Document:

Exhibit 4.8 - Fourth Amendment to Second Amended and Restated Credit Agreement

FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

        THIS FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the "Amendment"), dated as of November 2, 2005 is among ELIZABETH ARDEN, INC., a Florida Corporation (the "Borrower"), the banks listed on the signature pages hereto (the "Banks"), JPMORGAN CHASE BANK, N.A. (formerly JPMorgan Chase Bank), as the administrative agent (the "Administrative Agent"), and Bank OF AMERICA, N.A. (successor in interest by merger to Fleet National Bank), as the collateral agent (the "Collateral Agent").

RECITALS:

        A.    The Borrower, the Administrative Agent, the Collateral Agent and the banks party thereto have entered into that certain Second Amended and Restated Credit Agreement dated as of December 24, 2002 (as the same has been modified by that certain First Amendment to Second Amended and Restated Credit Agreement dated February 25, 2004, that certain Second Amendment to Second Amended and Restated Credit Agreement dated June 2, 2004, that certain Third Amendment to Second Amended and Restated Credit Agreement dated September 30, 2004 and as the same may hereafter be amended or otherwise modified from time to time, the "Agreement").

        B.    On September 30, 2005, General Electric Capital Corporation assigned all of its Commitment to JPMorgan Chase Bank, N.A. and Wachovia Bank, National Bank.

        C.    Immediately prior to the effectiveness of this Amendment, LaSalle Business Credit, L.L.C. (successor by merger to LaSalle Business Credit, Inc.) assigned all of its Commitment to National City Business Credit, Inc. (successor to The Provident Bank) and The CIT Group/Business Credit, Inc.

        D.    The Borrower and the Guarantors have requested that the Agents and the Banks amend certain provisions of the Agreement and the Administrative Agent, the Collateral Agent, and the Banks have agreed to do so on and subject to the terms set forth herein.

        NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows effective as of the date hereof unless otherwise indicated:

Definitions

        Section 1.1.    Definitions.  Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the same meanings as in the Agreement, as amended hereby.

Amendments

        Section 2.1.    Amendment to Date References.  All references to (a) "May 16" in the Agreement shall be amended to read "June 1"; (b) "November 15" in the Agreement shall be amended to read "November 30"; (c) "November 16" in the Agreement shall be amended to read "December 1"; and (d) "May 15" in the Agreement (except in the definition of Senior Notes) shall be amended to read "May 31".

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        Section 2.2.    Amendment to Existing Definitions in Section 1.01.  The following definitions contained in Section 1.01 of the Agreement are amended in their respective entireties to read as follows:
        "Applicable Margin" means, with respect to either Type of Loan, the applicable margin (expressed in basis points) in the column below for the applicable Type of Loan and opposite the Debt Service Pricing Ratio set forth in the table below that corresponds with the actual Debt Service Pricing Ratio set forth in the most recent Compliance Certificate:

	
Tier
	
Debt Service Pricing Ratio
	
LIBOR Loans
	
Base 

Rate Loans

	
	
	
	

	
I
	
Greater than 4.00:1.00
	
100.0
	
0.0

	
II
	
Less than or equal to 4.00:1.0 but greater than 3.00:1.00
	
125.0
	
0.0

	
III
	
Less than or equal to 3.00:1.00 but greater than 2.00:1.00
	
150.0
	
0.0

	
IV
	
Less than or equal to 2.00:1.00
	
175.0
	
0.0

Each Applicable Margin shall be determined by reference to Tier II for the period from November 2, 2005 until the first business day of the month following the day when the Compliance Certificate required in connection with the monthly financial statements delivered under Section 5.01(e) for each month end which corresponds with the end of each fiscal quarter end, beginning with such financial statements delivered for the month ended as of March 31, 2006. On such date, each Applicable Margin shall change in accordance with the Debt Service Pricing Ratio set forth therein and the table set forth above. Thereafter, each Applicable Margin shall change effective commencing on the first business day of the month following the date when a Compliance Certificate required by Section 5.01(c) is delivered, such change to be made in accordance with the Debt Service Pricing Ratio set forth therein and the table set forth above; provided, however, if any Compliance Certificate is not received by the date required by Section 5.01(c), the Applicable Margins shall revert to Tier IV until delivery of the next Compliance Certificate.

        "Capital Expenditures" shall mean, with respect to any Person, all net expenditures of such Person for assets which are or should be capitalized, plus the fair value of any Capitalized Lease, less any cash proceeds received from the disposition of any asset permitted by Section 5.11(b).

        "Commitment" means, with respect to a Bank, the obligation of such Bank to make advances of funds and purchase participation interests in Letters of Credit in the aggregate principal or face amount at any time outstanding not to exceed the amount set forth opposite such Bank's name under the column titled "Commitment" on Schedule 1.01 hereto (or, in the case of an Assignee, in its Assignment and Assumption Agreement), as such amount may be: (a) reduced from time to time pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.18, and (c) adjusted to reflect assignments pursuant to Section 9.06. As of November 2, 2005, the aggregate amount of the Commitments is $200,000,000.

        "Commitment Fee Rate" means a rate (expressed in basis points) equal to 25.0.

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        "Debt Service Pricing Ratio" means, as of any fiscal quarter end, the ratio of the following calculated for the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP as of the end of such fiscal quarter for the preceding twelve months:
          (a)    the sum of (i) Consolidated EBITDA minus (ii) Capital Expenditures which were not financed with Indebtedness permitted under clauses (viii), (ix) or (x) of the definition of Permitted Indebtedness; minus (iii) all income and franchise taxes paid in cash; to 

          (b)    the sum of: (i) Consolidated Net Interest Expense; plus (ii) regularly scheduled principal payments made in respect of Indebtedness during such twelve month period; plus (iii) all cash dividends paid on stock of the Borrower during such period.

        "Permitted Acquisition" means an Acquisition in which each of the following conditions are satisfied:

                 (i)    No Default then exists or would arise from the consummation of such Acquisition.

                 (ii)    Such Acquisition shall have been approved by the Board of Directors of the Person (or similar governing body if such Person is not a corporation) which is the subject of such Acquisition and such Person shall not have announced that it will oppose such Acquisition or shall not have commenced any action which alleges that such Acquisition will violate applicable law.

                 (iii)    The Borrower shall have furnished the Administrative Agent prior notice of such intended Acquisition immediately following approval by its Board of Directors (provided, that no such prior notice shall be required for any Acquisition in which the total consideration paid is less than $5,000,000) and shall have furnished the Administrative Agent with such information regarding the proposed Acquisition as the Administrative Agent reasonably requested so long as such information is readily available.

                 (iv)    The majority of any assets acquired shall be utilized in, and if the Acquisition involves a merger, consolidation or stock acquisition, the Person which is the subject of such Acquisition shall be engaged in, the same general type of business as now conducted by the Borrower or its Subsidiaries.

                  (v)    Either (A) the sum of the total consideration paid for all Acquisitions consummated since September 30, 2004 other than the Acquisitions completed under the permissions of the following subclause (B) plus the total consideration proposed to be paid for the Acquisition in question does not exceed $35,000,000 or (B) no earlier than 30 days prior to the anticipated closing of the Acquisition, the Borrower delivers to the Administrative Agent a certificate which demonstrates compliance with the following test and shows in reasonable detail satisfactory to the Administrative Agent the good faith estimate required thereby:
                  (I)    if the Acquisition is consummated during the period from and including June 1 to and including November 30, then the sum of the following, as reasonably estimated by the Borrower in good faith, must equal or 

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exceed $25,000,000: (1) the sum of the balances of the Borrower's domestic cash, domestic cash equivalents and Borrowing Base Capacity as of the anticipated closing date; minus (2) the total cash consideration to be paid for the Acquisition in question;

                  (II)    if the Acquisition is consummated during the period from and including December 1 to and including May 31, then the sum of the following, as reasonably estimated by the Borrower in good faith, must equal or exceed $35,000,000: (1) the sum of the balances of the Borrower's domestic cash, domestic cash equivalents and Borrowing Base Capacity as of the anticipated closing date; minus (2) the total cash consideration to be paid for the Acquisition in question;

                   (vi)    The ratio of pro forma Cash Flow to pro forma Debt Service is more than 1.10 to 1.00, computed in each case: (A) for the Borrower and its Consolidated Subsidiaries on a consolidated basis, (B) in accordance with GAAP; (C) as of the end of the most recently ended fiscal quarter prior to the date of the proposed Acquisition for the four fiscal quarters then ended; (D) as if the Acquisition occurred on the first day of such period; and (E) including in Cash Flow and Debt Service in a manner acceptable to the Administrative Agent, the Cash Flow and Debt Service of the Person to be acquired or attributable to the assets to be acquired, as the case may be; and

                   (vii)    No sooner than five days prior to the date of the closing of the proposed Acquisition, the Borrower shall have delivered to the Administrative Agent a certificate which shall certify compliance with the foregoing clauses (i) through (iv) and (vi) and shall show in reasonable detail the calculation required by clause (vi); provided, that no such certificate shall be required for any Acquisition in which the total consideration paid is less than $5,000,000.

        "Permitted Indebtedness" means (i) any Borrowings made hereunder, (ii) the Senior Subordinated Notes, (iii) the Mortgage Notes, (iv) up to $15,000,000 of other subordinated indebtedness or preferred stock existing as of the effective date of the Original Credit Agreement, (v) the Seller Preferred, (vi) $8,802,000 of the Senior Secured Notes and any guarantees thereunder, (vii) the intercompany Indebtedness incurred in connection with the Arden Acquisition described on Schedule 5.09 (the "Acquisition Indebtedness"), (viii) no more than $10,000,000 (in the aggregate) of Purchase Money Indebtedness outstanding at any time, (ix) up to $50,000,000 (in the aggregate) of Indebtedness (in addition to the Acquisition Indebtedness) outstanding at any time owed by Foreign Subsidiaries and any unsecured Guarantee thereof by the Borrower, provided that if such Indebtedness of the Foreign Subsidiaries is secured, then it will only be secured by accounts receivable and inventory of such Foreign Subsidiaries, (x) any other unsecured Indebtedness in an aggregate amount of no more than $15,000,000 outstanding at any time, which shall be on such terms and conditions as are satisfactory to the Administrative Agent in all respects, (xi) any refinancings of any of the above, which shall be on such terms and conditions as are satisfactory to the Administrative Agent in all respects, and (xii) intercompany Indebtedness (in addition to the Acquisition Indebtedness) between or among the Borrower or the Guarantors, as lenders, and any Foreign Subsidiary, as a borrower, which when the aggregate outstanding principal amount thereof is aggregated with the principal amounts committed or outstanding (whichever is greater) under clause (ix) above and the aggregate amount of any Permitted Investment made pursuant to Section 5.09(j), the total shall not exceed 

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$65,000,000 in the aggregate, provided, that, after giving effect to such intercompany Indebtedness, the Borrower shall have Borrowing Availability under this Agreement of at least $15,000,000 and provided, further, any committed or outstanding principal amounts of Indebtedness under clause (ix) above (whichever is greater) shall permanently reduce dollar-for-dollar the amount of intercompany Indebtedness permitted under this clause (xii).

        "Termination Date" means December 31, 2010.

        Section 2.3.    Addition of Definitions. The following definitions are added to Section 1.01 of the Agreement in proper alphabetical order.
        "Average Borrowing Base Capacity" has the meaning specified in Section 5.19.

        "Borrowing Base Capacity" has the meaning specified in Section 5.19.

        "Increase Amount" has the meaning specified in Section 2.18.

        "Increased Commitment Supplement" has the meaning specified in Section 2.18.

        "New Bank" has the meaning specified in Section 2.18.

        "Seller Preferred" means the preferred stock having a $50,000,000 aggregate liquidation/preference value issued on or about January 29, 2001 to the Seller by the Borrower pursuant to the terms of the Acquisition Agreement.

