Indenture between HNC and Wilmington Trust


    Exhibit
      10.29

    


    


    


    HARLEYSVILLE
      NATIONAL CORPORATION 

    as
      Issuer

    


    


    


    


    


    


    


    


    INDENTURE

     

    Dated
      as
      of September 28, 2005 

    


    


    


    WILMINGTON
      TRUST COMPANY

    as
      Trustee

    


    


    


    FIXED/FLOATING
      RATE JUNIOR SUBORDINATED DEBT SECURITIES DUE 2035

     

    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

                                                   TABLE
      OF CONTENTS               

     

                                                                            
      Page
                                                                      

    ARTICLE
      I    DEFINITIONS                            
      1

     

    Section
      1.01.    Definitions                                                 1

     

    ARTICLE
      II    DEBT
      SECURITIES                                                   9

     

    Section
      2.01.    Authentication
      and Dating                             9

     

    Section
      2.02.    Form
      of
      Trustee’s Certificate of
      Authentication                                                                
      9

     

    Section
      2.03.    Form
      and
      Denomination of Debt
      Securities                                                                        
      9

     

    Section
      2.04.    Execution
      of
      Debt
      Securities                                                                                               
      10

     

    Section
      2.05.    Exchange
      and Registration of Transfer of Debt
      Securities                                            
      10

     

    Section
      2.06.    Mutilated,
      Destroyed, Lost or Stolen Debt
      Securities                                                    
      13

     

    Section
      2.07.    Temporary
      Debt
      Securities                                                                                                  14

     

    Section
      2.08.    Payment
      of
      Interest                                                                                                              
      14

     

    Section
      2.09.    Cancellation
      of Debt Securities Paid,
      etc.                                                                         
      16

     

    Section
      2.10.    Computation
      of
      Interest                                                                                                      
      16

     

    Section
      2.11.    Extension
      of
      Interest Payment
      Period                                                                               
      18

     

    Section
      2.12.    CUSIP
      Numbers                                                                                                                    
      18

     

    ARTICLE
      III    PARTICULAR
      COVENANTS OF THE
      COMPANY                                                                       
      19

     

    Section
      3.01.    Payment
      of Principal, Premium and Interest; Agreed Treatment 

              
of
      the Debt
      Securities                                                                                                          
      19

     

    Section
      3.02.    Offices
      for
      Notices and Payments,
      etc.                                                                              19

     

    Section
      3.03.    Appointments
      to Fill Vacancies in Trustee’s
      Office                                                       
      20

     

    Section
      3.04.    Provision
      as to Paying
      Agent                                                                                             
      20

     

    Section
      3.05.    Certificate
      to
      Trustee                                                                                                            
      21

     

    Section
      3.06.    Additional
      Interest                                                                                                                
      21

     

    Section
      3.07.    Compliance
      with Consolidation
      Provisions                                                                      
      22

     

    Section
      3.08.    Limitation
      on
      Dividends                                                                                                      
      22

     

    Section
      3.09.    Covenants
      as to the
      Trust                                                                                                   
      22

     

    ARTICLE
      IV         
LISTS
      AND REPORTS BY THE
      COMPANY AND THE
      TRUSTEE                           
      23

     

    Section
      4.01.    Securityholders’
      Lists                                                                                                           23

     

    Section
      4.02.    Preservation
      and Disclosure of
      Lists                                                                             
          23

     

    Section
      4.03.    Financial
      and Other
      Information                                                                                         
      24

     

    ARTICLE
      V    REMEDIES
      OF THE TRUSTEE AND SECURITYHOLDERS 

                    
      UPON AN EVENT OF
      DEFAULT                                                                                                        
      25

     

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

         TABLE
       OF CONTENTS

    (continued)

     

                                                                              
      Page

     

    Section
      5.01.    Events
      of
      Default                                                                                                                  
      25

     

    Section
      5.02.    Payment
      of Debt Securities on Default; Suit
      Therefor                                                     27

     

    Section
      5.03.    Application
      of Moneys Collected by
      Trustee                                                                  
      28

     

    Section
      5.04.    Proceedings
      by
      Securityholders                                                                                         
      28

     

    Section
      5.05.    Proceedings
      by
      Trustee                                                                                                        
      29

     

    Section
      5.06.    Remedies
      Cumulative and
      Continuing                                                                              
       29

     

    Section
      5.07.    Direction
      of Proceedings and Waiver of Defaults by Majority 

               of
       Securityholders                                                                                                               
      29

     

    Section
      5.08.    Notice
      of
      Defaults                                                                                                                 
      30

     

    Section
      5.09.    Undertaking
      to Pay
      Costs                                                                                                    30

     

    ARTICLE
      VI    CONCERNING
      THE
      TRUSTEE                                                                                                            31

     

    Section
      6.01.    Duties
      and Responsibilities of
      Trustee                                                                             
      31

     

    Section
      6.02.    Reliance
      on Documents, Opinions,
      etc                                                                             
      32

     

    Section
      6.03.    No
      Responsibility for Recitals,
      etc                                                                                     33

     

    Section
      6.04.    Trustee,
      Authenticating Agent, Paying Agents, Transfer Agents 

                or
      Registrar May Own
      Debt
      Securities                                                                            
      33

     

    Section
      6.05.    Moneys
      to
      be Held in
      Trust                                                                                               
      33

     

    Section
      6.06.    Compensation
      and Expenses of
      Trustee                                                                   
             34

       


    Section
      6.07.    Officers’
      Certificate as
      Evidence                                                                                        
      34

     

    Section
      6.08.    Eligibility
      of
      Trustee                                                                                                           
        35

     

    Section
      6.09.    Resignation
      or Removal of
      Trustee                                                                                   
      35

     

    Section
      6.10.    Acceptance
      by Successor
      Trustee                                                                                     36

     

    Section
      6.11.    Succession
      by Merger,
      etc                                                                                                  
      37

     

    Section
      6.12.    Authenticating
      Agents                                                                                                        
      38

     

    ARTICLE
      VII    CONCERNING
      THE SECURITYHOLDERS39

     

    Section
      7.01.    Action
      by
      Securityholders                                                                                                  
      39

     

    Section
      7.02.    Proof
      of
      Execution by
      Securityholders                                                                              
      40

     

    Section
      7.03.    Who
      Are
      Deemed Absolute
      Owners                                                                                  40

     

    Section
      7.04.    Debt
      Securities Owned by Company Deemed Not
      Outstanding                                   
      40

     

    Section
      7.05.    Revocation
      of Consents; Future Holders
      Bound                                                             
      40

     


    
      
        
        

      

      
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          TABLE
            OF CONTENTS

          (continued)

                                                      Page

           

          


        

      

    


    ARTICLE
      VIII    SECURITYHOLDERS’
      MEETINGS                                       41

     

    Section
      8.01.    Purposes
      of Meetings                                           
41

     

    Section
      8.02.    Call
      of
      Meetings by
      Trustee                                                                                                                             
      41

     

    Section
      8.03.    Call
      of
      Meetings by Company or
      Securityholders                                                                                        
      42

     

    Section
      8.04.    Qualifications
      for
      Voting                                                                                                                                   
      42

     

    Section
      8.05.    Regulations                                                                                                                                                         
      42

     

    Section
      8.06.    Voting                                                                                                                                                                  
43

     

    Section
      8.07.    Quorum;
      Actions                                                                                                                                               
      43

     

    ARTICLE
      IX    SUPPLEMENTAL
      INDENTURES                                                                                                                                   
      44

     

    Section
      9.01.    Supplemental
      Indentures without Consent of
      Securityholders                                                                   44

     

    Section
      9.02.    Supplemental
      Indentures with Consent of
      Securityholders                                                                        
      45

     

    Section
      9.03.    Effect
      of
      Supplemental
      Indentures                                                                                                                 
       46

     

    Section
      9.04.    Notation
      on Debt
      Securities                                                                                                                             
      47

     

    Section
      9.05.    Evidence
      of Compliance of Supplemental Indenture to be Furnished to
      Trustee                                    
      47

     

    ARTICLE
      X    REDEMPTION
      OF
      SECURITIES                                                                                                                                       
      47

     

    Section
      10.01.    Optional
      Redemption                                                                                                                                    
          47

     

    Section
      10.02.    Special
      Event
      Redemption                                                                                                                                47

     

    Section
      10.03.    Notice
      of
      Redemption; Selection of Debt
      Securities                                                                                   
      47

     

    Section
      10.04.    Payment
      of Debt Securities Called for
      Redemption                                                                                      48

     

    ARTICLE
      XI    CONSOLIDATION,
      MERGER, SALE, CONVEYANCE AND
      LEASE                                                                        
      49

     

    Section
      11.01.    Company
      May Consolidate, etc., on Certain
      Terms                                                                                    
      49

     

    Section
      11.02.    Successor
      Entity to be
      Substituted                                                                                                                
      49

     

    Section
      11.03.    Opinion
      of Counsel to be Given to
      Trustee                                                                                                   
      50

     

    ARTICLE
      XII    SATISFACTION
      AND DISCHARGE OF
      INDENTURE                                                                                                50

     

    Section
      12.01.    Discharge
      of
      Indenture                                                                                                                                     
      50

     

    Section
      12.02.    Deposited
      Moneys to be Held in Trust by
      Trustee                                                                                     
      51

     

    Section
      12.03.    Paying
      Agent to Repay Moneys
      Held                                                                                                           
      51

     

    Section
      12.04.    Return
      of
      Unclaimed
      Moneys                                                                                                                         
      51

     

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        
TABLE OF CONTENTS

    

    (continued)

     

                                                                                                                                                                                    Page

     

    ARTICLE
      XIII    IMMUNITY
      OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
      DIRECTORS                                 
      51

     

    Section
      13.01.    Indenture
      and Debt Securities Solely Corporate
      Obligations                                                                  
      51

     

    ARTICLE
      XIV    MISCELLANEOUS
      PROVISIONS                                                                                                                               
      52

     

    Section
      14.01.    Successors                                                                                                                                                        52

     

    Section
      14.02.    Official
      Acts by Successor
      Entity                                                                                                                
      52

     

    Section
      14.03.    Surrender
      of Company
      Powers                                                                                                                     
      52

     

    Section
      14.04.    Addresses
      for Notices,
      etc                                                                                                                            
      52

     

    Section
      14.05.    Governing
      Law                                                                                                                                                 52

     

    Section
      14.06.    Evidence
      of Compliance with Conditions
      Precedent                                                                                
      53

     

    Section
      14.07.    Business
      Day
      Convention                                                                                                                            
      53

     

    Section
      14.08.    Table
      of
      Contents, Headings,
      etc                                                                                                                
      53

     

    Section
      14.09.    Execution
      in
      Counterparts                                                                                                                            
      53

     

    Section
      14.10.    Separability                                                                                                                                                      54

     

    Section
      14.11.    Assignment                                                                                                                                                    
      54

     

    Section
      14.12.    Acknowledgment
      of
      Rights                                                                                                                         
      54

     

    ARTICLE
      XV    SUBORDINATION
      OF DEBT
      SECURITIES                                                                                                             
      54

     

    Section
      15.01    Agreement
      to
      Subordinate                                                                                                                           
      54

     

    Section
      15.02.    Default
      on Senior
      Indebtedness                                                                                                                
      55

     

    Section
      15.03.    Liquidation;
      Dissolution;
      Bankruptcy                                                                                                     
       55

     

    Section
      15.04.    Subrogation                                                                                                                                                   56

     

    Section
      15.05.    Trustee
      to Effectuate
      Subordination                                                                                                         
      57

     

    Section
      15.06.    Notice
      by
      the
      Company                                                                                                                               57

     

    Section
      15.07.    Rights
      of
      the Trustee; Holders of Senior
      Indebtedness                                                                        
      58

     

    Section
      15.08.    Subordination
      May Not Be
      Impaired                                                                                                        
      59

     

    


    EXHIBIT
      A    FORM
      OF
      FIXED/FLOATING RATE JUNIOR SUBORDINATED 

              
DEBT
      SECURITY DUE
      2035                                                                                                                                       
      A-1

     

                 EXHIBIT
      B     FORM
      OF
      CERTIFICATE OF OFFICER OF THE
      COMPANY                                                                                   
      B-1

    



    
      
        
          
            	
                     

                  	
                    -iv-

                  	 


          

          


        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    THIS
      INDENTURE, dated as of September 28, 2005, between Harleysville National
      Corporation, a bank holding company incorporated in Pennsylvania (hereinafter
      sometimes called the “Company”), and Wilmington Trust Company, a Delaware
      banking corporation, as trustee (hereinafter sometimes called the
“Trustee”).

