration of transfer of any Debenture, the Company, the Trustee, any
Authenticating Agent, any paying agent, any transfer agent and any Debenture
registrar may deem the Person in whose name such Debenture shall be registered
upon the Debenture Register to be, and may treat him as, the absolute owner of
such Debenture (whether or not such Debenture shall be overdue) for the purpose
of receiving payment of or on account of the principal of, premium, if any, and
interest on such Debenture 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 Debenture registrar shall be affected by any notice to
the contrary.  All such payments so made to any holder for the time
being or upon his 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 Debenture.




Section 7.4.Debentures
Owned by Company Deemed Not Outstanding.  In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent or waiver under this Indenture,
Debentures which are owned by the Company or any other obligor on the Debentures
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided, however, that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Debentures which a Responsible Officer
of the Trustee actually knows are so owned shall be so
disregarded.  Debentures so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 7.4
if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s
right to vote such Debentures 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.




39




Section 7.5.Revocation
of Consents; Future Holders Bound.  At any time prior to (but
not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Debentures specified in this Indenture in connection with such
action, any holder (in cases where no record date has been set pursuant to
Section 7.1) or any holder as of an applicable record date (in cases where
a record date has been set pursuant to Section 7.1) of a Debenture (or any
Debenture 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 Debentures
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 7.2, revoke such action so far as concerns
such Debenture (or so far as concerns the principal amount represented by any
exchanged or substituted Debenture).  Except as aforesaid any such
action taken by the holder of any Debenture shall be conclusive and binding upon
such holder and upon all future holders and owners of such Debenture, and of any
Debenture 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 Debenture or any Debenture issued in exchange or substitution
therefor.




ARTICLE
VIII.


SECURITYHOLDERS
MEETINGS




Section 8.1.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;




(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 9.2; 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 Debentures under any other
provision of this Indenture or under applicable law.




Section 8.2.Call of
Meetings by Trustee.  The Trustee may at any time call a
meeting of Securityholders to take any action specified in Section 8.1, to
be held at such time and at such place 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 Debentures
affected at their addresses as they shall appear on the Debentures Register and,
if the Company is not a holder of Debentures, to the Company.  Such
notice shall be mailed not less than 20 nor more than 180 days prior to the
date fixed for the meeting.




40




Section 8.3.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 Debentures, 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 for such meeting and may call such meeting to take any action authorized
in Section 8.1, by mailing notice thereof as provided in
Section 8.2.




Section 8.4.Qualifications
for Voting.  To be entitled to vote at any meeting of
Securityholders a Person shall be (a) a holder of one or more Debentures
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
Debentures.  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 8.5.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 Debentures and of the appointment of proxies,
and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall think fit.




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 8.3, 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 of the
meeting.




Subject
to the provisions of Section 7.4, at any meeting each holder of Debentures
with respect to which such meeting is being held or proxy therefor shall be
entitled to one vote for each $1,000.00 principal amount of Debentures held or
represented by him; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Debenture 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 Debentures held by him or instruments in writing as
aforesaid duly designating him as the Person to vote on behalf of other
Securityholders.  Any meeting of Securityholders duly called pursuant
to the provisions of Section 8.2 or 8.3 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 8.6.Voting.  The
vote upon any resolution submitted to any meeting of holders of Debentures 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 Debentures held or represented
by them.  The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all




41




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 8.2.  The record shall show the serial
numbers of the Debentures 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 8.7.Quorum;
Actions.  The Persons entitled to vote a majority in aggregate
principal amount of the Debentures then outstanding 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 less than a specified percentage in aggregate
principal amount of the Debentures then outstanding, the Persons holding or
representing such specified percentage in principal amount of the Debentures
then outstanding 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 8.2, except that such notice need be given
only once not less than 5 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
principal amount of the Debentures then outstanding which shall constitute a
quorum.




Except as
limited by the provisos in the first paragraph of Section 9.2, 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 a majority in aggregate principal amount of the Debentures then
outstanding; provided, however, that, except
as limited by the provisos in the first paragraph of Section 9.2, any
resolution with respect to any consent, waiver, request, demand, notice,
authorization, direction or other action which this Indenture expressly provides
may be given by the holders of not less than a specified percentage in aggregate
principal amount of the Debentures then outstanding 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 a not less than such
specified percentage in principal amount of the Debentures then
outstanding.




42




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




ARTICLE
IX.