        Section 2.4.    Amendment to the Definition of Eligible Accounts Receivable. Clauses (vii) and (x) set forth in the definition of the term "Eligible Accounts Receivable" in Section 1.01 of the Agreement are each amended in their respective entirety to read as follows:
        (vii)    the invoice evidencing such account has not remained unpaid for a period exceeding one hundred twenty (120) days past the date of invoice;

      (x)    no more than fifty percent (50%) of the aggregate accounts receivable for the same account debtor shall have remained unpaid for a period exceeding one hundred twenty (120) days after the date of invoice;

        Section 2.5.    Amendment to Article II. Article II of the Agreement is amended to add an new Section 2.18 to read in its entirety as follows:
        Section 2.18    Increase of Commitments. By written notice sent to the Administrative Agent (which the Administrative Agent shall promptly distribute to the Banks), the Borrower may request an increase of the aggregate amount of the Commitments: (a) by an aggregate amount equal to any integral multiple of $10,000,000 and (b) by an amount not to exceed $100,000,000; provided that (i) no Default shall have occurred and be continuing; and (ii) the Borrower shall have provided evidence satisfactory to the Banks that the Indebtedness to be incurred pursuant to the increase in the Commitments is permitted by the Senior Subordinated Note Indenture and the other Indentures, in each case, to the extent the applicable Indenture is still in effect. Each Bank, in its sole and absolute discretion, shall determine whether it will increase its Commitment. If one or more of the Banks will not be increasing its Commitment 

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pursuant to such request, then, with notice to the Administrative Agent, another one or more financial institutions, each as approved by the Borrower and the Administrative Agent (a "New Bank"), may commit to provide an amount equal to the aggregate amount of the requested increase that will not be provided by the existing Banks (the "Increase Amount"); provided, that the Commitment of each New Bank shall be at least $5,000,000. Upon receipt of notice from the Administrative Agent to the Banks and the Borrower that the Banks, or sufficient Banks and New Banks, have agreed to commit to an aggregate amount equal to the Increase Amount (or such lesser amount as the Borrower shall agree, which shall be at least $10,000,000 and an integral multiple of $10,000,000 in excess thereof), then: provided that no Default exists at such time or after giving effect to the requested increase and the Indebtedness to be incurred pursuant to the requested increase is permitted by the Senior Subordinated Note Indenture and the other Indentures (in each case, to the extent the applicable Indenture is still in effect), the Borrower, the Administrative Agent and the Banks willing to increase their respective Commitments and the New Banks (if any) shall execute and deliver an Increased Commitment Supplement in the form attached hereto as Exhibit G (the "Increased Commitment Supplement"). If all existing Banks shall not have provided their pro rata portion of the requested increase, then after giving effect to the requested increase the outstanding Loans may not be held pro rata in accordance with the new Commitments. In order to remedy the foregoing, on the effective date of the Increased Commitment Supplement the Banks shall make advances among themselves, such advances to be in amounts sufficient so that after giving effect thereto, the Loans shall be held by the Banks pro rata according to their respective Commitments. The advances made by a Bank under this Section 2.18 shall be deemed to be a purchase of a corresponding amount of the Loans of one or more of the Banks who received the advances. The Commitments of the Banks who do not agree to increase their Commitments can not be reduced or otherwise changed pursuant to this Section 2.18.

        Section 2.6.    Amendment to Section 5.01(c). Clause (c) of Section 5.01 of the Agreement is amended in its entirety to read as follows:
        (c)    simultaneously with the delivery of each set of financial statements referred to in clause (a) above and each set of financial statements referred to in clause (e) below delivered for each month end which corresponds with the end of each fiscal quarter end, a certificate of the principal financial officer or the principal accounting officer of the Borrower: (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Section 5.19 of this Agreement on the date of such financial statements, (ii) setting forth in reasonable detail the calculations required to establish the Debt Service Pricing Ratio in order to determine the Applicable Margin and Applicable Letter of Credit Fee Rate for the upcoming fiscal quarter, (iii) stating whether any Default exists hereunder on the date of such certificate and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto, (iv) stating whether, since the date of the most recent financial statements previously delivered pursuant to this Section, there has been any material change in the generally accepted accounting principles applied in the preparation of such statements, and, if so, describing such change and (v) stating whether there is any Material Subsidiary that is required to be a Guarantor but currently is not a Guarantor;

        Section 2.7.    Amendment to Section 5.01(f). Clause (f) of Section 5.01 of the Agreement is amended in its entirety to read as follows:

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        (f)    a Borrowing Base Certificate together with an accounts receivable aging report (reflecting all journal entries and adjustments including all customer credits and debits), a report showing all amounts payable by the Borrower to the account debtors whose accounts receivable are included in the Borrowing Base, a collections report, a sales report and lockbox statements all certified by one of the Borrower's principal financial officers: (i) within fifteen (15) days after the end of each month, with the Borrowing Base Certificate and reports being prepared as of the last day of such month, and (ii) if a Default exists, within three days after any other date requested by the Administrative Agent with the Borrowing Base Certificate and such reports being prepared as of the date of the request; provided that if Borrowing Availability is less than $50,000,000 at any time during the period from and including June 1 to and including November 30, then for as long as the Borrowing Availability is less than $50,000,000 during such period, the Borrower will deliver to each Bank on Tuesday of each week a collections report, a sales report and an inventory report of the type required to be delivered under clause (g) of this Section 5.01 (which inventory report shall include a breakdown of inventory by category) as of the immediately preceding Saturday;

        Section 2.8.    Amendment to Section 5.09.
        (a)    The introductory phrase in Section 5.09 of the Agreement is amended in its entirety to read as follows:

        Neither the Borrower nor any of its Domestic Subsidiaries will make or acquire any Investment in any Person other than:

        (b)    Clause (j) of Section 5.09 of the Agreement is amended in its entirety to read as follows:

        (j)    investments, in addition to those disclosed on Schedule 5.09, by the Borrower or any Domestic Subsidiaries in any of the Foreign Subsidiaries who are not Guarantors, for working capital or general corporate purposes, which when aggregated with amounts committed under clause (ix) of the definition of Permitted Indebtedness and outstanding Indebtedness under clause (xii) thereof shall not exceed $65,000,000 in the aggregate; provided, that after giving effect to any such investments, Borrowing Availability shall be at least $15,000,000 and provided, further, any committed or outstanding amounts of Indebtedness under clause (ix) of the definition of Permitted Indebtedness shall permanently reduce dollar-for-dollar the amount of investments permitted under this Section 5.09(j); and

        Section 2.9.    Amendment to Section 5.14. Section 5.14 of the Agreement is amended in its entirety to read as follows:
             Section 5.14    Restricted Payments. The Borrower will not, nor will it permit any Domestic Subsidiary to make any Restricted Payments except:

                      (a)    a dividend paid by a wholly-owned Subsidiary to the Borrower;

                      (b)    redemption of the Seller Preferred with the proceeds of an equity issuance; and 

                      (c)    any Restricted Payment as long as after giving effect to such Restricted Payment:

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                        (i)    no Event of Default exists and is continuing;

                       (ii)    if the applicable Restricted Payment is paid or made during the period from and including June 1 to and including November 30, then the sum of the following, as reasonably estimated by the Borrower in good faith, must equal or exceed $25,000,000: (1) the sum of the balances of the Borrower's domestic cash, domestic cash equivalents and Borrowing Base Capacity as of the anticipated payment date; minus (2) the amount of the applicable Restricted Payment in question; and 

                       (iii)    if the applicable Restricted Payment is paid during the period from and including December 1 to and including May 31, then the sum of the following, as reasonably estimated by the Borrower in good faith, must equal or exceed $35,000,000: (1) the sum of the balances of the Borrower's domestic cash, domestic cash equivalents and Borrowing Base Capacity as of the anticipated payment date; minus (2) the amount of the applicable Restricted Payment in question.

The Borrower shall provide evidence of compliance with the requirements of the foregoing subclauses (ii) and (iii) promptly upon the Administrative Agent's request for such information.

        Section 2.10.    Amendment to Section 5.19. 

                   (a)    The reference to "$40,000,000" contained in the first paragraph of Section 5.19 (Minimum Quarterly Consolidated Debt Service Coverage Ratio) of the Agreement is amended in its entirety to read as "$35,000,000".

                   (b)    The definition of "Debt Service" contained in Section 5.19 of the Agreement is amended in its entirety to read as follows:
"Debt Service" means, for any period, the sum of (i) Consolidated Net Interest Expense plus (ii) regularly scheduled principal payments made in respect of Indebtedness during such period plus (iii) all cash Restricted Payments paid during such period.

        Section 2.11.    Amendment to Section 5.21(e)(ii)(B). The reference to "$40,000,000" contained in clause (e)(ii)(B) of Section 5.21 (Restriction on Payment of Indebtedness) of the Agreement is amended in its entirety to read as "$35,000,000".

        Section 2.12.    Amendment to Section 9.05. The following sentence is added to the end of Section 9.05 of the Agreement:
Notwithstanding any other provisions of this Section 9.05 to the contrary, this Agreement may be amended pursuant to an Increased Commitment Supplement executed in accordance with Section 2.18 which only needs to be signed by the Borrower, the Administrative Agent and the Banks increasing or providing new Commitments thereunder.

        Section 2.13.    Amendment to Schedule 1.01. Schedule 1.01 to the Agreement is amended in its entirety to read as Schedule 1.01 attached hereto.

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        Section 2.14.    Amendment to Exhibit E. Exhibit E (Form of Compliance Certificate) of the Agreement is amended in its entirety to read as Exhibit E attached hereto.

        Section 2.15.    Addition of Exhibit G. The Agreement is amended to add Exhibit G (Form of Increased Commitment Supplement) thereto to read in its entirety as set forth on Exhibit G to this Amendment.

        Section 2.16.    Amendment to Exhibit C. Exhibit C (Form of Borrowing Base Certificate) of the Agreement is amended in its entirety to read as Exhibit H attached hereto.

Conditions Precedent

        Section 3.1.    Conditions.    The effectiveness of Article II of this Amendment is subject to the satisfaction of the following conditions precedent:

                (a)    The Administrative Agent shall have received this Amendment duly executed by the Borrower, the Guarantors and the Banks;

                (b)    The receipt by the Administrative Agent of an arrangement fee and by the Banks of the upfront fees on or prior to the effective date of this Amendment in accordance with the separate letter agreement between the Administrative Agent and the Borrower executed on the date hereof;

                (c)    The representations and warranties contained herein and in all other Loan Documents, as amended hereby, shall be true and correct in all material respects as of the date hereof as if made on the date hereof, except for such representations and warranties limited by their terms to a specific date and the representations and warranties in Section 4.15(b) which shall be deemed made as of the Effective Date;

                (d)    No Default shall exist; and

                (e)    All proceedings taken in connection with the transactions contemplated by this Amendment and all documentation and other legal matters incident thereto shall be satisfactory to Administrative Agent and its legal counsel, Jenkens & Gilchrist, a Professional Corporation.

Miscellaneous

        Section 4.1.    Ratifications.    The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement, and the other Loan Documents are ratified and confirmed and shall continue in full force and effect. The Borrower, the Agents and the Banks agree that the Agreement as amended hereby and the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms. For all matters arising prior to the effective date of this Amendment, the Agreement (as unmodified by this Amendment) shall control.

        Section 4.2    Representations and Warranties; Release.    The Borrower hereby represents and warrants to the Agents and the Banks as follows: (a) no Default exists; and (b) the representations and 

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warranties set forth in the Loan Documents are true and correct on and as of the date hereof with the same effect as though made on and as of such date except with respect to any representations and warranties limited by their terms to a specific date. IN ADDITION, TO INDUCE THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT AND THE BANKS TO AGREE TO THE TERMS OF THIS AMENDMENT, THE BORROWER AND EACH GUARANTOR (BY ITS EXECUTION BELOW) REPRESENTS AND WARRANTS THAT AS OF THE DATE OF ITS EXECUTION OF THIS AMENDMENT THERE ARE NO CLAIMS OR OFFSETS AGAINST OR RIGHTS OF RECOUPMENT WITH RESPECT TO OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.

        Section 4.3.    Survival of Representations and Warranties.    All representations and warranties made in this Amendment or any other Loan Document including any Loan Document furnished in connection with this Amendment shall survive the execution and delivery of this Amendment, and no investigation by any Agent or any Bank or any closing shall affect the representations and warranties or the right of the any Agent or any Bank to rely upon them.

        Section 4.4.    Reference to Agreement.    Each of the Loan Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference to the Agreement as amended hereby.

        Section 4.5.    Expenses of Administrative Agent.    As provided in the Agreement, Borrower agrees to pay on demand all reasonable costs and expenses incurred by the Administrative Agent in connection with the preparation, negotiation, and execution of this Amendment, including without limitation, the reasonable costs and fees of the Administrative Agent's legal counsel provided it sends an invoice to Borrower beforehand and addresses reasonable questions.

        Section 4.6.    Severability.    Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

        Section 4.7.    Applicable Law.    This Amendment shall be governed by and construed in accordance with the laws of the State of New York other than those conflict of law provisions that would defer to the substantive laws of another jurisdiction. This governing law election has been made by the parties in reliance (at least in part) on Section 5-1401 of the General Obligations Law of the State of New York, as amended (as and to the extent applicable), and other applicable law.

        Section 4.8.    Successors and Assigns.    This Amendment is binding upon and shall inure to the benefit of the Agents, each Bank, the Borrower, each Guarantor and their respective successors and assigns, except neither Borrower nor any Guarantor may assign or transfer any of its rights or obligations hereunder without the prior written consent of the Banks.

        Section 4.9.    Counterparts.    This Amendment may be executed in one or more counterparts and on telecopy counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.

        Section 4.10.    Effect of Waiver.    No consent or waiver, express or implied, by any Agent or any Bank to or for any breach of or deviation from any covenant, condition or duty by the Borrower or any Guarantor shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.

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        Section 4.11.    Headings.    The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

        Section 4.12.    ENTIRE AGREEMENT.    THIS AMENDMENT EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

        Executed as of the date first written above.

	
ELIZABETH ARDEN, INC., as the Borrower

	
 

	
By:
	
/s/ Marcey Becker

	
	

	
 
	
Name:
	
Marcey Becker

	
	
	

	
 
	
Title:
	
Senior Vice President, Finance

	
	
	

  

	
JPMORGAN CHASE BANK, N.A. (formerly JPMorgan Chase Bank), individually as a Bank, an Issuing Bank and as Administrative Agent

	
 

	
By:
	
/s/ Richard Hawk, Vice President

	
	

  

	
BANK OF AMERICA, N.A. (successor in interest by merger to Fleet National Bank), as Collateral Agent and a Bank

	
 

	
By:
	
/s/ Christopher S. Allen

	
	

	
 
	
Name:
	
Christopher S. Allen

	
	
	

	
 
	
Title:
	
Senior Vice President

	
	
	

  

	
THE CIT GROUP/BUSINESS CREDIT, INC. (assignee of LaSalle Business Credit, L.L.C.)