     

    W
      I T N E
      S S E T H :

     

    WHEREAS,
      for its lawful corporate purposes, the Company has duly authorized the issuance
      of its Fixed/Floating Rate Junior Subordinated Debt Securities due 2035 (the
      “Debt Securities”) under this Indenture and to provide, among other things, for
      the execution and authentication, delivery and administration thereof, the
      Company has duly authorized the execution of this Indenture.

     

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

     

    ARTICLE
      I

     

    DEFINITIONS

     

    Section
      1.01.  Definitions.

     

    The
      terms
      defined in this Section 1.01 (except as herein otherwise expressly provided
      or
      unless the context otherwise requires) for all purposes of this Indenture and
      of
      any indenture supplemental hereto shall have the respective meanings specified
      in this Section 1.01. All accounting terms used herein and not expressly
      defined shall have the meanings assigned to such terms in accordance with
      generally accepted accounting principles and the term “generally accepted
      accounting principles” means such accounting principles as are generally
      accepted in the United States at the time of any computation. The words
“herein,”“hereof” and “hereunder” and other words of similar import refer to
      this Indenture as a whole and not to any particular Article, Section or other
      subdivision.

     

    “Additional
      Interest” shall have the meaning set forth in Section 3.06.

     

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

     

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

     

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

     

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

     

    “Capital
      Securities Guarantee” means the guarantee agreement that the Company will enter
      into with Wilmington Trust Company or other Persons that operates directly
      or
      indirectly for the benefit of holders of Capital Securities of the
      Trust.

     

    “Capital
      Treatment Event” means the receipt by the Company and the Trust of an Opinion of
      Counsel experienced in such matters to the effect that, as a result of any
      amendment to, or change in, the laws, rules or regulations of the United States
      or any political subdivision thereof or therein, or as the result of any
      official or administrative pronouncement or action or decision interpreting
      or
      applying such laws, rules or regulations, which amendment or change is effective
      or which pronouncement, action or decision is announced on or after the date
      of
      original issuance of the Debt Securities, there is more than an insubstantial
      risk that the Company will not, within 90 days of the date of such opinion,
      be
      entitled to treat an amount equal to the aggregate Liquidation Amount of the
      Capital Securities as “Tier 1 Capital” (or the then equivalent thereof) for
      purposes of the capital adequacy guidelines of the Federal Reserve (or any
      successor regulatory authority with jurisdiction over bank holding companies),
      as then in effect and applicable to the Company, provided,
      however,
      that
      the distribution of the Debt Securities in connection with the liquidation
      of
      the Trust by the Company shall not in and of itself constitute a Capital
      Treatment Event unless such liquidation shall have occurred in connection with
      a
      Tax Event or an Investment Company Event.

     

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

     

    “Code”
      means the Internal Revenue Code of 1986, as amended.

     

    “Common
      Securities” means undivided beneficial interests in the assets of the Trust
      which are designated as “Common Securities” and rank pari
      passu
      with
      Capital Securities issued by the Trust; provided,
      however,
      that if
      an Event of Default (as defined in the Declaration) has occurred and is
      continuing, the rights of holders of such Common Securities to payment


     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        
in
        respect of distributions and payments upon liquidation, redemption and otherwise
        are subordinated to the rights of holders of such Capital
        Securities.

    

     

    “Company”
      means Harleysville National Corporation, a bank holding company incorporated
      in
      Pennsylvania, and, subject to the provisions of Article XI, shall include
      its successors and assigns.

     

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

     

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

     

    “Declaration”
      means the Amended and Restated Declaration of Trust of the Trust dated as of
      September 28, 2005, as amended or supplemented from time to time.

     

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

     

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

     

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

     

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

     

    “Exchange
      Act” means the Securities Exchange Act of 1934, as amended.

     

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

     

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

     

    “Fixed
      Period” has the meaning set forth in Section 2.10.

     

    “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 February 23, May 23, August 23 and November 23 of each year,
      commencing on November 23, 2005, during the term of this Indenture.

     

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

     

    “Interest
      Rate” means a fixed per annum rate of interest equal to 5.67% through the end of
      the Interest Period with respect to the Interest Payment Date occurring in
      November 2010, and a variable per annum rate of interest equal to LIBOR, as
      determined on the LIBOR Determination Date for such Interest Period, plus 1.40%
      for each Interest Period thereafter. “Investment Company Event” means the
      receipt by the Company and the Trust of an Opinion of 

     

    
      
        
        

      

      
        -3-

        
          

        

      

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

    

     

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

     

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

     

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

     

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

     

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

     

    “Maturity
      Date” means November 23, 2035. 

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

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

     

    “Paying
      Agent” means any paying agent for the Debt Securities appointed pursuant to
      Section 3.04.

     

    “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.

     

    “Placement
      Agreement” means the Placement Agreement dated September 28, 2005 among the
      Company, the Trust and Wachovia Capital Markets, LLC.

     

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

     

    “Principal
      Office of the Trustee” means the office of the Trustee, at which at any
      particular time its corporate trust business shall be principally administered,
      which at all times shall be located within the United States and at the time
      of
      the execution of this Indenture shall be Rodney Square North, 1100 North Market
      Street, Wilmington, Delaware 19890-0001.

     

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

     

    “Redemption
      Price”
      means
      100% of the principal amount of the Debt Securities being redeemed plus
      accrued and unpaid interest on such Debt Securities to the Redemption Date
      or,
      in the case of redemption at maturity, the Maturity Date, or, in the case of
      a
      redemption due to the occurrence of a Special Event, to the Special Redemption
      Date if such Special Redemption Date is on or after November 23,
      2010.

     

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

     

    “Securities
      Act” means the Securities Act of 1933, as amended.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    “Securityholder,”“holder
      of Debt Securities” or other similar terms, means any Person in whose name at
      the time a particular Debt Security is registered on the Debt Security
      Register.

     

    “Senior
      Indebtedness” means, with respect to the Company, (i) the principal,
      premium, if any, and interest in respect of (A) indebtedness of the
      Company
      for money borrowed, similar obligations arising from off-balance sheet
      guarantees and direct credit substitutes and (B) indebtedness evidenced
      by
      securities, debentures, notes, bonds or other similar instruments issued by
      the
      Company; (ii) all capital lease obligations of the Company; (iii) all
      obligations of the Company issued or assumed as the deferred purchase price
      of
      property, all conditional sale obligations of the Company and all obligations
      of
      the Company under any title retention agreement (but excluding trade accounts
      payable arising in the ordinary course of business); (iv) all obligations
      of the Company for the reimbursement of any letter of credit, any banker’s
      acceptance, any security purchase facility, any repurchase agreement or similar
      arrangement, all obligations associated with derivative products such as
      interest rate and foreign exchange contracts and commodity contracts, 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 or asset
      of the Company (whether or not such obligation is assumed by the Company),
      whether incurred on or prior to the date of this Indenture or thereafter
      incurred, unless,
      with the prior approval of the Federal Reserve if not otherwise generally
      approved, it is provided in the instrument
      creating
      or evidencing the same or pursuant to which the same is outstanding,
      that
      such
      obligations are not superior or are pari
      passu
      in right
      of payment to the Debt Securities ;
      provided, however, that Senior Indebtedness shall not include (A) any debt
      securities issued to any trust other than the Trust (or a trustee of such trust)
      that is a financing vehicle of the Company (a “financing entity”), in connection
      with the issuance by such financing entity of equity or other securities in
      transactions substantially similar in structure to the transactions contemplated
      hereunder and in the Declaration or (B) any guarantees of the Company in respect
      of the equity or other securities of any financing entity referred to in clause
      (A) above.

     

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

     

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

     

    “Special
      Redemption Price” means, with respect to the redemption of any Debt Security
      following a Special Event, an amount in cash equal to the percentage for the
      principal amount of the Debt Securities that is specified below for the Special
      Redemption Date plus unpaid interest accrued thereon to the Special Redemption
      Date:

     

    
      
        	
                Special
                  Event Redemption During Period Beginning On 

              	
                Percentage
                  of Principal Amount

              
	
                September
                  28, 2005

              	
                104.40

              


      

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

      

      
        	
                November
                  23, 2006

              	
                103.52

              
	
                November
                  23, 2007

              	
                102.64

              
	
                November
                  23, 2008

              	
                101.76

              
	
                November
                  23, 2009

              	
                100.88

              
	
                November
                  23, 2010

              	
                100.00

              


      

    

     

     

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

     

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

     

    “Trust”
      means HNC Statutory Trust III, a Delaware statutory trust, or any other similar
      trust created for the purpose of issuing Capital Securities in connection with
      the issuance of Debt Securities under this Indenture, of which the Company
      is
      the sponsor.

     

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

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    ARTICLE
      II

     

    DEBT
      SECURITIES

     

    Section
      2.01.  Authentication
      and Dating.

     

    Upon
      the
      execution and delivery of this Indenture, or from time to time thereafter,
      Debt
      Securities in an aggregate principal amount not in excess of $25,774,000 may
      be
      executed and delivered by the Company to the Trustee for authentication, and
      the
      Trustee shall thereupon authenticate and make available for delivery said Debt
      Securities to or upon the written order of the Company, signed by its Chairman
      of the Board of Directors, Vice Chairman, President or Chief Financial Officer
      or one of its Vice Presidents, without any further action by the Company
      hereunder. In authenticating such Debt Securities, and accepting the additional
      responsibilities under this Indenture in relation to such Debt Securities,
      the
      Trustee shall be entitled to receive, and (subject to Section 6.01)
      shall
      be fully protected in relying upon a copy of any Board Resolution or Board
      Resolutions relating thereto and, if applicable, an appropriate record of any
      action taken pursuant to such resolution, in each case certified by the
      Secretary or an Assistant Secretary or other officer with appropriate delegated
      authority of the Company as the case may be.

     

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

     

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

     

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

     

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

     

    This
      certificate represents Debt Securities referred to in the within-mentioned
      Indenture.

     

    WILMINGTON
      TRUST COMPANY, not
      in
      its individual capacity but solely as trustee

     

    By_________________________

     

    Authorized
      Officer

     

    Section
      2.03.  Form
      and Denomination of Debt Securities.

     

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

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        
shall
        be
        numbered, lettered, or otherwise distinguished in such manner or in accordance
        with such plans as the officers executing the same may determine with the
        approval of the Trustee as evidenced by the execution and authentication
        thereof.

    

     

    Section
      2.04.  Execution
      of Debt Securities.