SUPPLEMENTAL
INDENTURES




Section 9.1.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 Debentures as the Board of
Directors shall consider to be for the protection of the holders of such
Debentures, 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
such other provisions in regard to matters or questions arising under this
Indenture; provided that any
such action shall not materially adversely affect the interests of the holders
of the Debentures;




(d)           to
add to, delete from, or revise the terms of Debentures, including, without
limitation, any terms relating to the issuance, exchange, registration or
transfer of Debentures, including to provide for transfer procedures and
restrictions substantially similar to those applicable to the Capital Securities
as required by Section 2.5 (for purposes of assuring that no registration
of Debentures is required under the Securities Act); provided, however, that any
such action shall not adversely affect the interests of the holders of the
Debentures then outstanding (it being understood, for purposes of this proviso,
that transfer restrictions on Debentures substantially similar to those that
were applicable to Capital Securities shall not be deemed to materially
adversely affect the holders of the Debentures);




(e)           to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Debentures 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;




43




(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 Debentures, to establish the form of any certifications required to be
furnished pursuant to the terms of this Indenture or the Debentures, or to add
to the rights of the holders of Debentures.




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 9.1 may
be executed by the Company and the Trustee without the consent of the holders of
any of the Debentures at the time outstanding, notwithstanding any of the
provisions of Section 9.2.




Section 9.2.Supplemental
Indentures with Consent of Securityholders.  With the consent
(evidenced as provided in Section 7.1) of the holders of not less than a
majority in aggregate principal amount of the Debentures 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 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 Debentures; provided, however, that no such
supplemental indenture shall without the consent of the holders of each
Debenture then outstanding and affected thereby (i) change the fixed
maturity of any Debenture, or reduce the principal amount thereof or any premium
thereon, or reduce the rate or extend the time of payment of interest thereon,
or reduce any amount payable on redemption thereof or make the principal thereof
or any interest or premium thereon payable in any coin or currency other than
that provided in the Debentures, 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 Debentures the holders of which are required to consent
to any such supplemental indenture; provided further, however, that if the
Debentures are held by a trust or a trustee of such trust, such supplemental
indenture shall not be effective until the holders of a majority in Liquidation
Amount of Trust Securities shall have consented to such supplemental indenture;
provided further, however, that if the
consent of the Securityholder of each outstanding Debenture is required, such
supplemental indenture shall not be effective until each holder of the Trust
Securities shall have consented to such supplemental indenture.




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 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




44




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 Debenture
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 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.




Section 9.3.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 Debentures 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 9.4.Notation
on Debentures.  Debentures 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 Debentures 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 Debentures then outstanding.




Section 9.5.Evidence
of Compliance of Supplemental Indenture to be Furnished to
Trustee.  The Trustee, subject to the provisions of
Sections 6.1 and 6.2, shall, in addition to the documents required by
Section 14.6, 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 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 10.1.Optional
Redemption.  The Company shall have the right to redeem the
Debentures, in whole or in part, but in all cases in a principal amount with
integral multiples of




45




$1,000.00,
on any Interest Payment Date on or after the Interest Payment Date in June 2012
(an “Optional
Redemption Date”), at the Optional Redemption Price.




Section 10.2.Special
Event Redemption.  If a Special Event shall occur and be
continuing, the Company shall have the right to redeem the Debentures in whole,
but not in part, at any Interest Payment Date, within 120 days following
the occurrence of such Special Event (the “Special Redemption
Date”) at the Special Redemption Price.




Section 10.3.Notice of
Redemption; Selection of Debentures.  In case the Company shall
desire to exercise the right to redeem all, or, as the case may be, any part of
the Debentures, it shall cause to be mailed a notice of such redemption at least
30 and not more than 60 days prior to the Optional Redemption Date or the
Special Redemption Date to the holders of Debentures so to be redeemed as a
whole or in part at their last addresses as the same appear on the Debenture
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 Debenture designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debenture.




Each such
notice of redemption shall specify the CUSIP number, if any, of the Debentures
to be redeemed, the Optional Redemption Date or the Special Redemption Date, as
applicable, the Optional Redemption Price or the Special Redemption Price, as
applicable, at which Debentures are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Debentures, 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 Debentures are to be redeemed the notice of redemption shall
specify the numbers of the Debentures to be redeemed.  In case the
Debentures are to be 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 Debenture, a
new Debenture or Debentures in principal amount equal to the unredeemed portion
thereof will be issued.




Prior to
10:00 a.m. (New York City time) on the Optional Redemption Date or Special
Redemption Date, as applicable, the Company will deposit with the Trustee or
with one or more paying agents an amount of money sufficient to redeem on the
Optional Redemption Date or the Special Redemption Date, as applicable, all the
Debentures so called for redemption at the appropriate Optional Redemption Price
or Special Redemption Price, together with accrued interest to the Optional
Redemption Date or Special Redemption Date, as applicable.