	
 

	
By:
	
/s/ StewartMcLeod

	
	

	
 
	
Name:
	
Stewart McLeod

	
	
	

	
 
	
Title:
	
Asst. Vice President

	
	
	

  

Page 11

	
U.S. BANK BUSINESS CREDIT

(formerly known as Firstar Bank N.A.)

	
 

	
By:
	
/s/ Jeff Patton

	
	

	
 
	
Name:
	
Jeff Patton

	
	
	

	
 
	
Title:
	
Commercial Loan Officer

	
	
	

  

	
WACHOVIA BANK, NATIONAL ASSOCIATION

(formerly known as First Union National Bank)

	
 

	
By:
	
/s/ Andrew Gale

	
	

	
 
	
Name:
	
Andrew Gale

	
	
	

	
 
	
Title:
	
Vice President

	
	
	

  

	
SIEMENS FINANCIAL SERVICES, INC.

	
 

	
By:
	
/s/ Frank Amodio

	
	

	
 
	
Name:
	
Frank Amodio

	
	
	

	
 
	
Title:
	
Vice President - Credit

	
	
	

  

	
CREDIT SUISSE, Cayman Islands Branch (formerly knows as Credit Suisse First Boston)

	
 

	
By:
	
/s/ Karl Studer

	
	

	
 
	
Name:
	
Karl Studer

	
	
	

	
 
	
Title:
	
Director

	
	
	

	
 

	
By:
	
/s/ Yvonne Guntlin

	
	

	
 
	
Name:
	
Yvonne Guntlin

	
	
	

	
 
	
Title:
	
Assistant Vice President

	
	
	

  

	
NATIONAL CITY BUSINESS CREDIT, INC.

(successor to The Provident Bank)

	
 

	
By:
	
/s/ Michael Fine

	
	

	
 
	
Name:
	
Michael Fine

	
	
	

	
 
	
Title:
	
Director

	
	
	

  

Page 12

CONSENT OF GUARANTORS AND REAFFIRMATION OF LOAN DOCUMENTS

Each of the Guarantors consent and agree to this Amendment (including without limitation, the provisions of Section 4.2 hereof) and agree that the Loan Documents to which it is a party shall remain in full force and effect and shall continue to be the legal, valid and binding obligation of such Guarantor enforceable against it in accordance with their respective terms.

	
 FD MANAGEMENT, INC.

	
 

	
By:
	
/s/ Oscar E. Marina

	
	

	
 
	
Name:
	
Oscar E. Marina

	
	
	

	
 
	
Title:
	
Vice President

	
	
	

 

	
DF ENTERPRISES, INC.

	
 

	
By:
	
/s/ Oscar E. Marina

	
	

	
 
	
Name:
	
Oscar E. Marina

	
	
	

	
 
	
Title:
	
Vice President

	
	
	

 

	
ELIZABETH ARDEN INTERNATIONAL 

 HOLDING, INC. (formerly FFI International, Inc.)

	
 

	
By:
	
/s/ Oscar E. Marina

	
	

	
 
	
Name:
	
Oscar E. Marina

	
	
	

	
 
	
Title:
	
Vice President

	
	
	

 

	
RDEN MANAGEMENT, INC.

	
 

	
By:
	
/s/ Oscar E. Marina

	
	

	
 
	
Name:
	
Oscar E. Marina

	
	
	

	
 
	
Title:
	
Vice President

	
	
	

 

	
ELIZABETH ARDEN (FINANCING), INC.

	
 

	
By:
	
/s/ Oscar E. Marina

	
	

	
 
	
Name:
	
Oscar E. Marina

	
	
	

	
 
	
Title:
	
Vice President

	
	
	

 

	
ELIZABETH ARDEN TRAVEL RETAIL, INC.

	
 

	
By:
	
/s/ Oscar E. Marina

	
	

	
 
	
Name:
	
Oscar E. Marina

	
	
	

	
 
	
Title:
	
Vice President

	
	
	

Page 13

Index of Exhibits and Schedules

 

Exhibits

	
E
	
 
	
Form of Compliance Certificate

	
G
	
 
	
Form of Increased Commitment Supplement

	
H
	
 
	
Form of Borrowing Base Certificate

Schedules

	
1.01
	
 
	
CommitmentsAmended & Restated Declaration of Trust for HNC Statutory Trust III

    Exhibit
      10.28

     

    AMENDED
      AND RESTATED DECLARATION

     

    OF
      TRUST

     

    HNC
      STATUTORY TRUST III 

     

    Dated
      as
      of September 28, 2005 

     

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    TABLE
      OF CONTENTS

     

                                                    PAGE

    ARTICLE
      I    INTERPRETATION
      AND DEFINITIONS                                    
  1

     

    Section
      1.1.    Definitions                                                 
       1

     

    ARTICLE
      II    ORGANIZATION                                                 
9

     

    Section
      2.1.    Name                                                    
      9

     

    Section
      2.2.    Office                                                    9

     

    Section
      2.3.    Purpose                                                                                                    9

     

    Section
      2.4.    Authority                                                    
      9

     

    Section
      2.5.    Title
      to
      Property of the
      Trust                                                                                                                
      10

     

    Section
      2.6.    Powers
      and Duties of the Trustees and the
      Administrators                                                            
      10

     

    Section
      2.7.    Prohibition
      of Actions by the Trust and the
      Trustees                                                                     
      14

     

    Section
      2.8.    Powers
      and Duties of the Institutional
      Trustee                                                                                 
      15

     

    Section
      2.9.    Certain
      Duties and Responsibilities of the Trustees and the
      Administrators                               
      17

     

    Section
      2.10.    Certain
      Rights of Institutional
      Trustee                                                                                              
      19

     

    Section
      2.11.    Delaware
      Trustee                                                                                                                                  
      21

     

    Section
      2.12.    Execution
      of
      Documents                                                                                                                      
      21

     

    Section
      2.13.    Not
      Responsible for Recitals or Issuance of
      Securities                                                                  
      21

     

    Section
      2.14.    Duration
      of Trust                                                                                                                                   
      22

     

    Section
      2.15.    Mergers                                                                                                                                                   
      22

     

                  ARTICLE
      III    SPONSOR                                                                                                                      24

     

    Section
      3.1.    Sponsor’s
      Purchase of Common
      Securities                                                                                         
      24

     

    Section
      3.2.    Responsibilities
      of
      the
      Sponsor                                                                                                            
      24

     

    ARTICLE
      IV    TRUSTEES
      AND ADMINISTRATORS                                     
24

     

    Section
      4.1.    Number
      of
      Trustees                                          
24

     

    Section
      4.2.    Delaware
      Trustee                                                                                                                                       25

     

    Section
      4.3.    Institutional
      Trustee;
      Eligibility                                                                                                             
      25

     

    Section
      4.4.    Certain
      Qualifications of the Delaware Trustee
      Generally                                                                 
      25

     

    Section
      4.5.    Administrators                                                                                                                                          
      26

     

    Section
      4.6.    Initial
      Delaware
      Trustee                                                                                                                          
      26

     

    Section
      4.7.    Appointment,
      Removal and Resignation of the Trustees and the
      Administrators                       
      26

     

     

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

     

    Section
      4.8.    Vacancies
      Among
      Trustees                                                                                                                  
      28

     

    Section
      4.9.    Effect
      of
      Vacancies                                                                                                                                 
      28

     

    Section
      4.10.   Meetings
      of the Trustees and the
      Administrators                                                                           
      28

     

    Section
      4.11.   Delegation
      of
      Power                                                                                                                               29

     

    Section
      4.12.   Merger,
      Conversion, Consolidation or Succession to
      Business                                                    
      29

     

     

    ARTICLE
      V    DISTRIBUTIONS                                                                                                                                                   
       29

     

    Section
      5.1.    Distributions                                                                                                                                             
      29

     

    ARTICLE
      VII    SSUANCE
      OF
      SECURITIES                                                                                                                               
      29

     

    Section
      6.1.    General
      Provisions Regarding
      Securities                                                                                             
      29

     

    Section
      6.2.    Paying
      Agent, Transfer Agent, Calculation Agent and
      Registrar                                                    30

     

    Section
      6.3.    Form
      and
      Dating                                                                                                                                        31

     

    Section
      6.4.    Mutilated,
      Destroyed, Lost or Stolen
      Certificates                                                                                31

     

    Section
      6.5.    Temporary
      Certificates                                                                                                                             32

     

    Section
      6.6.    Cancellation                                                                                                                                                32

     

    Section
      6.7.    Rights
      of
      Holders; Waivers of Past
      Defaults                                                                                        32

     

    ARTICLE
      VII    DISSOLUTION
      AND TERMINATION OF
      TRUST                                                                                          34

     

    Section
      7.1.    Dissolution
      and Termination of
      Trust                                                                                                    34

     

    ARTICLE
      VIII    TRANSFER
      OF
      INTERESTS                                                                                                                               35

     

    Section
      8.1.    General                                                                                                                                                        
      35

     

    Section
      8.2.    Transfer
      Procedures and Restrictions
                                                                                                        
      36

     

    Section
      8.3.    Deemed
      Security
      Holders                                                                                                                 
             39

     

    Section
      8.4.    Transfer
      of
      Initial
      Securities                                                                                                                    
      39

     

    ARTICLE
      IX    LIMITATION
      OF LIABILITY OF HOLDERS OF SECURITIES, 

               TRUSTEES
      OR
      OTHERS                                                                                                                                      
      39

     

    Section
      9.1.    Liability                                                                                                                                                      
      39

     

    Section
      9.2.    Exculpation                                                                                                                                                
      40

     

    Section
      9.3.    Fiduciary
      Duty                                                                                                                                          
      40

     

    Section
      9.4.    Indemnification                                                                                                                                         
      41

     

    Section
      9.5.    Outside
      Businesses                                                                                                                                 
      44

     

    Section
      9.6.    Compensation;
      Fee                                                                                                                                  
      44

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      X    ACCOUNTING                                                                                                                                                         44

     

    Section
      10.1.    Fiscal
      Year                                                                                                                                                45

     

    Section
      10.2.    Certain
      Accounting
      Matters                                                                                                                  45

     

    Section
      10.3.    Banking                                                                                                                                                    
      46

     

    Section
      10.4.    Withholding                                                                                                                                            
      46

     

    ARTICLE
      XI    AMENDMENTS
      AND
      MEETINGS                                                                                                                    
      46

     

    Section
      11.1.    Amendments                                                                                                                                          
      46

     

    Section
      11.2.    Meetings
      of
      the Holders of the Securities; Action by Written
      Consent                                      
      48

     

    ARTICLE
      XII    REPRESENTATIONS
      OF INSTITUTIONAL TRUSTEE AND DELAWARE
      TRUSTEE                          
      50

     

    Section
      12.1.    Representations
      and Warranties of Institutional
      Trustee                                                               
      50

     

    Section
      12.2.    Representations
      and Warranties of Delaware
      Trustee                                                                     50

     

    ARTICLE
      XIII    MISCELLANEOUS                                                                                                                                             
      51

     

    Section
      13.1.    Notices                                                                                                                                                     
      51

     

    Section
      13.2.    Governing
      Law                                                                                                                                        
      52

     

    Section
      13.3.    Submission
      to
      Jurisdiction                                                                                                                    
      53

     

    Section
      13.4.    Intention
      of the
      Parties                                                                                                                          
      53

     

    Section
      13.5.    Headings                                                                                                                                                  
      53

     

    Section
      13.6.    Successors
      and
      Assigns                                                                                                                       
      53

     

    Section
      13.7.    Partial
      Enforceability                                                                                                                              
      53

     

    Section
      13.8.    Counterparts                                                                                                                                           
      54

     

    ANNEXES
      AND EXHIBITS

     

    ANNEX
      I    TERMS
      OF
      FIXED/FLOATING RATE CAPITAL SECURITIES 

                
      AND FIXED/FLOATING RATE COMMON
      SECURITIES                                                                                
      A-1

     

    EXHIBIT
      A-1  FORM
      OF
      CAPITAL SECURITY
      CERTIFICATE                                                                                              
      A-1

     

    EXHIBIT
      A-2  FORM
      OF
      COMMON SECURITY
      CERTIFICATE                                                                                            
      A-2

     

    EXHIBIT
      B   FORM
      OF
      TRANSFEREE CERTIFICATE TO BE EXECUTED BY    

               TRANSFEREES
      OTHER THAN
      QIBs                                                                                                                
      B-1

     

    EXHIBIT
      C   FORM
      OF
      TRANSFEROR CERTIFICATE TO BE EXECUTED FOR
      QIBs                                                  
      C-1

     

                  
      EXHIBIT
      D    
FORM
      OF ADMINISTRATOR’S
      CERTIFICATE OF THE
      TRUST                                                             
      D-1

    

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

    AMENDED
      AND RESTATED DECLARATION OF TRUST

     

    OF

     

    HNC
      STATUTORY TRUST III 

     

    September
      28, 2005 

     

    AMENDED
      AND RESTATED DECLARATION OF TRUST (this “Declaration”), dated and effective as
      of September 28, 2005, by the Trustees (as defined herein), the Administrators
      (as defined herein), the Sponsor (as defined herein) and the holders from time
      to time of undivided beneficial interests in the assets of the Trust (as defined
      herein) to be issued pursuant to this Declaration. 