     

    The
      Debt
      Securities shall be signed in the name and on behalf of the Company by the
      manual or facsimile
      signature of its Chairman of the Board of Directors, Vice Chairman, President
      or
      Chief Financial Officer or one of its Executive Vice Presidents, Senior Vice
      Presidents, Vice Presidents or any other officer authorized by the Board of
      Directors to sign documents in the name and on behalf of the Company, under
      its
      corporate seal (if then legally required) which may be affixed thereto or
      printed, engraved or otherwise
      reproduced thereon, by facsimile or otherwise, and which need not be attested.
      Only such Debt Securities as shall bear thereon a certificate of authentication
      substantially in the form herein before recited, executed by the Trustee or
      the
      Authenticating Agent by the manual signature of an authorized officer, shall
      be
      entitled to the benefits of this Indenture or be valid or obligatory for any
      purpose. Such certificate by the Trustee or the Authenticating Agent upon any
      Debt Security executed by the Company shall be conclusive evidence that the
      Debt
      Security so authenticated has been duly authenticated and delivered hereunder
      and that the holder is entitled to the benefits of this Indenture.

     

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

     

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

     

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

     

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

     

    Debt
      Securities to be exchanged may be surrendered at the Principal Office of the
      Trustee or at any office or agency to be maintained by the Company for such
      purpose as provided in Section 3.02, and the Company shall execute, the Company
      or the Trustee shall register and the Trustee or the Authenticating Agent shall
      authenticate and make available for delivery in exchange therefor the Debt
      Security or Debt Securities which the Securityholder

     

    
      
        
        

      

      
        -10-

        
          

        

      

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

    

     

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

     

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

     

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

     

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

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
      SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
      MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
      DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
      IS
      EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
      ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
      SELL
      OR OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO
      RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER
      REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A
      THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
      INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
      IN
      RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE
      MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
      SECURITIES ACT THAT IS ACQUIRING 

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        
THE
        SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN “ACCREDITED INVESTOR,”
        FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
        CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
        (D)
        PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
        OF
        THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE
        OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN
        OPINION
        OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
        ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
        THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL
        COMPLY
        WITH THE FOREGOING RESTRICTIONS.

    

     

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

     

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

     

    IN
      CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE
      REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY
      BE
      REQUIRED BY THE 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        
INDENTURE
        TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
        RESTRICTIONS.

    

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    Every
      substituted Debt Security issued pursuant to the provisions of this Section
      2.06
      by virtue of the fact that any such Debt Security is destroyed, lost or stolen
      shall constitute an additional contractual obligation of the Company, whether
      or
      not the destroyed, lost or stolen Debt Security shall be found at any time,
      and
      shall be entitled to all the benefits of this Indenture equally and
      proportionately with any and all other Debt Securities duly issued hereunder.
      All Debt Securities shall be held and owned upon the express condition that,
      to
      the extent permitted by applicable law, the foregoing provisions are exclusive
      with respect to the replacement or payment of mutilated, destroyed, lost or
      stolen Debt Securities and shall preclude any and all other rights or remedies
      notwithstanding any law or statute existing or hereafter enacted to the contrary
      with respect to the replacement or payment of negotiable instruments or other
      securities without their surrender.

     

    Section
      2.07.  Temporary
      Debt Securities.

     

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

     

    Section
      2.08.  Payment
      of Interest.

     

    Each
      Debt
      Security will bear interest at the then applicable Interest Rate from and
      including each Interest Payment Date or, in the case of the first interest
      period, the original date of issuance of such Debt Security to, but excluding,
      the next succeeding Interest Payment Date or, in the case of the last interest
      period, the Redemption Date, Special Redemption Date or Maturity Date, as
      applicable (each such period, an “Interest Period”), on the principal thereof,
      on any overdue principal and (to the extent that payment of such interest is
      enforceable under applicable law) on Deferred Interest and on any overdue
      installment of interest (including Defaulted Interest), payable (subject to
      the
      provisions of Article XII) on each Interest Payment Date commencing on November
      23, 2005, and on the Redemption Date, the Special Redemption Date or the
      Maturity Date, as the case may be. Interest and any Deferred Interest on any
      Debt

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        
 Security
        that is payable, and is punctually paid or duly provided for, on any Interest
        Payment Date shall be paid to the Person in whose name such Debt Security
        (or
        one or more Predecessor Securities) is registered at the close of business
        on
        the regular record date for such interest installment, except that interest
        and
        any Deferred Interest payable on the Maturity Date, the Redemption Date or
        the
        Special Redemption Date, as the case may be, shall be paid to the Person
        to whom
        principal is paid. In the event that any Debt Security or portion thereof
        is
        called for redemption and the redemption date is subsequent to a regular
        record
        date with respect to any Interest Payment Date and prior to such Interest
        Payment Date, interest on such Debt Security will be paid upon presentation
        and
        surrender of such Debt Security.

    

     

    Any
      interest on any Debt Security, other than Deferred Interest, that is payable,
      but is not punctually paid or duly provided for, 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 Debt Securities (or their respective Predecessor
      Securities) are registered at the close of business on a special record date
      for
      the payment of such Defaulted Interest, which shall be fixed in the following
      manner: the Company shall notify the Trustee in writing of the amount of
      Defaulted Interest proposed to be paid on each such Debt Security and the date
      of the proposed payment, and at the same time the Company shall deposit with
      the
      Trustee an amount of money equal to the aggregate amount proposed to be paid
      in
      respect of such Defaulted Interest or shall make arrangements satisfactory
      to
      the Trustee for such deposit prior to the date of the proposed payment, such
      money when deposited to be held in trust for the benefit of the Persons entitled
      to such Defaulted Interest as in this clause provided. Thereupon the Trustee
      shall fix a special record date for the payment of such Defaulted Interest
      which
      shall not be more than fifteen nor less than ten days prior to the date of
      the
      proposed payment and not less than ten days after the receipt by the Trustee
      of
      the notice of the proposed payment. The Trustee shall promptly notify the
      Company of such special record date and, in the name and at the expense of
      the
      Company, shall cause notice of the proposed payment of such Defaulted Interest
      and the special record date therefor to be mailed, first class postage prepaid,
      to each Securityholder at his or her address as it appears in the Debt Security
      Register, not less than ten days prior to such special record date. Notice
      of
      the proposed payment of such Defaulted Interest and the special record date
      therefor having been mailed as aforesaid, such Defaulted Interest shall be
      paid
      to the Persons in whose names such Debt Securities (or their respective
      Predecessor Securities) are registered on such special record date and
      thereafter the Company shall have no further payment obligation in respect
      of
      the Defaulted Interest.

     

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

     

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

     

    Subject
      to the foregoing provisions of this Section, each Debt Security delivered under
      this Indenture upon registration of transfer of or in exchange for or in lieu
      of
      any other 

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    Debt
      Security shall carry the rights to interest accrued and unpaid, and to accrue,
      that were carried by such other Debt Security.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    Section
      2.09.  Cancellation
      of Debt Securities Paid, etc.

     

    All
      Debt
      Securities surrendered for the purpose of payment, redemption, exchange or
      registration of transfer, shall, if surrendered to the Company or any Paying
      Agent, be surrendered to the Trustee and promptly canceled by it, or, if
      surrendered to the Trustee or any Authenticating Agent, shall be promptly
      canceled by it, and no Debt Securities shall be issued in lieu thereof except
      as
      expressly permitted by any of the provisions of this Indenture. All Debt
      Securities canceled by any Authenticating Agent shall be delivered to the
      Trustee. The Trustee shall destroy all canceled Debt Securities unless the
      Company otherwise directs the Trustee in writing, in which case the Trustee
      shall dispose of such Debt Securities as directed by the Company. If the Company
      shall acquire any of the Debt Securities, however, such acquisition shall not
      operate as a redemption or satisfaction of the indebtedness represented by
      such
      Debt Securities unless and until the same are surrendered to the Trustee for
      cancellation.

     

    Section
      2.10.  Computation
      of Interest.

     

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

     

    (b) LIBOR
      shall be determined by the Calculation Agent for each Interest Period after
      the
      end of the Interest Period with respect to the Interest Payment Date occurring
      in November 2010 (the "Fixed Period") in accordance with the following
      provisions:

     

    (1) On
      the
      second LIBOR Business Day (provided,
      that on
      such day commercial banks are open for business (including dealings in foreign
      currency deposits) in London (a “LIBOR Banking Day”), and otherwise the next
      preceding LIBOR Business Day that is also a LIBOR Banking Day) prior to February
      23, May 23, August 23 and November 23, as the case may be, immediately preceding
      the commencement of such Interest Period, (each such day, a “LIBOR Determination
      Date”), LIBOR shall equal the rate, as obtained by the Calculation Agent for
      three-month U.S. Dollar deposits in Europe, which appears on Telerate (as
      defined in the International Swaps and Derivatives Association, Inc. 2000
      Interest Rate and Currency Exchange Definitions) Page 3750 or such other page
      as
      may replace such Telerate Page 3750, as of 11:00 a.m. (London time) on such
      LIBOR Determination Date, as reported by Bloomberg Financial Markets Commodities
      News (or any successor service). “LIBOR Business Day” means any day that is not
      a Saturday, Sunday or other day on which commercial banking institutions in
      New
      York, New York or Wilmington, Delaware are authorized or obligated by law or
      executive order to be closed. If such rate is superseded on Telerate Page 3750
      by a corrected rate before 12:00 noon (London time) on the same LIBOR
      Determination Date, the corrected rate as so substituted will be the applicable
      LIBOR for that LIBOR Determination Date.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    (2) If,
      on
      any LIBOR Determination Date, such rate does not appear on Telerate Page 3750
      as
      reported by Bloomberg Financial Markets Commodities News or such other page
      as
      may replace such Telerate Page 3750, the Calculation Agent shall determine
      the
      arithmetic mean of the offered quotations of the Reference Banks (as defined
      below) to leading banks in the London interbank market for three-month U.S.
      Dollar deposits in Europe (in an amount determined by the Calculation Agent)
      by
      reference to requests for quotations as of approximately 11:00 a.m. (London
      time) on the LIBOR Determination Date made by the Calculation Agent to the
      Reference Banks. If, on any LIBOR Determination Date, at least two of the
      Reference Banks provide such quotations, LIBOR shall equal the arithmetic mean
      of such quotations. If, on any LIBOR Determination Date, only one or none of
      the
      Reference Banks provide such a quotation, LIBOR shall be deemed to be the
      arithmetic mean of the offered quotations that at least two leading banks in
      the
      City of New York (as selected by the Calculation Agent) are quoting on the
      relevant LIBOR Determination Date for three-month U.S. Dollar deposits in Europe
      at approximately 11:00 a.m. (London time) (in an amount determined by the
      Calculation Agent). As used herein, “Reference Banks” means four major banks in
      the London interbank market selected by the Calculation Agent.

     

    (3) If
      the
      Calculation Agent is required but is unable to determine a rate in accordance
      with at least one of the procedures provided above, LIBOR shall be LIBOR in
      effect on the previous LIBOR Determination Date (whether or not LIBOR for such
      period was in fact determined on such LIBOR Determination Date).

     

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

     

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

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    Section
      2.11.  Extension
      of Interest Payment Period.