If all,
or less than all, the Debentures are to be redeemed, the Company will give the
Trustee notice not less than 45 nor more than 60 days, respectively, prior
to the Optional Redemption Date or Special Redemption Date, as applicable, as to
the aggregate principal amount of Debentures to be redeemed and the Trustee
shall select, in such manner as in its sole discretion it shall deem appropriate
and fair, the Debentures or portions thereof (in integral multiples of
$1,000.00) to be redeemed.




46




Section 10.4.Payment
of Debentures Called for Redemption.  If notice of redemption
has been given as provided in Section 10.3, the Debentures or portions of
Debentures with respect to which such notice has been given shall become due and
payable on the Optional Redemption Date or Special Redemption Date, as
applicable, and at the place or places stated in such notice at the applicable
Optional Redemption Price or Special Redemption Price, together with interest
accrued to the Optional Redemption Date or Special Redemption Date, as
applicable, and on and after said date (unless the Company shall default in the
payment of such Debentures at the Optional Redemption Price or Special
Redemption Price, as applicable, together with interest accrued to said date)
interest on the Debentures or portions of Debentures so called for redemption
shall cease to accrue.  On presentation and surrender of such
Debentures at a place of payment specified in said notice, such Debentures or
the specified portions thereof shall be paid and redeemed by the Company at the
applicable Optional Redemption Price or Special Redemption Price, together with
interest accrued thereon to the Optional Redemption Date or Special Redemption
Date, as applicable.




Upon
presentation of any Debenture 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 Debenture or Debentures of
authorized denominations, in principal amount equal to the unredeemed portion of
the Debenture so presented.




ARTICLE
XI.


CONSOLIDATION, MERGER, SALE,
CONVEYANCE AND LEASE




Section 11.1.Company
May Consolidate, etc., on Certain Terms.  Nothing contained in
this Indenture or in the Debentures shall prevent any consolidation or merger of
the Company with or into any other Person (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,
conveyance, transfer or other disposition, directly or indirectly through the
subsidiaries of the Company, in a single transaction or in any series of
transactions occurring during any twelve-month period, of more than 51% of the
assets of the Company or its successor or successors, to any other Person
(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, upon any such consolidation, merger
(where the Company is not the surviving corporation), sale, conveyance, transfer
or other disposition of assets, the due and punctual payment of the principal of
(and premium, if any) and interest on all of the Debentures in accordance with
their terms, according to their tenor, and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be kept or
performed by the Company, shall be expressly assumed by supplemental indenture
satisfactory in form to the Trustee executed and delivered to the Trustee by the
entity formed by such consolidation, or into which the Company shall have been
merged, or by the entity which shall have acquired such assets.




Section 11.2.Successor
Entity to be Substituted.  In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition and upon the assumption
by the successor entity, by supplemental indenture, executed and delivered to
the Trustee and 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
Debentures and the due and punctual performance and observance of all of




47




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 Debentures.  Such successor entity
thereupon may cause to be signed, and may issue in its own name, any or all of
the Debentures 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 Authenticating Agent shall authenticate and deliver any
Debentures 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 Debentures which such successor entity thereafter shall cause to be
signed and delivered to the Trustee or the Authenticating Agent for that
purpose.  All the Debentures so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Debentures theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Debentures had been issued at the date of the execution
hereof.




Section 11.3.Opinion
of Counsel to be Given to Trustee.  The Trustee, subject to the
provisions of Sections 6.1 and 6.2, shall receive, in addition to the
Opinion of Counsel required by Section 9.5, 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 12.1.Discharge
of Indenture.




When




(a) the
Company shall deliver to the Trustee for cancellation all Debentures theretofore
authenticated (other than any Debentures which shall have been destroyed, lost
or stolen and which shall have been replaced or paid   as 
provided in Section 2.6) and not theretofore canceled,
or




(b) all the
Debentures 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 1 year or are to be called for redemption within 1 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 Debentures (other than any Debentures which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.6) 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 Debentures (1) theretofore repaid
to the Company in accordance
  48
  with
the provisions of Section 12.4, 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 2.5, 2.6, 2.8, 3.1, 3.2, 3.4, 6.6, 6.8, 6.9, 12.1 and 12.4 hereof
shall survive until such Debentures shall mature and be
paid.  Thereafter, Sections 6.6 and 12.4 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 the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this
Indenture.  The Company agrees to reimburse the Trustee for any costs
or expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Debentures.