     

    WHEREAS,
      certain of the Trustees and the Sponsor established HNC Statutory Trust III
      (the
“Trust”), a statutory trust under the Statutory Trust Act (as defined herein),
      pursuant to a Declaration of Trust, dated as of September 22, 2005 (the
“Original Declaration”), and a Certificate of Trust filed with the Secretary of
      State of the State of Delaware on September 22, 2005, for the sole purpose
      of
      issuing and selling certain securities representing undivided beneficial
      interests in the assets of the Trust investing the proceeds thereof in certain
      debentures of the Debenture Issuer (as defined herein) and engaging in those
      activities necessary, advisable or incidental thereto;

     

    WHEREAS,
      as of the date hereof, no interests in the assets of the Trust have been issued;
      and

     

    WHEREAS,
      all of the Trustees, the Administrators and the Sponsor, by this Declaration,
      amend and restate each and every term and provision of the Original
      Declaration.

     

    NOW,
      THEREFORE, it being the intention of the parties hereto to continue the Trust
      as
      a statutory trust under the Statutory Trust Act and that this Declaration
      constitutes the governing instrument of such statutory trust and that all assets
      contributed to the Trust will be held in trust for the benefit of the holders,
      from time to time, of the securities representing undivided beneficial interests
      in the assets of the Trust issued hereunder, subject to the provisions of this
      Declaration, and, in consideration of the mutual covenants contained herein
      and
      other good and valuable consideration, the receipt of which is hereby
      acknowledged, the parties, intending to be legally bound hereby, amend and
      restate in its entirety the Original Declaration and agree as
      follows:

     

    ARTICLE
      I  

     

    INTERPRETATION
      AND DEFINITIONS

     

    Section
      1.1.  Definitions.
      Unless
      the context otherwise requires:

     

    (a) capitalized
      terms used in this Declaration but not defined in the preamble above or
      elsewhere herein have the respective meanings assigned to them in this Section
      1.1 or, if not defined in this Section 1.1 or elsewhere herein, in the
      Indenture;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) a
      term
      defined anywhere in this Declaration has the same meaning
      throughout;

     

    (c) all
      references to “the Declaration” or “this Declaration” are to this Declaration as
      modified, supplemented or amended from time to time;

     

    (d) all
      references in this Declaration to Articles and Sections and Annexes and Exhibits
      are to Articles and Sections of and Annexes and Exhibits to this Declaration
      unless otherwise specified;

     

    (e) a
      term
      defined in the Trust Indenture Act (as defined herein) has the same meaning
      when
      used in this Declaration unless otherwise defined in this Declaration or unless
      the context otherwise requires; and

     

    (f) a
      reference to the singular includes the plural and vice versa.

     

    “Additional
      Interest” has the meaning set forth in Section 3.06 of the Indenture.

     

    “Administrative
      Action” has the meaning set forth in paragraph 4(a) of Annex I.

     

    “Administrators”
      means each of George S. Rapp and Michael B. High, solely in such Person’s
      capacity as Administrator of the Trust continued hereunder and not in such
      Person’s individual capacity, or such Administrator’s successor in interest in
      such capacity, or any successor appointed as herein provided.

     

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

     

    “Authorized
      Officer” of a Person means any Person that is authorized to bind such
      Person.

     

    “Bankruptcy
      Event” means, with respect to any Person: 

     

    (a) a
      court
      having jurisdiction in the premises enters a decree or order for relief in
      respect of such Person 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 similar
      official of such Person or for any substantial part of its property, or orders
      the winding-up or liquidation of its affairs, and such decree, appointment
      or
      order remains unstayed and in effect for a period of 90 consecutive days;
      or

     

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

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    “Business
      Day” means any day other than 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” has the meaning set forth in Section 1.01 of the Indenture.

     

    “Capital
      Securities” has the meaning set forth in Section 6.1(a).

     

    “Capital
      Security Certificate” means a definitive Certificate registered in the name of
      the Holder representing a Capital Security substantially in the form of Exhibit
      A-1.

     

    “Capital
      Treatment Event” has the meaning set forth in paragraph 4(a) of
      Annex I.

     

    “Certificate”
      means any certificate evidencing Securities.

     

    “Certificate
      of Trust” means the certificate of trust filed with the Secretary of State of
      the State of Delaware with respect to the Trust, as amended and restated from
      time to time.

     

    “Closing
      Date” has the meaning set forth in the Placement Agreement.

     

    “Code”
      means the Internal Revenue Code of 1986, as amended from time to time, or any
      successor legislation.

     

    “Commission”
      means the Securities and Exchange Commission.

     

    “Common
      Securities” has the meaning set forth in Section 6.1(a).

     

    “Common
      Security Certificate” means a definitive Certificate registered in the name of
      the Holder representing a Common Security substantially in the form of Exhibit
      A-2.

     

    “Company
      Indemnified Person” means (a) any Administrator; (b) any Affiliate of any
      Administrator; (c) any officers, directors, shareholders, members, partners,
      employees, representatives or agents of any Administrator; or (d) any officer,
      employee or agent of the Trust or its Affiliates.

     

    “Corporate
      Trust Office” means the office of the Institutional Trustee at which the
      corporate trust business of the Institutional Trustee shall, at any particular
      time, be principally administered, which office shall at all times be located
      in
      the United States and at the date of execution of this Declaration is located
      at
      Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
      Attention: Corporate Capital Markets. 

     

    “Coupon
      Rate” has the meaning set forth in paragraph 2(a) of Annex I.

     

    “Covered
      Person” means: (a) any Administrator, officer, director, shareholder,
      partner, member, representative, employee or agent of (i) the Trust
      or
      (ii) any of the Trust’s Affiliates; and (b) any Holder of Securities.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    “Debenture
      Issuer” means Harleysville National Corporation, a bank holding company
      incorporated in Pennsylvania, in its capacity as issuer of the Debentures under
      the Indenture.

     

    “Debenture
      Trustee” means Wilmington Trust Company, a Delaware banking corporation, not in
      its individual capacity but solely as trustee under the Indenture until a
      successor is appointed thereunder, and thereafter means such successor
      trustee.

     

    “Debentures”
      means the Fixed/Floating Rate Junior Subordinated Debt Securities due 2035
      to be
      issued by the Debenture Issuer under the Indenture. 

     

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

     

    “Deferred
      Interest” means any interest on the Debentures that would have been overdue and
      unpaid for more than one Distribution Payment Date but for the imposition of
      an
      Extension Period, and the interest that shall accrue (to the extent that the
      payment of such interest is legally enforceable) on such interest at the Coupon
      Rate in effect for each such Extension Period, compounded quarterly from the
      date on which such Deferred Interest would otherwise have been due and payable
      until paid or made available for payment.

     

    “Definitive
      Capital Securities” means any Capital Securities in definitive form issued by
      the Trust.

     

    “Delaware
      Trustee” has the meaning set forth in Section 4.2.

     

    “Direct
      Action” has the meaning set forth in Section 2.8(e).

     

    “Distribution”
      means a distribution payable to Holders of Securities in accordance with Section
      5.1.

     

    “Distribution
      Payment Date” has the meaning set forth in paragraph 2(e) of Annex
      I.

     

    “Distribution
      Period” has the meaning set forth in paragraph 2(a) of Annex I.

     

    “Event
      of
      Default” means the occurrence of an Indenture Event of Default.

     

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

     

    “Extension
      Period” has the meaning set forth in paragraph 2(e) of Annex I.

     

    “Federal
      Reserve” has the meaning set forth in paragraph 3 of Annex I.

     

    “Fiduciary
      Indemnified Person” shall mean each of the Institutional Trustee (including in
      its individual capacity), the
      Delaware Trustee (including in its individual capacity), 

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    any
      Affiliate of the Institutional Trustee or the Delaware Trustee, and any
      officers, directors, shareholders, members, partners, employees,
      representatives, custodians, nominees or agents of the Institutional Trustee
      or
      the Delaware Trustee.

    
       

                “Fixed
        Period” has the meaning
        set forth in paragraph 2(a) of Annex I.

    

     

    “Guarantee”
      means the Guarantee Agreement, dated as of the Closing Date, of the Sponsor
      in
      respect of the Capital Securities.

     

    “Holder”
      means a Person in whose name a Certificate representing a Security is registered
      on the register maintained by or on behalf of the Registrar, such Person being
      a
      beneficial owner within the meaning of the Statutory Trust Act.

     

    “Indemnified
      Person” means a Company Indemnified Person or a Fiduciary Indemnified
      Person.

     

    “Indenture”
      means the Indenture, dated as of the Closing Date, among the Debenture Issuer
      and the Debenture Trustee, and any indenture supplemental thereto pursuant
      to
      which the Debentures are to be issued.

     

    “Indenture
      Event of Default” means an “Event of Default” as defined in the
      Indenture.

     

    “Institutional
      Trustee” means the Trustee meeting the eligibility requirements set forth in
      Section 4.3.

     

    “Interest”
      means any interest due on the Debentures, including any Deferred Interest and
      Defaulted Interest (as each such term is defined in the Indenture).

     

    “Investment
      Company” means an investment company as defined in the Investment Company
      Act.

     

    “Investment
      Company Act” means the Investment Company Act of 1940, as amended from time to
      time, or any successor legislation.

     

    “Investment
      Company Event” has the meaning set forth in paragraph 4(a) of Annex
      I.

     

    “Legal
      Action” has the meaning set forth in Section 2.8(e).

     

    “LIBOR”
      means the London Interbank Offered Rate for three-month U.S. Dollar deposits
      in
      Europe as determined by the Calculation Agent according to paragraph 2(b) of
      Annex I.

     

    “LIBOR
      Banking Day” has the meaning set forth in paragraph 2(b)(1) of Annex
      I.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    “LIBOR
      Business Day” has the meaning set forth in paragraph 2(b)(1) of
      Annex I.

     

    “LIBOR
      Determination Date” has the meaning set forth in paragraph 2(b)(1) of Annex
      I.

     

    “Liquidation”
      has the meaning set forth in paragraph 3 of Annex I.

     

    “Liquidation
      Distribution” has the meaning set forth in paragraph 3 of Annex I.

     

    “Majority
      in liquidation amount of the Securities” means Holders of outstanding Securities
      voting together as a single class or, as the context may require, Holders of
      outstanding Capital Securities or Holders of outstanding Common Securities
      voting separately as a class, who are the record owners of more than 50% of
      the
      aggregate liquidation amount (including the stated amount that would be paid
      on
      redemption, liquidation or otherwise, plus accrued and unpaid Distributions
      to
      the date upon which the voting percentages are determined) of all outstanding
      Securities of the relevant class.

     

    “Officers’
      Certificate” means, with respect to any Person, a certificate signed by two
      Authorized Officers of such Person. Any Officers’ Certificate delivered with
      respect to compliance with a condition or covenant provided for in this
      Declaration shall include:

     

    (a) a
      statement that each officer signing the Officers’ Certificate has read the
      covenant or condition and the definitions relating thereto;

     

    (b) a
      brief
      statement of the nature and scope of the examination or investigation undertaken
      by each officer in rendering the Officers’ Certificate;

     

    (c) a
      statement that each such officer has made such examination or investigation
      as,
      in such officer’s opinion, is necessary to enable such officer 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, in the opinion of each such officer, such condition
      or
      covenant has been complied with. 

     

    “Paying
      Agent” has the meaning set forth in Section 6.2.

     

    “Payment
      Amount” has the meaning set forth in Section 5.1.

     

    “Person”
      means a legal person, including any individual, corporation, estate,
      partnership, joint venture, association, joint stock company, limited liability
      company, trust, unincorporated association, or government or any agency or
      political subdivision thereof, or any other entity of whatever
      nature.

     

    “Placement
      Agreement” means the Placement Agreement relating to the offering and sale of
      Capital Securities.

     

    
      
        
        

      

      
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    “PORTAL”
      has the meaning set forth in Section 2.6(a)(i).

     

    “Property
      Account” has the meaning set forth in Section 2.8(c).

     

    “Pro
      Rata” has the meaning set forth in paragraph 8 of Annex I.

     

    “QIB”
      means a “qualified institutional buyer” as defined under Rule 144A.

     

    “Quorum”
      means a majority of the Administrators or, if there are only two Administrators,
      both of them.

     

    “Redemption/Distribution
      Notice” has the meaning set forth in paragraph 4(e) of
      Annex I.

     

    “Redemption
      Price” has the meaning set forth in paragraph 4(a) of Annex I.

     

    “Registrar”
      has the meaning set forth in Section 6.2.

     

    “Relevant
      Trustee” has the meaning set forth in Section 4.7(a).

     

    “Responsible
      Officer” means, with respect to the Institutional Trustee, any officer within
      the Corporate Trust Office of the Institutional Trustee with direct
      responsibility for the administration of this Declaration, 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 Corporate Trust Office of the Institutional 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.