     

    So
      long
      as no Event of Default pursuant to Sections 5.01(b), (e) or (f) of this
      Indenture has occurred and is continuing, the Company shall have the right,
      from
      time to time and without causing an Event of Default, to defer payments of
      interest on the Debt Securities by extending the interest payment period on
      the
      Debt Securities at any time and from time to time during the term of the Debt
      Securities, for up to twenty consecutive quarterly periods (each such extended
      interest payment period, an “Extension Period”). No Extension Period may end on
      a date other than an Interest Payment Date. During any Extension Period,
      interest will continue to accrue on the Debt Securities, and interest on such
      accrued interest (such accrued interest and interest thereon referred to herein
      as “Deferred Interest”) will accrue, at the Interest Rate, compounded quarterly
      from the date such Deferred Interest would have been payable were it not for
      the
      Extension Period, both to the extent permitted by law. No interest or Deferred
      Interest (except any Additional Interest that may be due and payable) shall
      be
      due and payable during an Extension Period, except at the end thereof. At the
      end of any such Extension Period the Company shall pay all Deferred Interest
      then accrued and unpaid on the Debt Securities; provided,
      however,
      that no
      Extension Period may extend beyond the Maturity Date, Redemption Date or Special
      Redemption Date; and provided further,
      however,
      that
      during any such Extension Period, the Company shall be subject to the
      restrictions set forth in Section 3.08 of this Indenture. Prior to the
      termination of any Extension Period, the Company may further extend such period,
      provided,
      that
      such period together with all such previous and further consecutive extensions
      thereof shall not exceed twenty consecutive quarterly periods. Upon the
      termination of any Extension Period and upon the payment of all Deferred
      Interest, the Company may commence a new Extension Period, subject to the
      foregoing requirements. The Company must give the Trustee notice of its election
      to begin such Extension Period at least one Business Day prior to the date
      such
      interest is payable, but in any event not later than the related regular record
      date. The Trustee shall give notice of the Company’s election to begin a new
      Extension Period to the Securityholders.

     

    Section
      2.12.  CUSIP
      Numbers.

     

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

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    ARTICLE
      III


     

    PARTICULAR
      COVENANTS OF THE COMPANY

     

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

     

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

     

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

     

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

     

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

     

    Section
      3.02.  Offices
      for Notices and Payments, etc.

     

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

     

    
      
        
        

      

      
        -20-

        
          

        

      

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

    

     

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

     

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

     

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

     

    Section
      3.04.  Provision
      as to Paying Agent.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    Section
      3.05.  Certificate
      to Trustee.

     

    The
      Company will deliver to the Trustee on or before 120 days after the end of
      each
      fiscal year, so long as Debt Securities are outstanding hereunder, a
      Certificate, substantially in the form of Exhibit B attached hereto, stating
      that in the course of the performance by the signers of their duties as officers
      of the Company they would normally have knowledge of any default by the Company
      in the performance of any covenants contained herein, stating whether or not
      they have knowledge of any such default and, if so, specifying each such default
      of which the signers have knowledge and the nature thereof.

     

    Section
      3.06.  Additional
      Interest.

     

    If
      and
      for so long as the Trust is the holder of all Debt Securities and is subject
      to,
      or otherwise required to pay, or is required to withhold from distributions
      to
      holders of Trust Securities, any additional taxes (including withholding taxes),
      duties, assessments or other governmental charges as a result of a Tax Event,
      the Company will pay such additional amounts (the “Additional Interest”) on the
      Debt Securities as shall be required so that the net amounts received and
      retained by the Trust after paying taxes, duties, assessments or other
      governmental charges will be equal to the amounts the Trust would have received
      if no such taxes, duties, assessments or other governmental charges had been
      imposed. Whenever in this Indenture or the Debt Securities there is a reference
      in any context to the payment of principal of or premium, if any, or interest
      on
      the Debt Securities, such mention shall be deemed to include mention of payments
      of the Additional Interest provided for in this paragraph to the extent that,
      in
      such context, Additional Interest is, was or would be payable in respect thereof
      pursuant to the provisions of this paragraph and express mention of the payment
      of Additional Interest (if applicable) in any provisions hereof shall not be
      construed as excluding Additional Interest in those provisions hereof where
      such
      express mention is not made, provided,
      however,
      that
      the deferral of the payment of interest during an Extension Period pursuant
      to
      Section 2.11 shall not defer the payment of any Additional Interest that may
      be
      due and payable.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    Section
      3.07.  Compliance
      with Consolidation Provisions.

     

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

     

    Section
      3.08.  Limitation
      on Dividends.

     

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

     

    Section
      3.09.  Covenants
      as to the Trust.

     

    For
      so
      long as such Trust Securities remain outstanding, the Company shall maintain
      100% ownership of the Common Securities; provided,
      however,
      that
      any permitted successor of the Company under this Indenture that is a U.S.
      Person may succeed to the Company’s ownership of such Common Securities. The
      Company, as owner of the Common Securities, shall use commercially reasonable
      efforts to cause the Trust (a) to remain a statutory trust, except in
      connection with a distribution of Debt Securities to the holders of Trust
      Securities 

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        
in
        liquidation of the Trust, the redemption of all of the Trust Securities or
        certain mergers, consolidations or amalgamations, each as permitted by the
        Declaration, (b) to otherwise continue to be classified as a grantor
        trust
        for United States federal income tax purposes and (c) to cause each
        holder
        of Trust Securities to be treated as owning an undivided beneficial interest
        in
        the Debt Securities.

    

     

    ARTICLE
      IV

     

    LISTS
      AND
      REPORTS BY THE COMPANY AND THE TRUSTEE

     

    Section
      4.01.  Securityholders’
      Lists.

     

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

     

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

     

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

     

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

     

    Section
      4.02.  Preservation
      and Disclosure of Lists.

     

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

     

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

     

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

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    Section
      4.03.  Financial
      and Other Information.

     

    (a) The
      Company shall deliver to each holder of the Debt Securities and the Capital
      Securities (1) if the Company or any of its Subsidiaries is not then (x) subject
      to Section 13 or 15(d) of the Exchange Act or (y) exempt from reporting pursuant
      to Rule 12g3-2(b) thereunder, the information required by Rule 144A(d)(4) under
      the Securities Act, (2) if the Company is not then required to file form FR
      Y-9C, the audited annual financial statements (or, if no audited financial
      statements are prepared, the unaudited financial statements) of the Company
      and
      any Subsidiaries within 90 days after the end of the fiscal year, and (3) within
      30 days after the end of the fiscal year of the Company, Form 1099 or such
      other
      annual U.S. federal income tax information statement required by the Code,
      containing such information with 

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        
regard
        to
        the Debt Securities held by such holder as is required by the Code and the
        income tax regulations of the U.S. Treasury thereunder.

    

     

    (b) If
      and so
      long as the holder of the Capital Securities is an entity that
      holds a
      pool of trust preferred securities, debt securities and/or similar securities
      or
      a trustee thereof, the Company will cause copies of its reports on Form FR
      Y-9C,
      Form FR Y-9LP and Form FR Y-6 to be delivered to the holder promptly following
      their filing with the Federal Reserve.

     

    ARTICLE
      V


     

    REMEDIES
      OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT

     

    Section
      5.01.  Events
      of Default.

     

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

     

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

     

    (b) the
      Company defaults in the payment of any interest upon any Debt Security,
      including any Additional Interest in respect thereof, following the nonpayment
      of any such interest for twenty (20) or more consecutive quarterly interest
      payment periods; or

     

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

     

    (d) the
      Company defaults in the performance of, or breaches, any of its covenants or
      agreements in Sections 3.06, 3.07, 3.08 or 3.09 of this Indenture (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 90 days after there has been given, by
      registered or certified mail, to the Company by the Trustee or to the Company
      and the Trustee by the holders of not less than 25% in aggregate principal
      amount of the outstanding Debt Securities, a written notice specifying such
      default or breach and requiring it to be remedied and stating that such notice
      is a “Notice of Default” hereunder; or

     

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

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

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

     

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

     

    If
      an
      Event of Default specified under clause (b) of this Section 5.01 occurs and
      is
      continuing with respect to the Debt Securities, then, in each and every such
      case, either the Trustee or the holders of not less than 25% in aggregate
      principal amount of the Debt Securities then outstanding hereunder, by notice
      in
      writing to the Company (and to the Trustee if given by Securityholders), may
      declare the entire principal of the Debt Securities and any premium and interest
      accrued, but unpaid, thereon to be due and payable immediately, and upon any
      such declaration the same shall become immediately due and payable. If an Event
      of Default specified under clause (e) or (f) of this Section 5.01 occurs, then,
      in each and every such case, the entire principal amount of the Debt Securities
      and any premium and interest accrued, but unpaid, thereon shall ipso facto
      become immediately due and payable without further action.

     

    The
      foregoing provisions, however, are subject to the condition that if, at any
      time
      after the principal of the Debt Securities shall have become due by
      acceleration, and before any judgment or decree for the payment of the moneys
      due shall have been obtained or entered as hereinafter provided, (i) the
      Company shall pay or shall deposit with the Trustee a sum sufficient to pay
      all
      matured installments of interest upon all the Debt Securities and all payments
      on the Debt Securities which shall have become due otherwise than by
      acceleration (with interest upon all such payments and Deferred Interest, to
      the
      extent permitted by law) and such amount as shall be sufficient to cover
      reasonable compensation to the Trustee and each predecessor Trustee, their
      respective agents, attorneys and counsel, and all other amounts due to the
      Trustee pursuant to Section 6.06, if any, and (ii) all Events
      of
      Default under this Indenture, other than the non-payment of the payments on
      Debt
      Securities which shall have become due by acceleration, shall have been cured,
      waived or otherwise remedied as provided herein, then and in every such case
      the
      holders of a majority in aggregate principal amount of the Debt Securities
      then
      outstanding, by written notice to the Company and to the Trustee, may waive
      all
      defaults and rescind and annul such acceleration and its consequences, but
      no
      such waiver or rescission and annulment shall extend to or shall affect any
      subsequent default or shall impair any right consequent thereon.

     

    In
      case
      the Trustee shall have proceeded to enforce any right under this Indenture
      and
      such proceedings shall have been discontinued or abandoned because of such
      rescission or annulment or for any other reason or shall have been determined
      adversely to the Trustee, then and in every such case the Company, the Trustee
      and the holders of the Debt Securities shall be 

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        
restored
        respectively to their several positions and rights hereunder, and all rights,
        remedies and powers of the Company, the Trustee and the holders of the Debt
        Securities shall continue as though no such proceeding had been
        taken.

    

     

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

     

    The
      Company covenants that upon the occurrence of an Event of Default pursuant
      to
      clause (b) of Section 5.01 and upon demand of the Trustee, the Company will
      pay
      to the Trustee, for the benefit of the holders of the Debt Securities, the
      whole
      amount that then shall have become due and payable on all Debt Securities,
      including Deferred Interest accrued on the Debt Securities; and, in addition
      thereto, such further amount as shall be sufficient to cover the costs and
      expenses of collection, including a reasonable compensation to the Trustee,
      its
      agents, attorneys and counsel, and any other amounts due to the Trustee under
      Section 6.06. In case the Company shall fail forthwith to pay such amounts
      upon such demand, the Trustee, in its own name and as trustee of an express
      trust, shall be entitled and empowered to institute any actions or proceedings
      at law or in equity for the collection of the sums so due and unpaid, and may
      prosecute any such action or proceeding to judgment or final decree, and may
      enforce any such judgment or final decree against the Company or any other
      obligor on such Debt Securities and collect in the manner provided by law out
      of
      the property of the Company or any other obligor on such Debt Securities
      wherever situated the moneys adjudged or decreed to be payable.