Section 12.2.Deposited
Moneys to be Held in Trust by Trustee.  Subject to the
provisions of Section 12.4, all moneys deposited with the Trustee pursuant
to Section 12.1 shall be held in trust in a non-interest bearing account
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 Debentures 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 12.3.Paying
Agent to Repay Moneys Held.  Upon the satisfaction and
discharge of this Indenture all moneys then held by any paying agent of the
Debentures (other than the Trustee) shall, upon demand of the Company, be repaid
to it or paid to the Trustee, and thereupon such paying agent shall be released
from all further liability with respect to such moneys.




Section 12.4.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 Debentures and not applied but remaining unclaimed by the
holders of Debentures for 2 years after the date upon which the principal of,
and premium, if any, or interest on such Debentures, as the case may be, shall
have become due and payable, shall, subject to applicable escheatment laws, be
repaid to the Company by the Trustee or such paying agent on written demand; and
the holder of any of the Debentures 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 13.1.Indenture
and Debentures Solely Corporate Obligations.  No recourse for
the payment of the principal of or premium, if any, or interest on any
Debenture, 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




49




indenture,
or in any such Debenture, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, officer or director, as such, past, present or future, of the Company
or of any successor Person of the Company, either directly or through the
Company or any successor Person 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 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
Debentures.




ARTICLE
XIV.


MISCELLANEOUS
PROVISIONS




Section 14.1.Successors.  All
the covenants, stipulations, promises and agreements of the Company in this
Indenture shall bind its successors and assigns whether so expressed or
not.




Section 14.2.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 or other authorized Person 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 14.3.Surrender
of Company Powers.  The Company by instrument in writing
executed by authority of at least 2/3 (two-thirds) of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the Company
and thereupon such power so surrendered shall terminate both as to the Company,
and as to any permitted successor.




Section 14.4.Addresses
for Notices, etc.  Any notice, consent, direction, request,
authorization, waiver or demand which by any provision of this Indenture is
required or permitted to be given, made, furnished or served by the Trustee or
by the Securityholders on or to 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 the purpose) to the Company, 380 Sentry Parkway, Blue Bell, PA
19422, Attention:  Robert L. Pratter, Esq.  Any notice,
consent, direction, request, authorization, waiver 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 the Trustee, addressed to the Trustee, 1100 North Market
Street, Wilmington, Delaware 19890-1600, Attention: Corporate Trust
Administration.  Any notice, consent, direction, request,
authorization, waiver or demand on or to any Securityholder shall be deemed to
have been sufficiently given or made, for all purposes, if given or made in
writing at the address set forth in the Debenture Register.




Section 14.5.Governing
Law.  Pursuant to Section 5-1401 of the General
Obligations Law of the State of New York, this Indenture and each Debenture
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.




50




Section 14.6.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.




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 shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) 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; (3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not in the opinion of
such person, such condition or covenant has been complied with.




Section 14.7.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.




Section 14.8.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 14.9.Severability.  In
case any one or more of the provisions contained in this Indenture or in the
Debentures 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 Debentures, but this Indenture
and such Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.




Section 14.10.Assignment.  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 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 hereto.




Section 14.11.Acknowledgment
of Rights.  The Company agrees that, with respect to any
Debentures 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 Debentures held as the assets of such Trust after the
holders of a majority in Liquidation Amount of the Capital Securities of such
Trust have so directed such Institutional Trustee, a holder of record of such
Capital Securities may, to the fullest extent permitted by law, institute legal
proceedings




51




directly
against the Company to enforce such Institutional Trustee’s rights under this
Indenture without first instituting any legal proceedings against such 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
Debentures on the date such interest (or premium, if any) or principal is
otherwise payable (or in the case of redemption, on the redemption date), the
Company agrees 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 Debentures 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 Debentures.




ARTICLE
XV.


SUBORDINATION OF
DEBENTURES




Section 15.1.Agreement
to Subordinate.  The Company covenants and agrees, and each
holder of Debentures by such Securityholder’s acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article XV; and each holder of a Debenture, 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 principal of, and premium, if any, and interest on
all Debentures 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 15.2.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 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 principal (including redemption) of, or premium, if
any, or interest on the Debentures.




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 15.2, such payment shall, subject to Section 15.7, 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




52




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 15.3.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 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 account of the principal (and premium, if
any) or interest on the Debentures.  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 (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 or to the
Trustee.




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 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, 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 Debentures to the payment of all Senior Indebtedness, that may at
the time be outstanding, provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders, altered by such




53




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 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 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in
Article XI of this Indenture.  Nothing in Section 15.2 or in
this Section shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.6 of this Indenture.