     

    “Restricted
      Securities Legend” has the meaning set forth in
      Section 8.2(c).

     

    “Rule
      144A” means Rule 144A under the Securities Act.

     

    “Rule
      3a-5” means Rule 3a-5 under the Investment Company Act.

     

    “Rule
      3a-7” means Rule 3a-7 under the Investment Company Act.

     

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

     

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

     

    “Sponsor”
      means Harleysville National Corporation, a bank holding company that is a U.S.
      Person incorporated in Pennsylvania, or any successor entity in a merger,
      consolidation or amalgamation that is a U.S. Person, in its capacity as sponsor
      of the Trust.

     

    “Statutory
      Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §
      3801 et seq., as it may be amended from time to time, or any successor
      legislation.

     

    
      
        
        

      

      
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    “Successor
      Delaware Trustee” has the meaning set forth in Section 4.7(e).

     

    “Successor
      Entity” has the meaning set forth in Section 2.15(b).

     

    “Successor
      Institutional Trustee” has the meaning set forth in Section 4.7(b).

     

    “Successor
      Securities” has the meaning set forth in Section 2.15(b).

     

    “Super
      Majority” has the meaning set forth in paragraph 5(b) of Annex I.

     

    “Tax
      Event” has the meaning set forth in paragraph 4(a) of Annex I.

     

    “10%
      in
      liquidation amount of the Securities” means Holders of outstanding Securities
      voting together as a single class or, as the context may require, Holders of
      outstanding Capital Securities or Holders of outstanding Common Securities
      voting separately as a class, who are the record owners of 10% or more of the
      aggregate liquidation amount (including the stated amount that would be paid
      on
      redemption, liquidation or otherwise, plus accrued and unpaid Distributions
      to
      the date upon which the voting percentages are determined) of all outstanding
      Securities of the relevant class.

     

    “Transfer
      Agent” has the meaning set forth in Section 6.2.

     

    “Treasury
      Regulations” means the income tax regulations, including temporary and proposed
      regulations, promulgated under the Code by the United States Treasury, as such
      regulations may be amended from time to time (including corresponding provisions
      of succeeding regulations).

     

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

     

    “Trust
      Property” means (a) the Debentures, (b) any cash on deposit in, or owing to, the
      Property Account and (c) all proceeds and rights in respect of the foregoing
      and
      any other property and assets for the time being held or deemed to be held
      by
      the Institutional Trustee pursuant to the trusts of this
      Declaration.

     

    “Trustee”
      or “Trustees” means each Person who has signed this Declaration as a trustee, so
      long as such Person shall continue in office in accordance with the terms
      hereof, and all other Persons who may from time to time be duly appointed,
      qualified and serving as Trustees in accordance with the provisions hereof,
      and
      references herein to a Trustee or the Trustees shall refer to such Person or
      Persons solely in their capacity as trustees hereunder.

     

    “U.S.
      Person” means a United States Person as defined in Section 7701(a)(30) of the
      Code.

     

    ARTICLE
      II

     

    ORGANIZATION

     

    
      
        
        

      

      
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    Section
      2.1.  Name.
      The
      Trust is named “HNC Statutory Trust III,” as such name may be modified from time
      to time by the Administrators following written notice to the Institutional
      Trustee and the Holders of the Securities. The Trust’s activities may be
      conducted under the name of the Trust or any other name deemed advisable by
      the
      Administrators.

     

    Section
      2.2.  Office.
      The
      address of the principal office of the Trust, which shall be in a State of
      the
      United States or the District of Columbia, is 483 Main Street, Harleysville,
      Pennsylvania 19438. On ten Business Days’ written notice to the Institutional
      Trustee and the Holders of the Securities, the Administrators may designate
      another principal office, which shall be in a State of the United States or
      the
      District of Columbia. 

     

    Section
      2.3.  Purpose.
      The
      exclusive purposes and functions of the Trust are (a) to issue and sell the
      Securities representing undivided beneficial interests in the assets of the
      Trust, (b) to invest the gross proceeds from such sale in the Debentures and
      (c)
      except as otherwise limited herein, to engage in only those other activities
      incidental thereto that are deemed necessary or advisable by the Institutional
      Trustee, including, without limitation, those activities specified in this
      Declaration. The Trust shall not borrow money, issue debt or reinvest proceeds
      derived from investments, pledge any of its assets, or otherwise undertake
      (or
      permit to be undertaken) any activity that would cause the Trust not to be
      classified for United States federal income tax purposes as a grantor
      trust.

     

    Section
      2.4.  Authority.
      Except
      as specifically provided in this Declaration, the Institutional Trustee shall
      have exclusive and complete authority to carry out the purposes of the Trust.
      An
      action taken by a Trustee on behalf of the Trust and in accordance with such
      Trustee’s powers shall constitute the act of and serve to bind the Trust. In
      dealing with the Trustees acting on behalf of the Trust, no Person shall be
      required to inquire into the authority of the Trustees to bind the Trust.
      Persons dealing with the Trust are entitled to rely conclusively on the power
      and authority of the Trustees as set forth in this Declaration. The
      Administrators shall have only those ministerial duties set forth herein with
      respect to accomplishing the purposes of the Trust and are not intended to
      be
      trustees or fiduciaries with respect to the Trust or the Holders. The
      Institutional Trustee shall have the right, but shall not be obligated except
      as
      provided in Section 2.6, to perform those duties assigned to the
      Administrators.

     

    Section
      2.5.  Title
      to Property of the Trust.
      Except
      as provided in Section 2.8 with respect to the Debentures and the Property
      Account or as otherwise provided in this Declaration, legal title to all assets
      of the Trust shall be vested in the Trust. The Holders shall not have legal
      title to any part of the assets of the Trust, but shall have an undivided
      beneficial interest in the assets of the Trust.

     

    Section
      2.6.  Powers
      and Duties of the Trustees and the Administrators.
      

     

    (a) The
      Trustees and the Administrators shall conduct the affairs of the Trust in
      accordance with the terms of this Declaration. Subject to the limitations set
      forth in paragraph (b) of this Section, and in accordance with the
      following provisions (i) and (ii), the Administrators and, at the direction
      of
      the Administrators, the Trustees, shall have the authority to enter into all
      transactions and agreements determined by the Administrators to be
      appropriate

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     in
      exercising the authority, express or implied, otherwise granted to the Trustees
      or the Administrators, as the case may be, under this Declaration, and to
      perform all acts in furtherance thereof, including without limitation, the
      following:

     

    (i) Each
      Administrator shall have the power, duty and authority, and is hereby
      authorized, to act on behalf of the Trust with respect to the following
      matters:

     

    (A) the
      issuance and sale of the Securities;

     

    (B) to
      cause
      the Trust to enter into, and to execute, deliver and perform on behalf of the
      Trust, such agreements as may be necessary or desirable in connection with
      the
      purposes and function of the Trust, including agreements with the Paying Agent,
      the Placement Agreement, a Debenture subscription agreement between the Trust
      and the Sponsor and a Common Securities subscription agreement between the
      Trust
      and the Sponsor;

     

    (C) ensuring
      compliance with the Securities Act and applicable state securities or blue
      sky
      laws;

     

    (D) if
      and at
      such time determined solely by the Sponsor at the request of the Holders,
      assisting in the designation of the Capital Securities for trading in the
      Private Offering, Resales and Trading through the Automatic Linkages (“PORTAL”)
      system if available;

     

    (E) the
      sending of notices (other than notices of default) and other information
      regarding the Securities and the Debentures to the Holders in accordance with
      this Declaration, including notice of any notice received from the Debenture
      Issuer of its election to defer payments of interest on the Debentures by
      extending the interest payment period under the Indenture;

     

    (F) the
      appointment of a Paying Agent, Transfer Agent and Registrar in accordance with
      this Declaration;

     

    (G) execution
      and delivery of the Securities in accordance with this Declaration;

     

    (H) execution
      and delivery of closing certificates pursuant to the Placement Agreement and
      the
      application for a taxpayer identification number;

     

    (I) unless
      otherwise determined by the Holders of a Majority in liquidation amount of
      the
      Securities or as otherwise required by the Statutory Trust Act, to execute
      on
      behalf of the Trust (either acting alone 

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    or
      together with any or all of the Administrators) any documents that the
      Administrators have the power to execute pursuant to this
      Declaration;

     

    (J) the
      taking of any action incidental to the foregoing as the Sponsor or an
      Administrator may from time to time determine is necessary or advisable to
      give
      effect to the terms of this Declaration for the benefit of the Holders (without
      consideration of the effect of any such action on any particular Holder);

     

    (K) to
      establish a record date with respect to all actions to be taken hereunder that
      require a record date be established, including Distributions, voting rights,
      redemptions and exchanges, and to issue relevant notices to the Holders of
      Capital Securities and Holders of Common Securities as to such actions and
      applicable record dates;

     

    (L) to
      duly
      prepare and file on behalf of the Trust all applicable tax returns and tax
      information reports that are required to be filed with respect to the Trust;
      

     

    (M) to
      negotiate the terms of, and the execution and delivery of, the Placement
      Agreement providing for the sale of the Capital Securities;

     

    (N) to
      employ
      or otherwise engage employees, agents (who may be designated as officers with
      titles), managers, contractors, advisors, attorneys and consultants and pay
      reasonable compensation for such services;

     

    (O) to
      incur
      expenses that are necessary or incidental to carry out any of the purposes
      of
      the Trust;

     

    (P) to
      give
      the certificate, substantially in the form of Exhibit D attached hereto,
      required by § 314(a)(4) of the Trust Indenture Act to the Institutional Trustee,
      which certificate may be executed by an Administrator; and 

     

    (Q)
       to
      take
      all action that may be necessary or appropriate for the preservation and the
      continuation of the Trust’s valid existence, rights, franchises and privileges
      as a statutory trust under the laws of each jurisdiction (other than the State
      of Delaware) in which such existence is necessary to protect the limited
      liability of the Holders of the Capital Securities or to enable the Trust to
      effect the purposes for which the Trust was created.

     

    (ii) As
      among
      the Trustees and the Administrators, the Institutional Trustee shall have the
      power, duty and authority, and is hereby authorized, to act on behalf of the
      Trust with respect to the following matters:

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (A) the
      establishment of the Property Account;

     

    (B) the
      receipt of the Debentures;

     

    (C) the
      collection of interest, principal and any other payments made in respect of
      the
      Debentures in the Property Account;

     

    (D) the
      distribution through the Paying Agent of amounts owed to the Holders in respect
      of the Securities;

     

    (E) the
      exercise of all of the rights, powers and privileges of a holder of the
      Debentures;

     

    (F) the
      sending of notices of default and other information regarding the Securities
      and
      the Debentures to the Holders in accordance with this Declaration;

     

    (G) the
      distribution of the Trust Property in accordance with the terms of this
      Declaration;

     

    (H) to
      the
      extent provided in this Declaration, the winding up of the affairs of and
      liquidation of the Trust and the preparation, execution and filing of the
      certificate of cancellation with the Secretary of State of the State of
      Delaware;

     

    (I) after
      any
      Event of Default (of which the Institutional Trustee has knowledge (as provided
      in Section 2.10(m) hereof)) (provided,
      that
      such Event of Default is not by or with respect to the Institutional Trustee),
      the taking of any action incidental to the foregoing as the Institutional
      Trustee may from time to time determine is necessary or advisable to give effect
      to the terms of this Declaration and protect and conserve the Trust Property
      for
      the benefit of the Holders (without consideration of the effect of any such
      action on any particular Holder); 

     

    (J) to
      take
      all action that may be necessary or appropriate for the preservation and the
      continuation of the Trust’s valid existence, rights, franchises and privileges
      as a statutory trust under the laws of the State of Delaware to protect the
      limited liability of the Holders of the Capital Securities or to enable the
      Trust to effect the purposes for which the Trust was created; and

     

    (K) to
      undertake any actions set forth in § 317(a) of the Trust Indenture
      Act.

     

    (iii) The
      Institutional Trustee shall have the power and authority, and is hereby
      authorized, to act on behalf of the Trust with respect to any of the duties,
      liabilities, powers or the authority of the Administrators set forth in Section
      

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    2.6(a)(i)(E)
      and (F) herein but shall not have a duty to do any such act unless specifically
      requested to do so in writing by the Sponsor, and shall then be fully protected
      in acting pursuant to such written request; and in the event of a conflict
      between the action of the Administrators and the action of the Institutional
      Trustee, the action of the Institutional Trustee shall prevail.

     

    (b) So
      long
      as this Declaration remains in effect, the Trust (or the Trustees or
      Administrators acting on behalf of the Trust) shall not undertake any business,
      activities or transaction except as expressly provided herein or contemplated
      hereby. In particular, neither the Trustees nor the Administrators may cause
      the
      Trust to (i) acquire any investments or engage in any activities not
      authorized by this Declaration, (ii) sell, assign, transfer, exchange,
      mortgage, pledge, set-off or otherwise dispose of any of the Trust Property
      or
      interests therein, including to Holders, except as expressly provided herein,
      (iii) take any action that would cause (or in the case of the Institutional
      Trustee, to the actual knowledge of a Responsible Officer would cause) the
      Trust
      to fail or cease to qualify as a “grantor trust” for United States federal
      income tax purposes, (iv) incur any indebtedness for borrowed money
      or
      issue any other debt or (v) take or consent to any action that would
      result
      in the placement of a lien on any of the Trust Property. The Institutional
      Trustee shall, at the sole cost and expense of the Trust subject to
      reimbursement under Section 9.6(a), defend all claims and demands of all Persons
      at any time claiming any lien on any of the Trust Property adverse to the
      interest of the Trust or the Holders in their capacity as Holders.