     

    In
      case
      there shall be pending proceedings for the bankruptcy or for the reorganization
      of the Company or any other obligor on the Debt Securities under Bankruptcy
      Law,
      or in case a receiver or trustee shall have been appointed for the property
      of
      the Company or such other obligor, or in the case of any other similar judicial
      proceedings relative to the Company or other obligor upon the Debt Securities,
      or to the creditors or property of the Company or such other obligor, the
      Trustee, irrespective of whether the principal of the Debt Securities shall
      then
      be due and payable as therein expressed or by acceleration or otherwise and
      irrespective of whether the Trustee shall have made any demand pursuant to
      the
      provisions of this Section 5.02, shall be entitled and empowered, by
      intervention in such proceedings or otherwise, to file and prove a claim or
      claims for the whole amount of principal and interest owing and unpaid in
      respect of the Debt Securities and, in case of any judicial proceedings, to
      file
      such proofs of claim and other papers or documents as may be necessary or
      advisable in order to have the claims of the Trustee (including any claim for
      reasonable compensation to the Trustee and each predecessor Trustee, and their
      respective agents, attorneys and counsel, and for reimbursement of all other
      amounts due to the Trustee under Section 6.06) and of the Securityholders
      allowed in such judicial proceedings relative to the Company or any other
      obligor on the Debt Securities, or to the creditors or property of the Company
      or such other obligor, unless prohibited by applicable law and regulations,
      to
      vote on behalf of the holders of the Debt Securities in any election of a
      trustee or a standby trustee in arrangement, reorganization, liquidation or
      other bankruptcy or insolvency proceedings or Person performing similar
      functions in comparable proceedings, and to collect and receive any moneys
      or
      other property payable or deliverable on any such claims, and to distribute
      the
      same after the deduction of its charges and expenses; and any receiver, assignee
      or trustee in bankruptcy or reorganization is hereby authorized by each of
      the
      Securityholders to make such payments to the Trustee, and, in the event that
      the
      Trustee shall consent to the making of such payments directly to the
      Securityholders, to pay to the Trustee such amounts as shall be sufficient
      to
      cover reasonable 

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        
compensation
        to the Trustee, each predecessor Trustee and their respective agents, attorneys
        and counsel, and all other amounts due to the Trustee under
        Section 6.06.

    

     

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

     

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

     

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

     

    Section
      5.03.  Application
      of Moneys Collected by Trustee.

     

    Any
      moneys collected by the Trustee shall be applied in the following order, at
      the
      date or dates fixed by the Trustee for the distribution of such moneys, upon
      presentation of the several Debt Securities in respect of which moneys have
      been
      collected, and stamping thereon the payment, if only partially paid, and upon
      surrender thereof if fully paid:

     

    First:
      To
      the payment of costs and expenses incurred by, and reasonable fees of, the
      Trustee, its agents, attorneys and counsel, and of all other amounts due to
      the
      Trustee under Section 6.06;

     

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

     

    Third:
      To
      the payment of the amounts then due and unpaid upon Debt Securities, in respect
      of which or for the benefit of which money has been collected, ratably, without
      preference or priority of any kind, according to the amounts due on such Debt
      Securities; and

     

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

     

    Section
      5.04.  Proceedings
      by Securityholders.

     

    No
      holder
      of any Debt Security shall have any right to institute any suit, action or
      proceeding for any remedy hereunder, unless such holder previously shall have
      given to the Trustee written notice of an Event of Default with respect to
      the
      Debt Securities and unless the holders of not less than 25% in aggregate
      principal amount of the Debt Securities then outstanding shall have given the
      Trustee a written request to institute such action, suit or 

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        
proceeding
        and shall have offered to the Trustee such reasonable indemnity as it may
        require against the costs, expenses and liabilities to be incurred thereby,
        and
        the Trustee for 60 days after its receipt of such notice, request and offer
        of
        indemnity shall have failed to institute any such action, suit or proceeding;
        provided,
        that no
        holder of Debt Securities shall have any right to prejudice the rights of
        any
        other holder of Debt Securities, obtain priority or preference over any other
        such holder or enforce any right under this Indenture except in the manner
        herein provided and for the equal, ratable and common benefit of all holders
        of
        Debt Securities.

    

     

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

     

    Section
      5.05.  Proceedings
      by Trustee.

     

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

     

    Section
      5.06.  Remedies
      Cumulative and Continuing.

     

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

     

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

     

    The
      holders of a majority in aggregate principal amount of the Debt Securities
      affected (voting as one class) at the time outstanding shall have the right
      to
      direct the time, method and place of conducting any proceeding for any remedy
      available to the Trustee, or exercising any trust or power conferred on the
      Trustee with respect to such Debt Securities;

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        
provided,
        however,
        that
        (subject to the provisions of Section 6.01) the Trustee shall have the right
        to
        decline to follow any such direction if the Trustee shall determine that
        the
        action so directed would be unjustly prejudicial to the holders not taking
        part
        in such direction or if the Trustee being advised by counsel determines that
        the
        action or proceeding so directed may not lawfully be taken or if a Responsible
        Officer of the Trustee shall determine that the action or proceedings so
        directed would involve the Trustee in personal liability. Prior to any
        declaration of acceleration, or ipso facto acceleration, of the maturity
        of the
        Debt Securities, the holders of a majority in aggregate principal amount
        of the
        Debt Securities at the time outstanding may on behalf of the holders of all
        of
        the Debt Securities waive (or modify any previously granted waiver of) any
        past
        Default or Event of Default and its consequences, except a default (a) in
        the payment of principal of, premium, if any, or interest on any of the Debt
        Securities, (b) in respect of covenants or provisions hereof which
        cannot
        be modified or amended without the consent of the holder of each Debt Security
        affected, or (c)  in respect of the covenants contained in Section
        3.09;
provided,
        however,
        that if
        the Debt Securities are held by the Trust or a trustee of the Trust, such
        waiver
        or modification to such waiver shall not be effective until the holders of
        a
        majority in liquidation preference of the Trust Securities of the Trust shall
        have consented to such waiver or modification to such waiver; provided,
        further,
        that if
        the consent of the holder of each outstanding Debt Security is required,
        such
        waiver shall not be effective until each holder of the Trust Securities of
        the
        Trust shall have consented to such waiver. Upon any such waiver, the Default
        or
        Event of Default covered thereby shall be deemed to be cured for all purposes
        of
        this Indenture and the Company, the Trustee and the holders of the Debt
        Securities shall be restored to their former positions and rights hereunder,
        respectively; but no such waiver shall extend to any subsequent or other
        Default
        or Event of Default or impair any right consequent thereon. Whenever any
        Default
        or Event of Default hereunder shall have been waived as permitted by this
        Section 5.07, said Default or Event of Default shall for all purposes of
        the
        Debt Securities and this Indenture be deemed to have been cured and to be
        not
        continuing.

    

     

    Section
      5.08.  Notice
      of Defaults.

     

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

     

    Section
      5.09.  Undertaking
      to Pay Costs.

     

    All
      parties to this Indenture agree, and each holder of any Debt Security by such
      holder’s acceptance thereof shall be deemed to have agreed, that any court may
      in its discretion require, in any suit for the enforcement of any right or
      remedy under this Indenture, or in any suit against the Trustee for any action
      taken or omitted by it as Trustee, the filing by any party 

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        
litigant
        in such suit of an undertaking to pay the costs of such suit, and that such
        court may in its discretion assess reasonable costs, including reasonable
        attorneys’ fees and expenses, against any party litigant in such suit, having
        due regard to the merits and good faith of the claims or defenses made by
        such
        party litigant; but the provisions of this Section 5.09 shall not apply to
        any
        suit instituted by the Trustee, to any suit instituted by any Securityholder,
        or
        group of Securityholders, holding in the aggregate more than 10% in principal
        amount of the Debt Securities 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 Debt Security against the Company on
        or
        after the same shall have become due and payable.

    

     

    ARTICLE
      VI

     

    CONCERNING
      THE TRUSTEE

     

    Section
      6.01.  Duties
      and Responsibilities of Trustee.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    (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; 

     

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

     

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

     

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

     

    Section
      6.02.  Reliance
      on Documents, Opinions, etc.

     

    Except
      as
      otherwise provided in Section 6.01:

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    (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 Debt Securities (that has not been cured or waived)
      to exercise with respect to the Debt Securities such of the rights and powers
      vested in it by this Indenture, and to use the same degree of care and skill
      in
      their exercise, as a prudent person would exercise or use under the
      circumstances in the conduct of such person’s own affairs;

     

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

     

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

     

    Section
      6.03.  No
      Responsibility for Recitals, etc.

     

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

     

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

     

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

     

    Section
      6.05.  Moneys
      to be Held in Trust.

     

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

     

    
      
        
        

      

      
        -34-

        
          

        

      

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

    

     

    Section
      6.06.  Compensation
      and Expenses of Trustee.

     

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

     

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

     

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

     

    Notwithstanding
      anything in this Indenture or any Debt Security 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 Debt Securities or otherwise
      advance funds to or on behalf of the Company.

     

    Section
      6.07.  Officers’
      Certificate as Evidence.

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    Except
      as
      otherwise provided in Sections 6.01 and 6.02, whenever in the administration
      of
      the provisions of this Indenture the Trustee shall deem it necessary or
      desirable 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 bad faith
      on the part of the Trustee, be deemed to be conclusively proved and established
      by an Officers’ Certificate delivered to the Trustee, and such certificate, in
      the absence of negligence or bad faith on the part of the Trustee, shall be
      full
      warrant to the Trustee for any action taken or omitted by it under the
      provisions of this Indenture upon the faith thereof.

     

    Section
      6.08.  Eligibility
      of Trustee.

     

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

     

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

     

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

     

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

     

    Section
      6.09.  Resignation
      or Removal of Trustee.

     

    (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 Debt Securities
      at their addresses as they shall appear on the Debt Security Register. Upon
      receiving such notice of resignation, the Company shall promptly appoint a
      successor 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 

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        
court
        of
        competent jurisdiction for the appointment of a successor Trustee, or any
        Securityholder who has been a bona fide holder of a Debt Security or Debt
        Securities for at least six months may, subject to the provisions of Section
        5.09, on behalf of himself or herself and all others similarly situated,
        petition any such court for the appointment of a successor 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 the last paragraph of
      Section 6.08 after written request therefor by the Company or by any
      Securityholder who has been a bona fide holder of a Debt Security or Debt
      Securities for at least six months, 

     

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

     

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

     

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

     

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

     

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

     

    Section
      6.10.  Acceptance
      by Successor Trustee.

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

    Any
      successor Trustee appointed as provided in Section 6.09 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 Debt
      Securities 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
      the
      amounts then due it pursuant to the provisions of Section 6.06, 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 hereunder. 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 6.06.

     

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

     

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

     

    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 Debt Securities at their addresses as they shall appear on
      the
      Debt Security Register. If the Company fails to mail such notice within ten
      Business Days after the acceptance of appointment by the successor 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

     

    
      
        
        

      

      
        -38-

        
          

        

      

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

     

    Section
      6.12.  Authenticating
      Agents.

     

    There
      may
      be one or more Authenticating Agents appointed by the Trustee upon the request
      of the Company with power to act on its behalf and subject to its direction
      in
      the authentication and delivery of Debt Securities issued upon exchange or
      registration of transfer thereof as fully to all intents and purposes as though
      any such Authenticating Agent had been expressly authorized to authenticate
      and
      deliver Debt Securities; provided,
      that
      the Trustee shall have no liability to the Company for any acts or omissions
      of
      the Authenticating Agent with respect to the authentication and delivery of
      Debt
      Securities. Any such Authenticating Agent shall at all times be a banking
      corporation or national association organized and doing business under the
      laws
      of the United States or of any state or territory thereof or of the District
      of
      Columbia authorized under such laws to act as Authenticating Agent, having
      a
      combined capital and surplus of at least $50,000,000 and being subject to
      supervision or examination by federal, state, territorial or District of
      Columbia authority. If such banking corporation or national association
      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 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.

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

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

     

    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
      7.01.  Action
      by Securityholders.