Section 15.4.Subrogation.  Subject
to the payment in full of all Senior Indebtedness, 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 the principal of (and premium, if
any) and interest on the Debentures shall be paid in full.  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
Debentures 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 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 or in the
Debentures is intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures 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 Debentures and creditors of the Company, other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the holder of any Debenture 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




54




amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XV.




Section 15.5.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 15.6.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
monies to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article XV.  Notwithstanding the provisions of
this Article XV or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Debentures 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 at least
2 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 Debenture), 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 2 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 to be a holder of Senior Indebtedness (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 15.7.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




55




Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.




With
respect to the holders of Senior Indebtedness, 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 against the Trustee.  The Trustee shall not 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 6.6.




Section 15.8.Subordination
May Not Be Impaired.  No right of any present or future holder
of any Senior Indebtedness 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 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 Debentures to the holders of such Senior Indebtedness, do any
one or more of the following:  (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, 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; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, and any other Person.




Signatures
appear on the following page




56


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.




PMA
      CAPITAL CORPORATIONBy:
            /s/ William
      HitselbergerName:
            William
      HitselbergerTitle:
            Executive
      Vice President andChief
      Financial OfficerWILMINGTON TRUST
      COMPANY,as
      TrusteeBy:
            Christopher J.
      SlaybaughName:
            Christopher
      J. SlaybaughTitle:
            Senior
      Financial Services Officer





57


EXHIBIT
A




FORM
OF FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE




[FORM OF
FACE OF SECURITY]




THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW.  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 AND ANY APPLICABLE STATE SECURITIES
LAWS.  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO PMA CAPITAL
CORPORATION (THE “COMPANY”), (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH
RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR,
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. HEDGING
TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.




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




A-1-1




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 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.




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




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




THIS
SECURITY IS IN REGISTERED FORM WITHIN THE MEANING OF TREASURY REGULATIONS
SECTION 1.871-14(c)(1)(i) FOR U.S. FEDERAL INCOME AND WITHHOLDING TAX
PURPOSES.




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




A-1-2


Floating
Rate Junior Subordinated Deferrable Interest Debenture




of




PMA
CAPITAL CORPORATION




June 21,
2007




PMA
Capital Corporation, a corporation duly organized and existing under the laws of
Pennsylvania (the “Company,” which term includes any successor Person under the
Indenture hereinafter referred to), for value received promises to pay to
Wilmington Trust Company, not in its individual capacity but solely as
Institutional Trustee for PMA Capital Statutory Trust VII (the “Holder”) or
registered assigns, the principal sum of Twenty Million Six Hundred and Nineteen
Thousand dollars ($20,619,000.00) on June 15, 2037, and to pay interest on said
principal sum from June 21, 2007, or from the most recent Interest Payment Date
(defined herein) to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on September 15, December
15, March 15 and June 15 of each year or if such day is not a Business Day, then
the next succeeding Business Day (each such date, an “Interest Payment Date”)
commencing on the Interest Payment Date in September 2007, at an annual rate
equal to 8.91% beginning on (and including) the date of original issuance and
ending on (but excluding) the Interest Payment Date in September 2007 and at an
annual rate for each successive period beginning on (and including) the Interest
Payment Date in September 2007, and each succeeding Interest Payment Date, and
ending on (but excluding) the next succeeding Interest Payment Date (each a
“Distribution Period”), equal to 3-Month LIBOR, determined as described below,
plus 3.55% (the “Coupon Rate”); applied to the principal amount hereof, until
the principal hereof is paid or duly provided for or made available for payment,
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 (including Additional Interest) at the Interest Rate in
effect for each applicable period, compounded quarterly, from the dates such
amounts are due until they are paid or made available for
payment.  The amount of interest payable for any period will be
computed on the basis of the actual number of days in the Distribution Period
concerned divided by 360.  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 Debenture
(or one or more Predecessor Securities) is registered at the close of business
on the regular record date for such interest installment, which shall be fifteen
days prior to the day on which the relevant Interest Payment Date
occurs.  Any such interest installment not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such regular
record date and may be paid to the Person in whose name this Debenture (or one
or more Predecessor Securities) is registered at the close of business on a
special record date.




Capitalized
terms used and not defined in this Debenture shall have the meanings assigned in
the Indenture dated as of the date of original issuance of this Debenture
between the Trustee and the Company.