     

    (c) In
      connection with the issuance and sale of the Capital Securities, the Sponsor
      shall have the right and responsibility to assist the Trust with respect to,
      or
      effect on behalf of the Trust, the following (and any actions taken by the
      Sponsor in furtherance of the following prior to the date of this Declaration
      are hereby ratified and confirmed in all respects):

     

    (i) the
      taking of any action necessary to obtain an exemption from the Securities
      Act;

     

    (ii) the
      determination of the States in which to take appropriate action to qualify
      or
      register for sale all or part of the Capital Securities and the determination
      of
      any and all such acts, other than actions which must be taken by or on behalf
      of
      the Trust, and the advisement of and direction to the Trustees of actions they
      must take on behalf of the Trust, and the preparation for execution and filing
      of any documents to be executed and filed by the Trust or on behalf of the
      Trust, as the Sponsor deems necessary or advisable in order to comply with
      the
      applicable laws of any such States in connection with the sale of the Capital
      Securities; and

     

    (iii) the
      taking of any other actions necessary or desirable to carry out any of the
      foregoing activities.

     

    (d) Notwithstanding
      anything herein to the contrary, the Administrators, the Institutional Trustee
      and the Holders of a Majority in liquidation amount of the Common Securities
      are
      authorized and directed to conduct the affairs of the Trust and to operate
      the
      Trust 

     

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    so
      that
      (i) the Trust will not be deemed to be an “investment company” required to
      be registered under the Investment Company Act (in the case of the Institutional
      Trustee, to the actual knowledge of a Responsible Officer); (ii) the
      Trust
      will not fail to be classified as a grantor trust for United States federal
      income tax purposes (in the case of the Institutional Trustee, to the actual
      knowledge of a Responsible Officer); and (iii) the Trust will not take
      any
      action inconsistent with the treatment of the Debentures as indebtedness of
      the
      Debenture Issuer for United States federal income tax purposes (in the case
      of
      the Institutional Trustee, to the actual knowledge of a Responsible Officer).
      In
      this connection, the Institutional Trustee, the Administrators and the Holders
      of a Majority in liquidation amount of the Common Securities are authorized
      to
      take any action, not inconsistent with applicable laws or this Declaration,
      as
      amended from time to time, that each of the Institutional Trustee, the
      Administrators and such Holders determine in their discretion to be necessary
      or
      desirable for such purposes, even if such action adversely affects the interests
      of the Holders of the Capital Securities.

     

    (e) All
      expenses incurred by the Administrators or the Trustees pursuant to this Section
      2.6 shall be reimbursed by the Sponsor, and the Trustees shall have no
      obligations with respect to such expenses.

     

    (f) The
      assets of the Trust shall consist of the Trust Property.

     

    (g) Legal
      title to all Trust Property shall be vested at all times in the Institutional
      Trustee (in its capacity as such) and shall be held and administered by the
      Institutional Trustee for the benefit of the Trust in accordance with this
      Declaration.

     

    (h) If
      the
      Institutional Trustee or any Holder has instituted any proceeding to enforce
      any
      right or remedy under this Declaration and such proceeding has been discontinued
      or abandoned for any reason, or has been determined adversely to the
      Institutional Trustee or to such Holder, then and in every such case the
      Sponsor, the Institutional Trustee and the Holders shall, subject to any
      determination in such proceeding, be restored severally and respectively to
      their former positions hereunder, and thereafter all rights and remedies of
      the
      Institutional Trustee and the Holders shall continue as though no such
      proceeding had been instituted.

     

    Section
      2.7.  Prohibition
      of Actions by the Trust and the Trustees.
      

     

    The
      Trust
      shall not, and the Institutional Trustee and the Administrators shall not,
      and
      the Administrators shall cause the Trust not to, engage in any activity other
      than as required or authorized by this Declaration. In particular, the Trust
      shall not, and the Institutional Trustee and the Administrators shall not cause
      the Trust to:

     

    (a) invest
      any proceeds received by the Trust from holding the Debentures, but shall
      distribute all such proceeds to Holders of the Securities pursuant to the terms
      of this Declaration and of the Securities;

     

    (b) acquire
      any assets other than as expressly provided herein;

     

    (c) possess
      Trust Property for other than a Trust purpose;

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    (d) make
      any
      loans or incur any indebtedness other than loans represented by the
      Debentures;

     

    (e) possess
      any power or otherwise act in such a way as to vary the Trust Property or the
      terms of the Securities;

     

    (f) issue
      any
      securities or other evidences of beneficial ownership of, or beneficial interest
      in, the Trust other than the Securities; or

     

    (g) other
      than as provided in this Declaration (including Annex I), (i) direct the time,
      method and place of exercising any trust or power conferred upon the Debenture
      Trustee with respect to the Debentures, (ii) waive any past default that is
      waivable under the Indenture, (iii) exercise any right to rescind or annul
      any
      declaration that the principal of all the Debentures shall be due and payable,
      or (iv) consent to any amendment, modification or termination of the Indenture
      or the Debentures where such consent shall be required unless the Trust shall
      have received a written opinion of counsel experienced in such matters to the
      effect that such amendment, modification or termination will not cause the
      Trust
      to cease to be classified as a grantor trust for United States federal income
      tax purposes.

     

    Section
      2.8.  Powers
      and Duties of the Institutional Trustee.

     

    (a) The
      legal
      title to the Debentures shall be owned by and held of record in the name of
      the
      Institutional Trustee in trust for the benefit of the Trust. The right, title
      and interest of the Institutional Trustee to the Debentures shall vest
      automatically in each Person who may hereafter be appointed as Institutional
      Trustee in accordance with Section 4.7. Such vesting and cessation of title
      shall be effective whether or not conveyancing documents with regard to the
      Debentures have been executed and delivered.

     

    (b) The
      Institutional Trustee shall not transfer its right, title and interest in the
      Debentures to the Administrators or to the Delaware Trustee.

     

    (c) The
      Institutional Trustee shall:

     

    (i) establish
      and maintain a segregated non-interest bearing trust account (the “Property
      Account”) in the United States (as defined in Treasury Regulations section
      301.7701-7), in the name of and under the exclusive control of the Institutional
      Trustee, and maintained in the Institutional Trustee’s trust department, on
      behalf of the Holders of the Securities and, upon the receipt of payments of
      funds made in respect of the Debentures held by the Institutional Trustee,
      deposit such funds into the Property Account and make payments to the Holders
      of
      the Capital Securities and Holders of the Common Securities from the Property
      Account in accordance with Section 5.1. Funds in the Property Account shall
      be
      held uninvested until disbursed in accordance with this
      Declaration;

     

    
      
        
        

      

      
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    (ii) engage
      in
      such ministerial activities as shall be necessary or appropriate to effect
      the
      redemption of the Capital Securities and the Common Securities to the extent
      the
      Debentures are redeemed or mature; and

     

    (iii) upon
      written notice of distribution issued by the Administrators in accordance with
      the terms of the Securities, engage in such ministerial activities as shall
      be
      necessary or appropriate to effect the distribution of the Debentures to Holders
      of Securities upon the occurrence of certain circumstances pursuant to the
      terms
      of the Securities.

     

    (d) The
      Institutional Trustee shall take all actions and perform such duties as may
      be
      specifically required of the Institutional Trustee pursuant to the terms of
      the
      Securities.

     

    (e) The
      Institutional Trustee may bring or defend, pay, collect, compromise, arbitrate,
      resort to legal action with respect to, or otherwise adjust claims or demands
      of
      or against, the Trust (a “Legal Action”) which arise out of or in connection
      with an Event of Default of which a Responsible Officer of the Institutional
      Trustee has actual knowledge or the Institutional Trustee’s duties and
      obligations under this Declaration or the Trust Indenture Act; provided,
      however,
      that if
      an Event of Default has occurred and is continuing and such event is
      attributable to the failure of the Debenture Issuer to pay interest or premium,
      if any, or principal on the Debentures on the date such interest or premium,
      if
      any, or principal is otherwise payable (or in the case of redemption, on the
      redemption date), then a Holder of the Capital Securities may directly institute
      a proceeding for enforcement of payment to such Holder of the principal of
      or
      premium, if any, or interest on the Debentures having a principal amount equal
      to the aggregate liquidation amount of the Capital Securities of such Holder
      (a
“Direct Action”) on or after the respective due date specified in the
      Debentures. In connection with such Direct Action, the rights of the Holders
      of
      the Common Securities will be subrogated to the rights of such Holder of the
      Capital Securities to the extent of any payment made by the Debenture Issuer
      to
      such Holder of the Capital Securities in such Direct Action; provided,
      however,
      that a
      Holder of the Common Securities may exercise such right of subrogation only
      if
      no Event of Default with respect to the Capital Securities has occurred and
      is
      continuing.

     

    (f) The
      Institutional Trustee shall continue to serve as a Trustee until
      either:

     

    (i) the
      Trust
      has been completely liquidated and the proceeds of the liquidation distributed
      to the Holders of the Securities pursuant to the terms of the Securities and
      this Declaration (including Annex I); or 

     

    (ii) a
      Successor Institutional Trustee has been appointed and has accepted that
      appointment in accordance with Section 4.7. 

     

    (g) The
      Institutional Trustee shall have the legal power to exercise all of the rights,
      powers and privileges of a holder of the Debentures under the Indenture and,
      if
      an Event of Default occurs and is continuing, the Institutional Trustee may,
      for
      the benefit of Holders of the Securities, enforce its rights as holder of the
      Debentures subject to the rights of the Holders pursuant to this Declaration
      (including Annex I) and the terms of the Securities. 

     

    
      
        
        

      

      
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    (h) The
      Institutional Trustee must exercise the powers set forth in this Section 2.8
      in
      a manner that is consistent with the purposes and functions of the Trust set
      out
      in Section 2.3, and the Institutional Trustee shall not take any action that
      is
      inconsistent with the purposes and functions of the Trust set out in Section
      2.3.

     

    Section
      2.9.  Certain
      Duties and Responsibilities of the Trustees and the
      Administrators.

     

    (a) The
      Institutional Trustee, before the occurrence of any Event of Default (of which
      the Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof))
      and after the curing of all Events of Default that may have occurred, shall
      undertake to perform only such duties as are specifically set forth in this
      Declaration and no implied covenants shall be read into this Declaration against
      the Institutional Trustee. In case an Event of Default (of which the
      Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof)),
      has occurred (that has not been cured or waived pursuant to Section 6.7), the
      Institutional Trustee shall exercise such of the rights and powers vested in
      it
      by this Declaration, 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 his or her own affairs.

     

    (b) The
      duties and responsibilities of the Trustees and the Administrators shall be
      as
      provided by this Declaration and, in the case of the Institutional Trustee,
      by
      the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
      Declaration shall require any Trustee or Administrator to expend or risk its
      own
      funds or otherwise incur any financial liability in the performance of any
      of
      its duties hereunder, or in the exercise of any of its rights or powers, if
      it
      shall have reasonable grounds for believing that repayment of such funds or
      adequate indemnity satisfactory to it against such risk or liability is not
      reasonably assured to it. Whether or not therein expressly so provided, every
      provision of this Declaration relating to the conduct or affecting the liability
      of or affording protection to the Trustees or the Administrators shall be
      subject to the provisions of this Article. Nothing in this Declaration shall
      be
      construed to release a Trustee from liability for its own negligent action,
      its
      own negligent failure to act, or its own willful misconduct. Nothing in this
      Declaration shall be construed to release an Administrator from liability for
      its own gross negligent action, its own gross negligent failure to act, or
      its
      own willful misconduct. To the extent that, at law or in equity, a Trustee
      or an
      Administrator has duties and liabilities relating to the Trust or to the
      Holders, such Trustee or Administrator shall not be liable to the Trust or
      to
      any Holder for such Trustee’s or Administrator’s good faith reliance on the
      provisions of this Declaration. The provisions of this Declaration, to the
      extent that they restrict the duties and liabilities of the Administrators
      or
      the Trustees otherwise existing at law or in equity, are agreed by the Sponsor
      and the Holders to replace such other duties and liabilities of the
      Administrators or the Trustees.

     

    (c) All
      payments made by the Institutional Trustee or a Paying Agent in respect of
      the
      Securities shall be made only from the revenue and proceeds from the Trust
      Property and only to the extent that there shall be sufficient revenue or
      proceeds from the Trust Property to enable the Institutional Trustee or a Paying
      Agent to make payments in accordance with the terms hereof. Each Holder, by
      its
      acceptance of a Security, agrees that it will look solely to the revenue and
      proceeds from the Trust Property to the extent legally available for

     

    
      
        
        

      

      
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    distribution
      to it as herein provided and that the Trustees and the Administrators are not
      personally liable to it for any amount distributable in respect of any Security
      or for any other liability in respect of any Security. This Section 2.9(c)
      does
      not limit the liability of the Trustees expressly set forth elsewhere in this
      Declaration or, in the case of the Institutional Trustee, in the Trust Indenture
      Act.