     

    Whenever
      in this Indenture it is provided that the holders of a specified percentage
      in
      aggregate principal amount of the Debt Securities 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 Debt Securities voting in
      favor
      thereof at any meeting of such Securityholders duly called and held in
      accordance with the provisions of Article VIII, or (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 Debt Securities for the
      determination of Securityholders entitled to give such request, demand,
      authorization, direction, notice, consent, waiver or other action or revocation
      of the same, but the Company shall have no obligation to do so. If such a record
      date is fixed, such request, demand, authorization, direction, notice, consent,
      waiver or other action or revocation of the same may be given before or after
      the record date, but only the Securityholders of record at the close of business
      on the record date shall be deemed to be Securityholders for the purposes of
      determining whether Securityholders of the requisite proportion of outstanding
      Debt Securities have authorized or agreed or consented to such request, demand,
      authorization, direction, notice, 

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        
consent,
        waiver or other action or revocation of the same, and for that purpose the
        outstanding Debt Securities shall be computed as of the record date;
provided,
        however,
        that no
        such authorization, agreement or consent by such Securityholders on the record
        date shall be deemed effective unless it shall become effective pursuant
        to the
        provisions of this Indenture not later than six months after the record
        date.

    

     

    Section
      7.02.  Proof
      of Execution by Securityholders.

     

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

     

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

     

    Section
      7.03.  Who
      Are Deemed Absolute Owners.

     

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

     

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

     

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


     

    
      
        
        

      

      
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vote
        such
        Debt Securities and that the pledgee is not the Company or any such other
        obligor or Person directly or indirectly controlling or controlled by or
        under
        direct or indirect common control with the Company or any such other obligor.
        In
        the case of a dispute as to such right, any decision by the Trustee taken
        upon
        the advice of counsel shall be full protection to the
        Trustee.

    

     

    Section
      7.05.  Revocation
      of Consents; Future Holders Bound.

     

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

     

    ARTICLE
      VIII


     

    SECURITYHOLDERS’
      MEETINGS

     

    Section
      8.01.  Purposes
      of Meetings.

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
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    Section
      8.02.  Call
      of Meetings by Trustee.

     

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

     

    Section
      8.03.  Call
      of Meetings by Company or Securityholders.

     

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

     

    Section
      8.04.  Qualifications
      for Voting.

     

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

     

    Section
      8.05.  Regulations.

     

    Notwithstanding
      any other provisions of this Indenture, the Trustee may make such reasonable
      regulations as it may deem advisable for any meeting of Securityholders, in
      regard to proof of the holding of Debt Securities and of the appointment of
      proxies, and in regard to the appointment and duties of inspectors of votes,
      the
      submission and examination of proxies, certificates and other evidence of the
      right to vote, and such other matters concerning the conduct of the meeting
      as
      it shall deem appropriate.

     

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

     

    Subject
      to the provisions of Section 7.04, at any meeting each holder of Debt Securities
      with respect to which such meeting is being held or proxy therefor shall be
      entitled to 

     

    
      
        
        

      

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

    

     

    Section
      8.06.  Voting.

     

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

     

    Any
      record so signed and verified shall be conclusive evidence of the matters
      therein stated.

     

    Section
      8.07.  Quorum;
      Actions.

     

    The
      Persons entitled to vote a majority in outstanding principal amount of the
      Debt
      Securities shall constitute a quorum for a meeting of Securityholders;
provided,
      however,
      that if
      any action is to be taken at such meeting with respect to a consent, waiver,
      request, demand, notice, authorization, direction or other action which may
      be
      given by the holders of not less than a specified percentage in outstanding
      principal amount of the Debt Securities, the Persons holding or representing
      such specified percentage in outstanding principal amount of the Debt Securities
      will constitute a quorum. In the absence of a quorum within 30 minutes of the
      time appointed for any such meeting, the meeting shall, if convened at the
      request of Securityholders, be dissolved. In any other case the meeting may
      be
      adjourned for a period of not less than 10 days as determined by the permanent
      chairman of the meeting prior to the adjournment of such meeting. In the absence
      of a quorum at any such adjourned meeting, such adjourned meeting may be further
      adjourned for a period of not less than 10 days as determined by the permanent
      chairman of the meeting prior to the adjournment of such adjourned
      meeting.

     

    
      
        
        

      

      
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Notice
        of
        the reconvening of any adjourned meeting shall be given as provided in Section
        8.02, except that such notice need be given only once not less than five
        days
        prior to the date on which the meeting is scheduled to be reconvened. Notice
        of
        the reconvening of an adjourned meeting shall state expressly the percentage,
        as
        provided above, of the outstanding principal amount of the Debt Securities
        which
        shall constitute a quorum.

    

     

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

     

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

     

    ARTICLE
      IX


     

    SUPPLEMENTAL
      INDENTURES

     

    Section
      9.01.  Supplemental
      Indentures without Consent of Securityholders.

     

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

     

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

     

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

     

    
      
        
        

      

      
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    (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 adversely affect the interests of the holders of
      the
      Debt Securities;

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
      9.02.  Supplemental
      Indentures with Consent of Securityholders.

     

    With
      the
      consent (evidenced as provided in Section 7.01) of the holders of not less
      than
      a majority in aggregate principal amount of the Debt Securities at the time
      outstanding affected by such supplemental indenture (voting as a class), the
      Company, when authorized by a Board Resolution, and the Trustee may from time
      to
      time and at any time enter into an indenture or indentures supplemental hereto
      (which shall conform to the provisions of the Trust Indenture Act, then in
      effect, applicable to indentures qualified thereunder) for the purpose of adding
      any

     

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        
provisions
        to or changing in any manner or eliminating any of the provisions of this
        Indenture or of any supplemental indenture or of modifying in any manner
        the
        rights of the holders of the Debt Securities; provided,
        however,
        that no
        such supplemental indenture shall without such consent of the holders of
        each
        Debt Security then outstanding and affected thereby (i) extend the
        fixed
        maturity of any Debt Security, 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 Debt Securities, or impair or affect
        the right of any Securityholder to institute suit for payment thereof or
        impair
        the right of repayment, if any, at the option of the holder, or (ii) reduce
        the aforesaid percentage of Debt Securities the holders of which are required
        to
        consent to any such supplemental indenture; and provided,
        further,
        that if
        the Debt Securities are held by the Trust or a trustee of such trust, such
        supplemental indenture shall not be effective until the holders of a majority
        in
        liquidation preference of the Trust Securities shall have consented to such
        supplemental indenture; provided,
        further,
        that if
        the consent of the Securityholder of each outstanding Debt Security is required,
        such supplemental indenture shall not be effective until each holder of the
        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 Trustee may
      in
      its discretion, but shall not be obligated to, enter into such supplemental
      indenture.

     

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

     

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

     

    Section
      9.03.  Effect
      of Supplemental Indentures.

     

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

     

    
      
        
        

      

      
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    Section
      9.04.  Notation
      on Debt Securities.

     

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

     

    Section
      9.05.  Evidence
      of Compliance of Supplemental Indenture to be Furnished to
      Trustee.

     

    The
      Trustee, subject to the provisions of Sections 6.01 and 6.02, shall,
      in
      addition to the documents required by Section 14.06, receive an Officers’
      Certificate and an Opinion of Counsel as conclusive evidence that any
      supplemental indenture executed pursuant hereto complies with the requirements
      of this Article IX. The Trustee shall receive an Opinion of Counsel as
      conclusive evidence that any supplemental indenture executed pursuant to this
      Article IX is authorized or permitted by, and conforms to, the terms of this
      Article IX and that it is proper for the Trustee under the provisions of this
      Article IX to join in the execution thereof.

     

    ARTICLE
      X

     

    REDEMPTION
      OF SECURITIES

     

    Section
      10.01.  Optional
      Redemption.

     

    At
      any
      time the Company shall have the right, subject to the receipt by the Company
      of
      prior approval from the Federal Reserve, if then required under applicable
      capital guidelines or policies of the Federal Reserve, to redeem the Debt
      Securities, in whole or in part, on any February 23, May 23, August 23 and
      November 23 on or after November 23, 2010 (the “Redemption Date”), at the
      Redemption Price.

     

    Section
      10.02.  Special
      Event Redemption.

     

    If
      a
      Special Event shall occur and be continuing, the Company shall have the right,
      subject to the receipt by the Company of prior approval from the Federal Reserve
      if then required under applicable capital guidelines or policies of the Federal
      Reserve, to redeem the Debt Securities, in whole but not in part, at any time
      within 90 days following the occurrence of such Special Event (the “Special
      Redemption Date”), at the Special Redemption Price.

     

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

     

    In
      case
      the Company shall desire to exercise the right to redeem all, or, as the case
      may be, any part of the Debt Securities, it shall fix a date for redemption
      and
      shall mail a notice of such redemption at least 30 and not more than 60 days
      prior to the date fixed for redemption to the holders of Debt Securities so
      to
      be redeemed as a whole or in part at their last addresses as 

     

    
      
        
        

      

      
        -48-

        
          

        

      

      
        
        
the
        same
        appear on the Debt Security Register. Such mailing shall be by first class
        mail.
        The notice if mailed in the manner herein provided shall be conclusively
        presumed to have been duly given, whether or not the holder receives such
        notice. In any case, failure to give such notice by mail or any defect in
        the
        notice to the holder of any Debt Security designated for redemption as a
        whole
        or in part shall not affect the validity of the proceedings for the redemption
        of any other Debt Security.

    

     

    Each
      such
      notice of redemption shall specify the CUSIP number, if any, of the Debt
      Securities to be redeemed, the date fixed for redemption, the redemption price
      at which Debt Securities are to be redeemed, the place or places of payment,
      that payment will be made upon presentation and surrender of such Debt
      Securities, that interest accrued to the date fixed for redemption will be
      paid
      as specified in said notice, and that on and after said date interest thereon
      or
      on the portions thereof to be redeemed will cease to accrue. If less than all
      the Debt Securities are to be redeemed the notice of redemption shall specify
      the numbers of the Debt Securities to be redeemed. In case the Debt Securities
      are to be redeemed in part only, the notice of redemption shall state the
      portion of the principal amount thereof to be redeemed and shall state that
      on
      and after the date fixed for redemption, upon surrender of such Debt Security,
      a
      new Debt Security or Debt Securities in principal amount equal to the unredeemed
      portion thereof will be issued.

     

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

     

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

     

    Section
      10.04.  Payment
      of Debt Securities Called for Redemption.

     

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

     

    
      
        
        

      

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

     

    ARTICLE
      XI


     

    CONSOLIDATION,
      MERGER, SALE, CONVEYANCE AND LEASE

     

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

     

    Nothing
      contained in this Indenture or in the Debt Securities shall prevent any
      consolidation or merger of the Company with or into any other corporation or
      corporations (whether or not affiliated with the Company) or successive
      consolidations or mergers in which the Company or its successor or successors
      shall be a party or parties, or shall prevent any sale, conveyance, transfer
      or
      other disposition of the property or capital stock of the Company or its
      successor or successors as an entirety, or substantially as an entirety, to
      any
      other corporation (whether or not affiliated with the Company, or its successor
      or successors) authorized to acquire and operate the same; provided,
      however,
      that
      the Company hereby covenants and agrees that, upon any such consolidation,
      merger (where the Company is not the surviving corporation), sale, conveyance,
      transfer or other disposition, the due and punctual payment of all payments
      due
      on all of the Debt Securities 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 reasonably 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 property or capital stock.

     

    Section
      11.02.  Successor
      Entity to be Substituted.

     

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

     

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        
Authenticating
        Agent for authentication, and any Debt Securities which such successor entity
        thereafter shall cause to be signed and delivered to the Trustee or the
        Authenticating Agent for that purpose. All the Debt Securities so issued
        shall
        in all respects have the same legal rank and benefit under this Indenture
        as the
        Debt Securities theretofore or thereafter issued in accordance with the terms
        of
        this Indenture as though all of such Debt Securities had been issued at the
        date
        of the execution hereof.