“3-Month
LIBOR” as used herein, means the London interbank offered interest rate for
three-month U.S. dollar deposits determined by the Trustee in the following
order of priority:  (i) the rate (expressed as a percentage per annum)
for U.S. dollar deposits having a three-month




A-1-3




maturity
that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date (“Telerate Page 3750” means the display designated as “Page
3750” on the Moneyline Telerate Service or such other page as may replace Page
3750 on that service or such other service or services as may be nominated by
the British Bankers’ Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits); (ii) if
such rate cannot be identified on the related Determination Date, the Trustee
will request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date.  If at least two quotations are provided,
3-Month LIBOR will be the arithmetic mean of such quotations; (iii) if
fewer than two such quotations are provided as requested in clause (ii) above,
the Trustee will request four major New York City banks to provide such banks’
offered quotations (expressed as percentages per annum) to leading European
banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such
Determination Date.  If at least two such quotations are provided,
3-Month LIBOR will be the arithmetic mean of such quotations; and (iv) if
fewer than two such quotations are provided as requested in clause (iii) above,
3-Month LIBOR will be a 3-Month LIBOR determined with respect to the
Distribution Period immediately preceding such current Distribution
Period.  If the rate for U.S. dollar deposits having a three-month
maturity that initially appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on the related Determination Date is superseded on the Telerate Page 3750
by a corrected rate by 12:00 noon (London time) on such Determination Date, then
the corrected rate as so substituted on the applicable page will be the
applicable 3-Month LIBOR for such Determination Date.  As used herein,
“Determination Date” means the date that is two London Banking Days (i.e., a
business day in which dealings in deposits in U.S. dollars are transacted in the
London interbank market) preceding the commencement of the relevant Distribution
Period.




“Interest
Rate” means for the period beginning on (and including) the date of original
issuance and ending on (but excluding) the Interest Payment Date in September
2007 the rate per annum of 8.91% and for each Distribution Period thereafter,
the Coupon Rate.




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




All
percentages resulting from any calculations on the Debentures will be rounded,
if necessary, to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or
..09876545) being rounded to 9.87655% (or .0987655), and all dollar amounts used
in or resulting from such calculation will be rounded to the nearest cent (with
one-half cent being rounded upward)).




The
principal of and interest on this Debenture 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 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 by check mailed to the registered holder at such address
as shall appear in the Debenture Register if a request for a wire transfer by
such holder has not been received by the Company or by wire transfer to an
account appropriately designated by the holder
hereof.  Notwithstanding the




A-1-4




foregoing,
so long as the holder of this Debenture is the Institutional Trustee, the
payment of the principal of and interest on this Debenture will be made in
immediately available funds at such place and to such account as may be
designated by the Trustee.




So long
as no Event of Default 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 Debentures by extending the interest payment period
on the Debentures at any time and from time to time during the term of the
Debentures, for up to 20 consecutive quarterly periods (each such extended
interest payment period, an “Extension Period”), during which Extension Period
no interest (including Additional Interest) shall be due and payable (except any
Additional Sums that may be due and payable).  No Extension Period may
end on a date other than an Interest Payment Date.  During an
Extension Period, interest will continue to accrue on the Debentures, and
interest on such accrued interest will accrue at an annual rate equal to the
Interest Rate in effect for such Extension Period, compounded quarterly from the
date such interest would have been payable were it not for the Extension Period,
to the extent permitted by law (such interest referred to herein as “Additional
Interest”).  At the end of any such Extension Period the Company shall
pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date; provided further, however, that during
any such Extension Period, the Company shall not and shall not permit any
Affiliate of the Company controlled by the Company to engage in any of the
activities or transactions described on the reverse side hereof and in the
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
20 consecutive quarterly periods, or extend beyond the Maturity
Date.  Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and Additional Interest, the Company
may commence a new Extension Period, subject to the foregoing
requirements.  No interest or Additional Interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during an
Extension Period shall bear Additional Interest to the extent permitted by
applicable law.  The Company must give the Trustee notice of its
election to begin or extend an Extension Period at least 5 Business Days prior
to the regular record date (as such term is used in Section 2.8 of the
Indenture) immediately preceding the Interest Payment Date with respect to which
interest on the Debentures would have been payable except for the election to
begin or extend an Extension Period.  The Trustee shall give notice of
the Company’s election to begin a new Extension Period to the holders of the
Debentures.




The
indebtedness evidenced by this Debenture 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 Debenture is issued subject to the
provisions of the Indenture with respect thereto.  Each holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or effectuate
the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes.  Each holder hereof,
by his or her acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior




A-1-5




Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.