     

    (d) No
      provision of this Declaration shall be construed to relieve the Institutional
      Trustee from liability for its own negligent action, its own negligent failure
      to act, or its own willful misconduct with respect to matters that are within
      the authority of the Institutional Trustee under this Declaration, except
      that:

     

    (i) the
      Institutional Trustee shall not be liable for any error or judgment made in
      good
      faith by an Authorized Officer of the Institutional Trustee, unless it shall
      be
      proved that the Institutional Trustee was negligent in ascertaining the
      pertinent facts;

     

    (ii) the
      Institutional 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
      Holders of not less than a Majority in liquidation amount of the Capital
      Securities or the Common Securities, as applicable, relating to the time, method
      and place of conducting any proceeding for any remedy available to the
      Institutional Trustee, or exercising any trust or power conferred upon the
      Institutional Trustee under this Declaration;

     

    (iii) the
      Institutional Trustee’s sole duty with respect to the custody, safe keeping and
      physical preservation of the Debentures and the Property Account shall be to
      deal with such property in a similar manner as the Institutional Trustee deals
      with similar property for its own account, subject to the protections and
      limitations on liability afforded to the Institutional Trustee under this
      Declaration and the Trust Indenture Act;

     

    (iv) the
      Institutional Trustee shall not be liable for any interest on any money received
      by it except as it may otherwise agree in writing with the Sponsor; and money
      held by the Institutional Trustee need not be segregated from other funds held
      by it except in relation to the Property Account maintained by the Institutional
      Trustee pursuant to Section 2.8(c)(i) and except to the extent otherwise
      required by law; and

     

    (v) the
      Institutional Trustee shall not be responsible for monitoring the compliance
      by
      the Administrators or the Sponsor with their respective duties under this
      Declaration, nor shall the Institutional Trustee be liable for any default
      or
      misconduct of the Administrators or the Sponsor.

     

    Section
      2.10.  Certain
      Rights of Institutional Trustee.
      Subject
      to the provisions of Section 2.9:

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

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

     

    (b) if
      (i) in performing its duties under this Declaration, the Institutional
      Trustee is required to decide between alternative courses of action,
      (ii) in construing any of the provisions of this Declaration, the
      Institutional Trustee finds the same ambiguous or inconsistent with any other
      provisions contained herein, or (iii) the Institutional Trustee is unsure
      of the application of any provision of this Declaration, then, except as to
      any
      matter as to which the Holders of Capital Securities are entitled to vote under
      the terms of this Declaration, the Institutional Trustee may deliver a notice
      to
      the Sponsor requesting the Sponsor’s opinion as to the course of action to be
      taken and the Institutional Trustee shall take such action, or refrain from
      taking such action, as the Institutional Trustee in its sole discretion shall
      deem advisable and in the best interests of the Holders, in which event the
      Institutional Trustee shall have no liability except for its own negligence
      or
      willful misconduct;

     

    (c) any
      direction or act of the Sponsor or the Administrators contemplated by this
      Declaration shall be sufficiently evidenced by an Officers’
      Certificate;

     

    (d) whenever
      in the administration of this Declaration, the Institutional Trustee shall
      deem
      it desirable that a matter be proved or established before undertaking,
      suffering or omitting any action hereunder, the Institutional Trustee (unless
      other evidence is herein specifically prescribed) may, in the absence of bad
      faith on its part, request and conclusively rely upon an Officers’ Certificate
      which, upon receipt of such request, shall be promptly delivered by the Sponsor
      or the Administrators;

     

    (e) the
      Institutional Trustee shall have no duty to see to any recording, filing or
      registration of any instrument (including any financing or continuation
      statement or any filing under tax or securities laws) or any rerecording,
      refiling or reregistration thereof;

     

    (f) the
      Institutional Trustee may consult with counsel of its selection (which counsel
      may be counsel to the Sponsor or any of its Affiliates) and the advice of such
      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
      reliance thereon and in accordance with such advice; the Institutional Trustee
      shall have the right at any time to seek instructions concerning the
      administration of this Declaration from any court of competent
      jurisdiction;

     

    (g) the
      Institutional Trustee shall be under no obligation to exercise any of the rights
      or powers vested in it by this Declaration at the request or direction of any
      of
      the Holders pursuant to this Declaration, unless such Holders shall have offered
      to the Institutional Trustee security or indemnity reasonably satisfactory
      to it
      against the costs, expenses and liabilities which might be incurred by it in
      compliance with such request or direction; provided,
      that

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     nothing
      contained in this Section 2.10(g) shall be taken to relieve the
      Institutional Trustee, upon the occurrence of an Event of Default (of which
      the
      Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof))
      that has not been cured or waived, of its obligation to exercise the rights
      and
      powers vested in it by this Declaration;

     

    (h) the
      Institutional 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,
      note or other evidence of indebtedness or other paper or document, unless
      requested in writing to do so by one or more Holders, but the Institutional
      Trustee may make such further inquiry or investigation into such facts or
      matters as it may see fit;

     

    (i) the
      Institutional Trustee may execute any of the trusts or powers hereunder or
      perform any duties hereunder either directly or by or through its agents or
      attorneys and the Institutional Trustee shall not be responsible for any
      misconduct or negligence on the part of, or for the supervision of, any such
      agent or attorney appointed with due care by it hereunder;

     

    (j) whenever
      in the administration of this Declaration the Institutional Trustee shall deem
      it desirable to receive instructions with respect to enforcing any remedy or
      right or taking any other action hereunder, the Institutional Trustee
      (i) may request instructions from the Holders of the Common Securities
      and
      the Capital Securities, which instructions may be given only by the Holders
      of
      the same proportion in liquidation amount of the Common Securities and the
      Capital Securities as would be entitled to direct the Institutional Trustee
      under the terms of the Common Securities and the Capital Securities in respect
      of such remedy, right or action, (ii) may refrain from enforcing such remedy
      or
      right or taking such other action until such instructions are received, and
      (iii) shall be fully protected in acting in accordance with such
      instructions;

     

    (k) except
      as
      otherwise expressly provided in this Declaration, the Institutional Trustee
      shall not be under any obligation to take any action that is discretionary
      under
      the provisions of this Declaration;

     

    (l) when
      the
      Institutional Trustee incurs expenses or renders services in connection with
      a
      Bankruptcy Event, such expenses (including the fees and expenses of its counsel)
      and the compensation for such services are intended to constitute expenses
      of
      administration under any bankruptcy law or law relating to creditors rights
      generally;

     

    (m) the
      Institutional Trustee shall not be charged with knowledge of an Event of Default
      unless a Responsible Officer of the Institutional Trustee has actual knowledge
      of such event or the Institutional Trustee receives written notice of such
      event
      from any Holder, except with respect to an Event of Default pursuant to Sections
      5.01(a), 5.01(b) or 5.01(c) of the Indenture (other than an Event of Default
      resulting from the default in the payment of Additional Interest or premium,
      if
      any, if the Institutional Trustee does not have actual knowledge or written
      notice that such payment is due and payable), of which the Institutional Trustee
      shall be deemed to have knowledge;

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    (n) any
      action taken by the Institutional Trustee or its agents hereunder shall bind
      the
      Trust and the Holders of the Securities, and the signature of the Institutional
      Trustee or its agents alone shall be sufficient and effective to perform any
      such action and no third party shall be required to inquire as to the authority
      of the Institutional Trustee to so act or as to its compliance with any of
      the
      terms and provisions of this Declaration, both of which shall be conclusively
      evidenced by the Institutional Trustee’s or its agent’s taking such action;
      and

     

    (o) no
      provision of this Declaration shall be deemed to impose any duty or obligation
      on the Institutional Trustee to perform any act or acts or exercise any right,
      power, duty or obligation conferred or imposed on it, in any jurisdiction in
      which it shall be illegal, or in which the Institutional Trustee shall be
      unqualified or incompetent in accordance with applicable law, to perform any
      such act or acts, or to exercise any such right, power, duty or obligation.
      No
      permissive power or authority available to the Institutional Trustee shall
      be
      construed to be a duty.

     

    Section
      2.11.  Delaware
      Trustee.
      Notwithstanding any other provision of this Declaration other than Section
      4.2,
      the Delaware Trustee shall not be entitled to exercise any powers, nor shall
      the
      Delaware Trustee have any of the duties and responsibilities of any of the
      Trustees or the Administrators described in this Declaration (except as may
      be
      required under the Statutory Trust Act). Except as set forth in Section 4.2,
      the
      Delaware Trustee shall be a Trustee for the sole and limited purpose of
      fulfilling the requirements of § 3807 of the Statutory Trust Act.

     

    Section
      2.12.  Execution
      of Documents.
      Unless
      otherwise determined in writing by the Institutional Trustee, and except as
      otherwise required by the Statutory Trust Act, the Institutional Trustee, or
      any
      one or more of the Administrators, as the case may be, is authorized to execute
      and deliver on behalf of the Trust any documents, agreements, instruments or
      certificates that the Trustees or the Administrators, as the case may be, have
      the power and authority to execute pursuant to Section 2.6.

     

    Section
      2.13.  Not
      Responsible for Recitals or Issuance of Securities.
      The
      recitals contained in this Declaration and the Securities shall be taken as
      the
      statements of the Sponsor, and the Trustees do not assume any responsibility
      for
      their correctness. The Trustees make no representations as to the value or
      condition of the property of the Trust or any part thereof. The Trustees make
      no
      representations as to the validity or sufficiency of this Declaration, the
      Debentures or the Securities.

     

    Section
      2.14.  Duration
      of Trust.
      The
      Trust, unless dissolved pursuant to the provisions of Article VII hereof, shall
      have existence for five (5) years from the Maturity Date.

     

    Section
      2.15.  Mergers
      (a) The
      Trust may not consolidate, amalgamate, merge with or into, or be replaced by,
      or
      convey, transfer or lease its properties and assets substantially as an entirety
      to any corporation or other Person, except as described in this Section 2.15
      and
      except with respect to the distribution of Debentures to Holders of Securities
      pursuant to Section 7.1(a)(iv) of the Declaration or Section 4 of Annex I.
      

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    (b) The
      Trust
      may, with the consent of the Administrators (which consent will not be
      unreasonably withheld) and without the consent of the Institutional Trustee,
      the
      Delaware Trustee or the Holders of the Capital Securities, consolidate,
      amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
      its properties and assets as an entirety or substantially as an entirety to
      a
      trust organized as such under the laws of any State; provided,
      that:

     

    (i) if
      the
      Trust is not the survivor, such successor entity (the “Successor Entity”)
      either:

     

    (A) expressly
      assumes all of the obligations of the Trust under the Securities; or

     

    (B) substitutes
      for the Securities other securities having substantially the same terms as
      the
      Securities (the “Successor Securities”) so that the Successor Securities rank
      the same as the Securities rank with respect to Distributions and payments
      upon
      Liquidation, redemption and otherwise;

     

    (ii) the
      Sponsor expressly appoints, as the holder of the Debentures, a trustee of the
      Successor Entity that possesses the same powers and duties as the Institutional
      Trustee; 

     

    (iii) the
      Capital Securities or any Successor Securities (excluding any securities
      substituted for the Common Securities) are listed or quoted, or any Successor
      Securities will be listed or quoted upon notification of issuance, on any
      national securities exchange or with another organization on which the Capital
      Securities are then listed or quoted, if any; 

     

    (iv) such
      merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
      does not cause the rating on the Capital Securities (including any Successor
      Securities) to be downgraded or withdrawn by any nationally recognized
      statistical rating organization, if the Capital Securities are then rated;
      

     

    (v) such
      merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
      does not adversely affect the rights, preferences and privileges of the Holders
      of the Securities (including any Successor Securities) in any material respect
      (other than with respect to any dilution of such Holders’ interests in the
      Successor Entity as a result of such merger, consolidation, amalgamation or
      replacement);

     

    (vi) such
      Successor Entity has a purpose substantially identical to that of the
      Trust;

     

    (vii) prior
      to
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease, the Trust has received a written opinion of a 

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    nationally
      recognized independent counsel to the Trust experienced in such matters to
      the
      effect that:

     

    (A) such
      merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
      does not adversely affect the rights, preferences and privileges of the Holders
      of the Securities (including any Successor Securities) in any material respect
      (other than with respect to any dilution of the Holders’ interests in the
      Successor Entity);

     

    (B) following
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease, neither the Trust nor the Successor Entity will be required to register
      as an Investment Company; and

     

    (C) following
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease, the Trust (or the Successor Entity) will continue to be classified as
      a
      grantor trust for United States federal income tax purposes; 

     

    (viii) the
      Sponsor guarantees the obligations of such Successor Entity under the Successor
      Securities to the same extent provided by the Indenture, the Guarantee, the
      Debentures and this Declaration; and

     

    (ix) prior
      to
      such merger, consolidation, amalgamation, replacement, conveyance, transfer
      or
      lease, the Institutional Trustee shall have received an Officers’ Certificate of
      the Administrators and an opinion of counsel, each to the effect that all
      conditions precedent of this paragraph (b) to such transaction have
      been
      satisfied.