    

     

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

     

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

     

    ARTICLE
      XII


     

    SATISFACTION
      AND DISCHARGE OF INDENTURE

     

    Section
      12.01.  Discharge
      of Indenture.

     

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

     

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        
any
        costs
        or expenses thereafter reasonably and properly incurred by the Trustee in
        connection with this Indenture or the Debt Securities.

    

     

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

     

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

     

    Section
      12.03.  Paying
      Agent to Repay Moneys Held.

     

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

     

    Section
      12.04.  Return
      of Unclaimed Moneys.

     

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

     

    ARTICLE
      XIII

     

    IMMUNITY
      OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

     

    Section
      13.01.  Indenture
      and Debt Securities Solely Corporate Obligations.

     

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

     

    
      
        
        

      

      
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    ARTICLE
      XIV


     

    MISCELLANEOUS
      PROVISIONS

     

    Section
      14.01.  Successors.

     

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

     

    Section
      14.02.  Official
      Acts by Successor Entity.

     

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

     

    Section
      14.03.  Surrender
      of Company Powers.

     

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

     

    Section
      14.04.  Addresses
      for Notices, etc.

     

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

     

    483
      Main
      Street 

    Harleysville,
      Pennsylvania 

    19438
      

    Attention:
      George S. Rapp 

     

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

     

    Rodney
      Square North

    1100
      North Market Street

    Wilmington,
      Delaware 19890

    Attention:
      Corporate Capital Markets

     

    Section
      14.05.  Governing
      Law.

     

    
      
        
        

      

      
        -53-

        
          

        

      

      
        
        

      

    

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

     

    Section
      14.06.  Evidence
      of Compliance with Conditions Precedent.

     

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

     

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

     

    Section
      14.07.  Business
      Day Convention..

     

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

     

    Section
      14.08.  Table
      of Contents, Headings, etc.

     

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

     

    Section
      14.09.  Execution
      in Counterparts.

     

    
      
        
        

      

      
        -54-

        
          

        

      

      
        
        

      

    

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

     

    Section
      14.10.  Separability.

     

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

     

    Section
      14.11.  Assignment.

     

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

     

    Section
      14.12.  Acknowledgment
      of Rights.

     

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

     

    ARTICLE
      XV


     

    SUBORDINATION
      OF DEBT SECURITIES

     

    Section
      15.01.  Agreement
      to Subordinate.

     

    
      
        
        

      

      
        -55-

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    Section
      15.02.  Default
      on Senior Indebtedness.

     

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

     

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

     

    Section
      15.03.  Liquidation;
      Dissolution; Bankruptcy.

     

    Upon
      any
      payment by the Company or distribution of assets of the Company of any kind
      or
      character, whether in cash, property or securities, to creditors upon any
      dissolution or winding-up or liquidation or reorganization of the Company,
      whether voluntary or involuntary or in bankruptcy, insolvency, receivership
      or
      other proceedings, all amounts due upon all Senior Indebtedness of the Company
      shall first be paid in full, or payment thereof provided for in money in
      accordance with its terms, before any payment is made by the Company on the
      Debt
      Securities; and upon any such dissolution or winding-up or liquidation or
      reorganization, any payment by the Company, or distribution of assets of the
      Company of any kind or character, 

     

    
      
        
        

      

      
        -56-

        
          

        

      

      
        
        
whether
        in cash, property or securities, to which the Securityholders or the Trustee
        would be entitled to receive from the Company, except for the provisions
        of this
        Article XV, shall be paid by the Company, or by any receiver, trustee
        in
        bankruptcy, liquidating trustee, agent or other Person making such payment
        or
        distribution, or by the Securityholders or by the Trustee under this Indenture
        if received by them or it, directly to the holders of Senior Indebtedness
        of the
        Company (pro rata to such holders on the basis of the respective amounts
        of
        Senior Indebtedness held by such holders, as calculated by the Company) or
        their
        representative or representatives, or to the trustee or trustees under any
        indenture pursuant to which any instruments evidencing such Senior Indebtedness
        may have been issued, as their respective interests may appear, to the extent
        necessary to pay such Senior Indebtedness in full, in money or money’s worth,
        after giving effect to any concurrent payment or distribution to or for the
        holders of such Senior Indebtedness, before any payment or distribution is
        made
        to the Securityholders 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 or
      any
      Securityholder before all Senior Indebtedness of the Company is paid in full,
      or
      provision is made for such payment in money in accordance with its terms, such
      payment or distribution shall be held in trust for the benefit of and shall
      be
      paid over or delivered to the holders of such Senior Indebtedness or their
      representative or representatives, or to the trustee or trustees under any
      indenture pursuant to which any instruments evidencing such Senior Indebtedness
      may have been issued, as their respective interests may appear, as calculated
      by
      the Company, for application to the payment of all Senior Indebtedness of the
      Company remaining unpaid to the extent necessary to pay such Senior Indebtedness
      in full in money in accordance with its terms, after giving effect to any
      concurrent payment or distribution to or for the benefit of the holders of
      such
      Senior Indebtedness.

     

    For
      purposes of this Article XV, the words “cash, property or securities” shall
      not be deemed to include shares of stock of the Company as reorganized or
      readjusted, or securities of the Company or any other corporation provided
      for
      by a plan of reorganization or readjustment, the payment of which is
      subordinated at least to the extent provided in this Article XV with respect
      to
      the Debt Securities to the payment of all Senior Indebtedness of the Company,
      that may at the time be outstanding, provided,
      that
      (a) such Senior Indebtedness is assumed by the new corporation, if any,
      resulting from any such reorganization or readjustment, and (b) the rights
      of
      the holders of such Senior Indebtedness are not, without the consent of such
      holders, altered by such reorganization or readjustment. The consolidation
      of
      the Company with, or the merger of the Company into, another corporation or
      the
      liquidation or dissolution of the Company following the conveyance or transfer
      of its property as an entirety, or substantially as an entirety, to another
      corporation upon the terms and conditions provided for in Article XI
      of
      this Indenture shall not be deemed a dissolution, winding-up, liquidation or
      reorganization for the purposes of this Section 15.03 if such other corporation
      shall, as a part of such consolidation, merger, conveyance or transfer, comply
      with the conditions stated in Article XI of this Indenture. Nothing
      in
      Section 15.02 or in this Section 15.03 shall apply to claims of, or payments
      to,
      the Trustee under or pursuant to Section 6.06 of this Indenture.

     

    Section
      15.04.  Subrogation.

     

    
      
        
        

      

      
        -57-

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    Section
      15.05.  Trustee
      to Effectuate Subordination.

     

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

     

    Section
      15.06.  Notice
      by the Company.

     

    
      
        
        

      

      
        -58-

        
          

        

      

      
        
        

      

    

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

     

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

     

    Section
      15.07.  Rights
      of the Trustee; Holders of Senior Indebtedness.

     

    The
      Trustee in its individual capacity shall be entitled to all the rights set
      forth
      in this Article XV in respect of any Senior Indebtedness at any time held by
      it,
      to the same extent as any other holder of Senior Indebtedness, and nothing
      in
      this Indenture or any Additional Provisions shall deprive the Trustee of any
      of
      its rights as such holder.

     

    With
      respect to the holders of Senior Indebtedness of the Company, the Trustee
      undertakes to perform or to observe only such of its covenants and obligations
      as are specifically set forth in this Article XV, and no implied covenants
      or
      obligations with respect to the holders of such Senior Indebtedness shall be
      read into this Indenture or any Additional Provisions against the Trustee.
      The
      Trustee shall not owe or be deemed to owe any fiduciary duty to the holders
      of
      such Senior Indebtedness and, subject to the provisions of Article VI of this
      Indenture, the

     

    
      
        
        

      

      
        -59-

        
          

        

      

      
        
        
Trustee
        shall not be liable to any holder of such Senior Indebtedness if it shall
        pay
        over or deliver to Securityholders, the Company or any other Person money
        or
        assets to which any holder of such Senior Indebtedness shall be entitled
        by
        virtue of this Article XV or otherwise.

    

     

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

     

    Section
      15.08.  Subordination
      May Not Be Impaired.

     

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

     

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

     

    Wilmington
      Trust Company, in its capacity as Trustee, hereby accepts the trusts in this
      Indenture declared and provided, upon the terms and conditions herein above
      set
      forth.


     


    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

        
        

      

    



    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.

     

    HARLEYSVILLE
      NATIONAL CORPORATION 

     

    By 
      /s/
      George S. Rapp 

     

    Name:
      George S. Rapp 

                                         
Title:
      Chief Financial Officer


     

    WILMINGTON
      TRUST COMPANY, as Trustee

     

    By 
      /s/
      Geoffrey J. Lewis 

    Name:
      Geoffrey J. Lewis

    Title:
      Financial Services Officer

     

    


    



    
      
        
          
            	
                     

                  	 	 


          

          


        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    EXHIBIT
      A

    


    


    FORM
      OF FIXED/FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITY DUE
      2035

     

    [FORM
      OF FACE OF SECURITY]

     

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

     

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

     

    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 

     

    
      
        
        

      

      
        A-1-1

        
          

        

      

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

    

     

    IN
      CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE
      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.

     

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

     

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

     


    
      
        
        

      

      
        A-1-2

        
          

        

      

      
        
        

      

    


    Fixed/Floating
      Rate Junior Subordinated Debt Security due 2035

     

    of

     

    HARLEYSVILLE
      NATIONAL CORPORATION 

     

    Harleysville
      National Corporation, a bank holding company incorporated in Pennsylvania (the
      “Company”), for value received promises to pay to Wilmington Trust Company, not
      in its individual capacity but solely as Institutional Trustee for HNC Statutory
      Trust III, a Delaware statutory trust (the “Holder”), or registered assigns, the
      principal sum of    
      Dollars
      ($ ) on November 23, 2035 and to pay interest on said principal sum from
      September 28, 2005, or from the most recent interest payment date (each
      such date, an “Interest Payment Date”) to which interest has been paid or duly
      provided for, quarterly (subject to deferral as set forth herein) in arrears
      on
      February 23, May 23, August 23 and November 23 of each year commencing November
      23, 2005, at a fixed per annum rate of interest equal to 5.67% through the
      end
      of the Fixed Period (as defined in the Indenture) and a variable per annum
      rate
      of interest equal to LIBOR (as defined in the Indenture), as determined on
      the
      LIBOR Determination Date (as defined in the Indenture) for such Interest Period,
      plus 1.40% for each Interest Period thereafter (collectively, the “Interest
      Rate”) until the principal hereof shall have become due and payable, and on any
      overdue principal and (without duplication and to the extent that payment of
      such interest is enforceable under applicable law) on any overdue installment
      of
      interest at an annual rate equal to the Interest Rate in effect for each such
      Extension Period compounded quarterly. The amount of interest payable on any
      Interest Payment Date shall be computed on the basis of a 360-day year and
      the
      actual number of days elapsed in such Interest Period. Notwithstanding
      anything to the contrary contained herein, if any Interest Payment Date, other
      than the Maturity Date, any Redemption Date or the Special Redemption Date,
      falls on a day that is not a Business Day, then any interest payable will be
      paid on, and such Interest Payment Date will be moved to, the next succeeding
      Business Day. During the Fixed Period, no additional interest will accrue for
      each day that such payment is delayed as a result thereof. Thereafter,
      additional interest will accrue for each day that such payment is delayed as
      a
      result thereof. If the Maturity Date, any Redemption Date or the Special
      Redemption Date falls on a day that is not a Business Day, then the principal,
      premium, if any, and/or interest payable on such date will be paid on the next
      succeeding Business Day, and no additional interest will accrue in respect
      of
      such payment made on such next succeeding Business Day.
      The
      interest installment so payable, and punctually paid or duly provided for,
      on
      any Interest Payment Date will, as provided in the Indenture, be paid to the
      Person in whose name this Debt Security (or one or more Predecessor Securities,
      as defined in said Indenture) is registered at the close of business on the
      regular record date for such interest installment, except that interest and
      any
      Deferred Interest payable on the Maturity Date shall be paid to the Person
      to
      whom principal is paid. Any such interest installment not punctually paid or
      duly provided for shall forthwith cease to be payable to the registered holders
      on such regular record date and may be paid to the Person in whose name this
      Debt Security (or one or more Predecessor Debt Securities) is registered at
      the
      close of business on a special record date to be fixed by the Trustee for the
      payment of such defaulted interest, notice whereof shall be given to the
      registered holders of the Debt Securities not less than 10 days prior to such
      special record date, all as more fully provided in the Indenture. The principal
      of and interest on this Debt Security shall be payable at the office or agency
      of the Trustee (or other paying agent appointed by the Company) maintained
      for
      that 