This
Debenture shall not be entitled to any benefit under the Indenture hereinafter
referred to, 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.




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




A-1- 6


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




PMA
      CAPITAL CORPORATIONBy:Name:Title:


CERTIFICATE OF
AUTHENTICATION




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




WILMINGTON
      TRUST COMPANY, as TrusteeBy:Authorized Officer





A-1-7




[FORM OF
REVERSE OF DEBENTURE]




This
Debenture is one of the floating rate junior subordinated deferrable interest
debentures of the Company, all issued or to be issued under and pursuant to the
Indenture dated as of June 21, 2007 (the “Indenture”), duly executed and
delivered between the Company and the Trustee, to which Indenture 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 Debentures.  The Debentures are limited in aggregate principal
amount as specified in the Indenture.




Upon the
occurrence and continuation of a Special Event prior to the Interest Payment
Date in June 2012, the Company shall have the right to redeem the Debentures in
whole, but not in part, at any Interest Payment Date, within 120 days following
the occurrence of such Special Event, at the Special Redemption
Price.




In
addition, the Company shall have the right to redeem the Debentures, in whole or
in part, but in all cases in a principal amount with integral multiples of
$1,000.00, on any Interest Payment Date on or after the Interest Payment Date in
June 2012, at the Optional Redemption Price.




Prior to
10:00 a.m. New York City time on the Optional Redemption Date or Special
Redemption Date, as applicable, the Company will deposit with the Trustee or
with one or more paying agents an amount of money sufficient to redeem on the
Optional Redemption Date or the Special Redemption Date, as applicable, all the
Debentures so called for redemption at the appropriate Optional Redemption Price
or Special Redemption Price.




If all,
or less than all, the Debentures are to be redeemed, the Company will give the
Trustee notice not less than 45 nor more than 60 days prior to the Optional
Redemption Date or Special Redemption Date, as applicable, as to the aggregate
principal amount of Debentures to be redeemed and the Trustee shall select, in
such manner as in its sole discretion it shall deem appropriate and fair, the
Debentures or portions thereof (in integral multiples of $1,000.00) to be
redeemed.




Notwithstanding
the foregoing, any redemption of Debentures by the Company shall be subject to
the receipt of any and all required regulatory approvals.




In case
an Event of Default shall have occurred and be continuing, upon demand of the
Trustee, the principal of all of the Debentures 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 Debentures at the time outstanding, to execute supplemental indentures
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
Debentures; provided, however, that no such
supplemental indenture shall without the consent of the holders of each
Debenture then outstanding and affected thereby (i) change the fixed
maturity of any Debenture, or reduce the principal amount thereof or any premium
thereon,




A-1-8




or reduce
the rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or make the principal thereof or any interest or
premium thereon payable in any coin or currency other than that provided in the
Debentures, 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 Debentures 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 Debentures at the time outstanding on behalf
of the holders of all of the Debentures to waive (or modify any previously
granted waiver of) any past default or Event of Default, and its consequences,
except an Event of Default (a) specified in Sections 5.1(a) and (b), (b) in
respect of covenants or provisions hereof or of the Indenture which cannot be
modified or amended without the consent of the holder of each Debenture
affected, or (c) in respect of the covenants contained in Section 3.9
of the Indenture; provided, however, that if the
Debentures 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 shall have consented to
such waiver or modification to such waiver, provided, further, that if the
consent of the holder of each outstanding Debenture is required, such waiver
shall not be effective until each holder of the Trust Securities shall have
consented to such waiver.  Upon any such waiver, the default covered
thereby shall be deemed to be cured for all purposes of the Indenture and the
Company, the Trustee and the holders of the Debentures shall be restored to
their former positions and rights hereunder, respectively; but no 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 the Indenture, said
default or Event of Default shall for all purposes of the Debentures and the
Indenture be deemed to have been cured and to be not continuing.




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




The
Company has agreed that if Debentures 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 Debentures continue to be held by such Trust) and
(i) there shall have occurred and be continuing an Event of Default, (ii)
the dollar amount of the Company’s premium volume from insurance policies in any
calendar year fails to exceed 51% of the Company’s premium volume from insurance
policies in the previous calendar year; (iii) the Company sells more than 51% of
its rights to renew insurance policies in any single transaction or series of
related transactions; (iv) the Pooled Companies or any entity which becomes a
significant subsidiary (as defined in Section 1-02(w) of Regulation S-X to
the Securities Act) of the Company which is rated by A.M. Best Company, Inc. (x)
receives a rating from A.M. Best Company Inc. of B- or lower; or (y) submits a
request to withdraw its rating by A.M Best Company, Inc.; (v) the Company
shall be in default with respect to its payment of any obligations under the
Capital Securities Guarantee, or (vi) the Company shall have given notice
of its election to defer payments of interest on the Debentures by extending the
interest payment period as provided herein and such Extension