     

    
      
        
        

      

      
        A-1-3

        
          

        

      

      
        
        
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 at the option of the Company by check mailed
        to
        the registered holder at such address as shall appear in the Debt Security
        Register or by wire transfer to an account appropriately designated by the
        holder hereof. Notwithstanding the foregoing, so long as the holder of this
        Debt
        Security is the Institutional Trustee, the payment of the principal of and
        interest on this Debt Security 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 pursuant to Sections 5.01(b), (e) or (f) of the Indenture
      has occurred and is continuing, the Company shall have the right, from time
      to
      time and without causing an Event of Default, to defer payments of interest
      on
      the Debt Securities by extending the interest payment period on the Debt
      Securities at any time and from time to time during the term of the Debt
      Securities, for up to 20 consecutive quarterly periods (each such extended
      interest payment period, an “Extension Period”), during which Extension Period
      no interest shall be due and payable (except any Additional Interest that may
      be
      due and payable). During any Extension Period, interest will continue to accrue
      on the Debt Securities, and interest on such accrued interest (such accrued
      interest and interest thereon referred to herein as “Deferred Interest”) will
      accrue, at the Interest Rate, compounded quarterly from the date such Deferred
      Interest would have been payable were it not for the Extension Period, both
      to
      the extent permitted by law. No Extension Period may end on a date other than
      an
      Interest Payment Date. At the end of any such Extension Period the Company
      shall
      pay all Deferred Interest then accrued and unpaid on the Debt Securities;
provided,
      however,
      that no
      Extension Period may extend beyond the Maturity Date, Redemption Date or Special
      Redemption Date and provided,
      further,
      however,
      during
      any such Extension Period, the Company may not (A) declare or pay any dividends
      or distributions on, or redeem, purchase, acquire, or make a liquidation payment
      with respect to, any of the Company’s capital stock, (B) make any payment on or
      repay, repurchase or redeem any debt securities of the Company that rank
pari
      passu
      in all
      respects with or junior in interest to the Debt Securities or
      (C)
      make any payment under any guarantees of the Company that rank pari
      passu in
      all
      respects with or junior in interest to the Capital Securities Guarantee (other
      than (a) repurchases, redemptions or other acquisitions of shares of capital
      stock of the Company (I) in connection with any employment contract, benefit
      plan or other similar arrangement with or for the benefit of one or more
      employees, officers, directors or consultants, (II) in connection with a
      dividend reinvestment or stockholder stock purchase plan or (III) in connection
      with the issuance of capital stock of the Company (or securities convertible
      into or exercisable for such capital stock) as consideration in an acquisition
      transaction entered into prior to the occurrence of (I), (II) or (III) above,
      (b) as a result of any exchange or conversion of any class or series of the
      Company’s capital stock (or any capital stock of a subsidiary of the Company)
      for any class or series of the Company’s capital stock or of any class or series
      of the Company’s indebtedness for any class or series of the Company’s capital
      stock, (c) the purchase of fractional interests in shares of the Company’s
      capital stock pursuant to the conversion or exchange provisions of such capital
      stock or the security being converted or exchanged, (d) any declaration of
      a
      dividend in connection with any stockholder’s rights plan, or the issuance of
      rights, stock or other property under any stockholder’s rights plan, or the
      redemption or repurchase of rights pursuant thereto or (e) any dividend in
      the
      form of stock, warrants, options or other rights where the dividend stock or
      the
      stock issuable upon exercise of 

     

    
      
        
        

      

      
        A-1-4

        
          

        

      

      
        
        
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 in interest to such stock).
        Prior to
        the termination of any Extension Period, the Company may further extend such
        period, provided,
        that
        such period together with all such previous and further consecutive extensions
        thereof shall not exceed 20 consecutive quarterly periods, or extend beyond
        the
        Maturity Date. Upon the termination of any Extension Period and upon the
        payment
        of all Deferred Interest, the Company may commence a new Extension Period,
        subject to the foregoing requirements. No interest or Deferred Interest shall
        be
        due and payable during an Extension Period, except at the end thereof, but
        interest shall accrue upon each installment of interest that would otherwise
        have been due and payable during such Extension Period until such installment
        is
        paid. The Company must give the Trustee notice of its election to begin such
        Extension Period at least one Business Day prior to the date such interest
        is
        payable, but in any event not later than the related regular record
        date.

    

     

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

     

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

     

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

     

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

     

    This
      Debt
      Security may contain more than one counterpart of the signature page and this
      Debt Security may be executed and authenticated by the affixing of the signature
      of a proper officer of the Company, and the signature of the Trustee providing
      authentication, to any of such counterpart signature pages. All of such
      counterpart signature pages shall be read as though one, and they shall have
      the
      same force and effect as though the Company had executed, and the Trustee had
      authenticated, a single signature page.

     


    
      
        
        

      

      
        A-1-5

        
          

        

      

      
        
        

      

    


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

     

    HARLEYSVILLE
      NATIONAL CORPORATION 

     

    By:   

     

    Name:
      George S. Rapp 

    Title:
      Chief Financial Officer 

     

    Dated:
      __________________, ________

     

    CERTIFICATE
      OF AUTHENTICATION

     

    This
      certificate represents Debt Securities referred to in the within-mentioned
      Indenture.

     

    WILMINGTON
      TRUST COMPANY, not in its individual capacity but solely as the
      Trustee

     

    By:   

     

    
      	 	 	
              Authorized
                Officer

            


    

     

    Dated:
      __________________, ______

     

    


     

    


     


    
      
        
          
            	
                     

                  	
                    A-1-6

                  	 


          

          


        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    [FORM
      OF REVERSE OF SECURITY]

     

    This
      Debt
      Security is one of a duly authorized series of Debt Securities of the Company,
      all issued or to be issued pursuant to an Indenture (the “Indenture”), dated as
      of September 28, 2005, duly executed and delivered between the Company and
      Wilmington Trust Company, as Trustee (the “Trustee”), to which Indenture and all
      indentures supplemental thereto reference is hereby made for a description
      of
      the rights, limitations of rights, obligations, duties and immunities thereunder
      of the Trustee, the Company and the holders of the Debt Securities (referred
      to
      herein as the “Debt Securities”) of which this Debt Security is a part. The
      summary of the terms of this Debt Security contained herein does not purport
      to
      be complete and is qualified by reference to the Indenture.

     

    Upon
      the
      occurrence and continuation of a Tax Event, an Investment Company Event or
      a
      Capital Treatment Event, this Debt Security may become due and payable, in
      whole
      but not in part, at any time, within 90 days following the occurrence of such
      Tax Event, Investment Company Event or Capital Treatment Event (the “Special
      Redemption Date”), as the case may be, at the Special Redemption Price. The
      Company shall also have the right to redeem this Debt Security at the option
      of
      the Company, in whole or in part, on any February 23, May 23, August 23 and
      November 23 on or after November 23, 2010 (a “Redemption Date”), at the
      Redemption Price.

     

    Any
      redemption pursuant to the preceding paragraph will be made, subject to the
      receipt by the Company of prior approval from the Board of Governors of the
      Federal Reserve System (the “Federal Reserve”) if then required under applicable
      capital guidelines or policies of the Federal Reserve, upon not less than 30
      days’ nor more than 60 days’ notice. If the Debt Securities are only partially
      redeemed by the Company, the Debt Securities will be redeemed pro
      rata or
      by lot
      or by any other method utilized by the Trustee.

     

    “Redemption
      Price” means 100% of the principal amount of the Debt Securities being redeemed
plus
      accrued and unpaid interest on such Debt Securities to the Redemption Date
      or,
      in the case of a redemption due to the occurrence of a Special Event, to the
      Special Redemption Date if such Special Redemption Date is on or after November
      23, 2010.

     

    “Special
      Redemption Price” means, with respect to the redemption of any Debt Security
      following a Special Event, an amount in cash equal to the percentage for the
      principal amount of the Debt Securities that is specified below for the Special
      Redemption Date plus unpaid interest accrued thereon to the Special Redemption
      Date:

     

    
      	
              Special
                Event Redemption During Period Beginning On 

            	
              Percentage
                of Principal Amount

            
	
              September
                28, 2005

            	
              104.40

            
	
              November
                23, 2006

            	
              103.52

            
	
              November
                23, 2007

            	
              102.64

            
	
              November
                23, 2008

            	
              101.76

            
	
              November
                23, 2009

            	
              100.88

            
	
              November
                23, 2010

            	
              100.00

            


    

     

     

    
      
        
        

      

      
        A-1-7

        
          

        

      

      
        
        

      

    

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

     

    In
      case
      an Event of Default, as defined in the Indenture, shall have occurred and be
      continuing, the principal of all of the Debt Securities may be declared due
      and
      payable, and upon such declaration of acceleration shall become due and payable,
      in the manner, with the effect and subject to the conditions provided in the
      Indenture.

     

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

     

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

     

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

     

    
      
        
        

      

      
        A-1-8

        
          

        

      

      
        
        
made
        for
        any such registration of transfer, but the Company may require payment of
        a sum
        sufficient to cover any tax or other governmental charge payable in relation
        thereto.

    

     

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

     

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

     

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

     

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

     

    THE
      LAW
      OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THE DEBT SECURITIES,
      WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

     


    
      
        
          
            	
                     

                  	
                    A-1-9

                  	 


          

          


        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    
                                                                                EXHIBIT
    B


    FORM
      OF
      CERTIFICATE

    OF
      OFFICER

    OF

    HARLEYSVILLE
      NATIONAL CORPORATION 

    Pursuant
      to Section 3.05 of the Indenture between Harleysville National Corporation,
      as
      issuer (the “Company”), and Wilmington Trust Company, as trustee, dated as of
      September 28, 2005 (as amended or supplemented from time to time, the
“Indenture”), the undersigned certifies that he/she is a principal executive
      officer, principal financial officer or principal accounting officer of the
      Company and in the course of the performance by the undersigned of his/her
      duties as an officer of the Company, the undersigned would normally have
      knowledge of any default by the Company in the performance of any covenants
      contained in the Indenture, and the undersigned hereby further certifies that
      he/she has no knowledge of any such default for the year 20__ [,except as
      follows: specify
      each such default and the nature thereof].
      

    


    Capitalized
      terms used herein, and not otherwise defined herein, have the respective
      meanings ascribed thereto in the Indenture.

    


    IN
      WITNESS WHEREOF, the undersigned has executed this Certificate as of
      ___________, 20__.

    


    
      	 	
              _______________________________

            	 
	 	
              Name:
                ______________________

              Title:
                _______________________

            	 


    

    


     


    
      
        
          
            	
                     

                  	
                    B-1-1