A-1-9




Period,
or any extension thereof, shall be continuing, then the Company shall not, and
shall not permit any Affiliate of the Company controlled by the Company
(including, without limitation, any entity issuing Trust Preferred Securities)
to, (x) declare or pay any dividends or distributions on, or repay,
repurchase, redeem, acquire, or make a liquidation payment with respect to, any
of the Company's or such Affiliates' common stock or preferred stock (other than
payments of dividends or distributions to the Company or a Subsidiary of the
Company) or make any guarantee payments with respect to the foregoing,
(y) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities or other debt obligations of the
Company or any Affiliate of the Company controlled by the Company that rank
pari passu in all
respects with or junior in interest to the Debentures or (z) enter into, amend
or modify any contract with a shareholder that directly or indirectly
beneficially owns (as determined under Rule 13d-3 of the Exchange Act and which
shall include securities beneficially owned by (i) all controlled Affiliates of
such shareholder and (ii) all other Persons with whom such shareholder would
constitute a “group” within the meaning of Section 13(d) of the Exchange Act and
the rules promulgated thereunder) more than 10% of the outstanding shares of
common stock of the Company (other than, with respect to clauses (x) and (y)
above, (1) repurchases, redemptions or other acquisitions of shares of
Capital Stock of the Company or any Subsidiary of the Company in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of Capital Stock of the Company or of such
Subsidiary (or securities convertible into or exercisable for such Capital
Stock) as consideration in an acquisition transaction entered into prior to the
applicable Extension Period, (2) as a result of any exchange or conversion
of any class or series of the Company’s Capital Stock (or any Capital Stock of a
Subsidiary of the Company) for any class or series of the Company’s Capital
Stock (or in the case of a Subsidiary of the Company, any class or series of
such Subsidiary’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 (or in the
case of indebtedness of a Subsidiary of the Company, of any class or series of
such Subsidiary’s indebtedness or any class or series of such Subsidiary’s
Capital Stock), (3) the purchase of fractional interests in shares of the
Company’s Capital Stock (or the Capital Stock of a Subsidiary of the Company)
pursuant to the conversion or exchange provisions of such Capital Stock or the
security being converted or exchanged, (4) any declaration of a dividend in
connection with any stockholders’ rights plan, or the issuance of rights, stock
or other property under any stockholders’ rights plan, or the redemption or
repurchase of rights pursuant thereto, (5) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or junior to
such stock and any cash payments in lieu of fractional shares issued in
connection therewith, or (6) payments under the Capital Securities
Guarantee).




The
Debentures are issuable only in registered, certificated form without coupons
and in minimum denominations of $100,000.00 and any multiple of $1,000.00 in
excess thereof.  As provided in the Indenture and subject to the
transfer restrictions and limitations as may be contained herein and therein
from time to time, this Debenture is transferable by the holder hereof on the
Debenture Register of the Company.  Upon due presentment for
registration of transfer of any Debenture at the Principal Office of the Trustee
or at any office or agency of the Company maintained for such purpose as
provided in Section 3.2 of the Indenture, the Company




A-1-10




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 Debenture for a like aggregate
principal amount.  All Debentures 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 the Trustee or the Authenticating Agent duly executed by the holder
or his attorney duly authorized in writing.  No service charge shall
be made for any exchange or registration of transfer of Debentures, 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.




Prior to
due presentment for registration of transfer of any Debenture, the Company, the
Trustee, any Authenticating Agent, any paying agent, any transfer agent and any
Debenture registrar may deem the Person in whose name such Debenture shall be
registered upon the Debenture Register to be, and may treat him as, the absolute
owner of such Debenture (whether or not such Debenture shall be overdue) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and interest on such Debenture 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 Debenture registrar shall be affected by any notice
to the contrary.  All such payments so made to any holder for the time
being or upon his 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 Debenture.




The
Debentures are in registered form within the meaning of Treasury Regulations
Section 1.871-14(c)(1)(i) for U.S. federal income and withholding tax
purposes.




No
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, 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 the Indenture or in any supplemental indenture, or in any such
Debenture, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, officer or
director, as such, past, present or future, of the Company or of any successor
Person of the Company, either directly or through the Company or any successor
Person 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 understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of the
Indenture and the issue of the Debentures.




PURSUANT
TO SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK,
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.