     

    (c) Notwithstanding
      Section 2.15(b), the Trust shall not, except with the consent of Holders of
      100%
      in liquidation amount of the Securities, consolidate, amalgamate, merge with
      or
      into, or be replaced by, or convey, transfer or lease its properties and assets
      as an entirety or substantially as an entirety to, any other Person or permit
      any other Person to consolidate, amalgamate, merge with or into, or replace
      it
      if such consolidation, amalgamation, merger, replacement, conveyance, transfer
      or lease would cause the Trust or Successor Entity to be classified as other
      than a grantor trust for United States federal income tax purposes.

     

    ARTICLE
      III

     

    SPONSOR

     

    Section
      3.1.  Sponsor’s
      Purchase of Common Securities.
      On the
      Closing Date, the Sponsor will purchase all of the Common Securities issued
      by
      the Trust, in an amount at least equal to 3% of the capital of the Trust, at
      the
      same time as the Capital Securities are sold.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    Section
      3.2.  Responsibilities
      of the Sponsor.
      In
      connection with the issue and sale of the Capital Securities, the Sponsor shall
      have the exclusive right and responsibility to engage in, or direct the
      Administrators to engage in, the following activities:

     

    (a) to
      determine the States in which to take appropriate action to qualify or register
      for sale all or part of the Capital Securities and to do any and all such acts,
      other than actions which must be taken by the Trust, and advise the Trust of
      actions it must take, and prepare for execution and filing any documents to
      be
      executed and filed by the Trust, as the Sponsor deems necessary or advisable
      in
      order to comply with the applicable laws of any such States;

     

    (b) to
      prepare for filing and request the Administrators to cause the filing by the
      Trust, as may be appropriate, of an application to the PORTAL system, for
      listing or quotation upon notice of issuance of any Capital Securities, as
      requested by the Holders of not less than a Majority in liquidation amount
      of
      the Capital Securities; and

     

    (c) to
      negotiate the terms of and/or execute and deliver on behalf of the Trust, the
      Placement Agreement and other related agreements providing for the sale of
      the
      Capital Securities. 

     

    ARTICLE
      IV

     

    TRUSTEES
      AND ADMINISTRATORS

     

    Section
      4.1.  Number
      of Trustees.
      The
      number of Trustees initially shall be two, and: 

     

    (a) at
      any
      time before the issuance of any Securities, the Sponsor may, by written
      instrument, increase or decrease the number of Trustees; and

     

    (b) after
      the
      issuance of any Securities, the number of Trustees may be increased or decreased
      by vote of the Holder of a Majority in liquidation amount of the Common
      Securities voting as a class at a meeting of the Holder of the Common
      Securities; provided,
      however,
      that
      there shall be a Delaware Trustee if required by Section 4.2; and there shall
      always be one Trustee who shall be the Institutional Trustee, and such Trustee
      may also serve as Delaware Trustee if it meets the applicable requirements,
      in
      which case Section 2.11 shall have no application to such entity in its capacity
      as Institutional Trustee.

     

    Section
      4.2.  Delaware
      Trustee.
      If
      required by the Statutory Trust Act, one Trustee (the “Delaware Trustee”) shall
      be:

     

    (a) a
      natural
      person who is a resident of the State of Delaware; or 

     

    (b) if
      not a
      natural person, an entity which is organized under the laws of the United States
      or any State thereof or the District of Columbia, has its principal place of
      business in the State of Delaware, and otherwise meets the requirements of
      applicable law, including §3807 of the Statutory Trust Act.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    Section
      4.3.  Institutional
      Trustee; Eligibility.(a)There
      shall at all times be one Trustee which shall act as Institutional Trustee
      which
      shall:

     

    (i) not
      be an
      Affiliate of the Sponsor;

     

    (ii) not
      offer
      or provide credit or credit enhancement to the Trust; and

     

    (iii) be
      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 supervising or examining authority referred to above, then
      for the purposes of this Section 4.3(a)(iii), 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 report of condition so
      published. 

     

    (b) If
      at any
      time the Institutional Trustee shall cease to be eligible to so act under
      Section 4.3(a), the Institutional Trustee shall immediately resign in the manner
      and with the effect set forth in Section 4.7.

     

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

     

    (d) The
      initial Institutional Trustee shall be Wilmington Trust Company.

     

    Section
      4.4.  Certain
      Qualifications of the Delaware Trustee Generally.
      The
      Delaware Trustee shall be a U.S. Person and either a natural person who is
      at
      least 21 years of age or a legal entity that shall act through one or more
      Authorized Officers.

     

    Section
      4.5.  Administrators.
      Each
      Administrator shall be a U.S. Person. There shall at all times be at least
      one
      Administrator. Except where a requirement for action by a specific number of
      Administrators is expressly set forth in this Declaration and except with
      respect to any action the taking of which is the subject of a meeting of the
      Administrators, any action required or permitted to be taken by the
      Administrators may be taken by, and any power of the Administrators may be
      exercised by, or with the consent of, any one such Administrator acting
      alone.

     

    Section
      4.6.  Initial
      Delaware Trustee.
      The
      initial Delaware Trustee shall be Wilmington Trust Company.

     

    Section
      4.7.  Appointment,
      Removal and Resignation of the Trustees and the Administrators.
      

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    (a) No
      resignation or removal of any Trustee (the “Relevant Trustee”) and no
      appointment of a successor Trustee pursuant to this Article shall become
      effective until the acceptance of appointment by the successor Trustee in
      accordance with the applicable requirements of this
      Section 4.7.

     

    (b) Subject
      to Section 4.7(a), a Relevant Trustee may resign at any time by giving written
      notice thereof to the Holders of the Securities and by appointing a successor
      Relevant Trustee. Upon the resignation of the Institutional Trustee, the
      Institutional Trustee shall appoint a successor by requesting from at least
      three Persons meeting the eligibility requirements their expenses and charges
      to
      serve as the successor Institutional Trustee on a form provided by the
      Administrators, and selecting the Person who agrees to the lowest expense and
      charges (the “Successor Institutional Trustee”). If the instrument of acceptance
      by the successor Relevant Trustee required by this Section 4.7 shall not have
      been delivered to the Relevant Trustee within 60 days after the giving of such
      notice of resignation or delivery of the instrument of removal, the Relevant
      Trustee may petition, at the expense of the Trust, any federal, State or
      District of Columbia court of competent jurisdiction for the appointment of
      a
      successor Relevant Trustee. Such court may thereupon, after prescribing such
      notice, if any, as it may deem proper, appoint a Relevant Trustee. The
      Institutional Trustee shall have no liability for the selection of such
      successor pursuant to this Section 4.7.

     

    (c) Unless
      an
      Event of Default shall have occurred and be continuing, any Trustee may be
      removed at any time by an act of the Holders of a Majority in liquidation amount
      of the Common Securities. If any Trustee shall be so removed, the Holders of
      the
      Common Securities, by act of the Holders of a Majority in liquidation amount
      of
      the Common Securities delivered to the Relevant Trustee, shall promptly appoint
      a successor Relevant Trustee, and such successor Trustee shall comply with
      the
      applicable requirements of this Section 4.7. If an Event of Default shall have
      occurred and be continuing, the Institutional Trustee or the Delaware Trustee,
      or both of them, may be removed by the act of the Holders of a Majority in
      liquidation amount of the Capital Securities, delivered to the Relevant Trustee
      (in its individual capacity and on behalf of the Trust). If any Trustee shall
      be
      so removed, the Holders of Capital Securities, by act of the Holders of a
      Majority in liquidation amount of the Capital Securities then outstanding
      delivered to the Relevant Trustee, shall promptly appoint a successor Relevant
      Trustee or Trustees, and such successor Trustee shall comply with the applicable
      requirements of this Section 4.7. If no successor Relevant Trustee shall have
      been so appointed by the Holders of a Majority in liquidation amount of the
      Capital Securities and accepted appointment in the manner required by this
      Section 4.7 within 30 days after delivery of an instrument of removal, the
      Relevant Trustee or any Holder who has been a Holder of the Securities for
      at
      least six months may, on behalf of himself and all others similarly situated,
      petition any federal, State or District of Columbia court of competent
      jurisdiction for the appointment of a successor Relevant Trustee. Such court
      may
      thereupon, after prescribing such notice, if any, as it may deem proper, appoint
      a successor Relevant Trustee or Trustees. 

     

    (d) The
      Institutional Trustee shall give notice of each resignation and each removal
      of
      a Trustee and each appointment of a successor Trustee to all Holders and to
      the
      Sponsor. Each notice shall include the name of the successor Relevant Trustee
      and the address of its Corporate Trust Office if it is the Institutional
      Trustee.

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    (e) Notwithstanding
      the foregoing or any other provision of this Declaration, in the event a
      Delaware Trustee who is a natural person dies or is adjudged by a court to
      have
      become incompetent or incapacitated, the vacancy created by such death,
      incompetence or incapacity may be filled by the Institutional Trustee following
      the procedures in this Section 4.7 (with the successor being a Person who
      satisfies the eligibility requirement for a Delaware Trustee set forth in this
      Declaration) (the “Successor Delaware Trustee”).

     

    (f) In
      case
      of the appointment hereunder of a successor Relevant Trustee, the retiring
      Relevant Trustee and each successor Relevant Trustee with respect to the
      Securities shall execute and deliver an amendment hereto wherein each successor
      Relevant Trustee shall accept such appointment and which (i) shall contain
      such
      provisions as shall be necessary or desirable to transfer and confirm to, and
      to
      vest in, each successor Relevant Trustee all the rights, powers, trusts and
      duties of the retiring Relevant Trustee with respect to the Securities and
      the
      Trust and (ii) shall add to or change any of the provisions of this Declaration
      as shall be necessary to provide for or facilitate the administration of the
      Trust by more than one Relevant Trustee, it being understood that nothing herein
      or in such amendment shall constitute such Relevant Trustees co-trustees and
      upon the execution and delivery of such amendment the resignation or removal
      of
      the retiring Relevant Trustee shall become effective to the extent provided
      therein and each such successor Relevant Trustee, without any further act,
      deed
      or conveyance, shall become vested with all the rights, powers, trusts and
      duties of the retiring Relevant Trustee; but, on request of the Trust or any
      successor Relevant Trustee, such retiring Relevant Trustee shall duly assign,
      transfer and deliver to such successor Relevant Trustee all Trust Property,
      all
      proceeds thereof and money held by such retiring Relevant Trustee hereunder
      with
      respect to the Securities and the Trust subject to the payment of all unpaid
      fees, expenses and indemnities of such retiring Relevant Trustee.

     

    (g) No
      Institutional Trustee or Delaware Trustee shall be liable for the acts or
      omissions to act of any Successor Institutional Trustee or Successor Delaware
      Trustee, as the case may be. 

     

    (h) The
      Holders of the Capital Securities will have no right to vote to appoint, remove
      or replace the Administrators, which voting rights are vested exclusively in
      the
      Holders of the Common Securities.

     

    (i) Any
      successor Delaware Trustee shall file an amendment to the Certificate of Trust
      with the Secretary of State of the State of Delaware identifying the name and
      principal place of business of such Delaware Trustee in the State of
      Delaware.

     

    Section
      4.8.  Vacancies
      Among Trustees.
      If a
      Trustee ceases to hold office for any reason and the number of Trustees is
      not
      reduced pursuant to Section 4.1, or if the number of Trustees is increased
      pursuant to Section 4.1, a vacancy shall occur. A resolution certifying the
      existence of such vacancy by the Trustees or, if there are more than two, a
      majority of the Trustees shall be conclusive evidence of the existence of such
      vacancy. The vacancy shall be filled with a Trustee appointed in accordance
      with
      Section 4.7.

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    Section
      4.9.  Effect
      of Vacancies.
      The
      death, resignation, retirement, removal, bankruptcy, dissolution, liquidation,
      incompetence or incapacity to perform the duties of a Trustee shall not operate
      to dissolve, terminate or annul the Trust or terminate this Declaration.
      Whenever a vacancy in the number of Trustees shall occur, until such vacancy
      is
      filled by the appointment of a Trustee in accordance with Section 4.7, the
      Institutional Trustee shall have all the powers granted to the Trustees and
      shall discharge all the duties imposed upon the Trustees by this Declaration.
      

     

    Section
      4.10.  Meetings
      of the Trustees and the Administrators.
      Meetings of the Trustees or the Administrators shall be held from time to time
      upon the call of any Trustee or Administrator, as applicable. Regular meetings
      of the Trustees and the Administrators, respectively, may be in person in the
      United States or by telephone, at a place (if applicable) and time fixed by
      resolution of the Trustees or the Administrators, as applicable. Notice of
      any
      in-person meetings of the Trustees or the Administrators shall be hand delivered
      or otherwise delivered in writing (including by facsimile, with a hard copy
      by
      overnight courier) not less than 48 hours before such meeting. Notice of any
      telephonic meetings of the Trustees or the Administrators or any committee
      thereof shall be hand delivered or otherwise delivered in writing (including
      by
      facsimile, with a hard copy by overnight courier) not less than 24 hours before
      a meeting. Notices shall contain a brief statement of the time, place and
      anticipated purposes of the meeting. The presence (whether in person or by
      telephone) of a Trustee or an Administrator, as the case may be, at a meeting
      shall constitute a waiver of notice of such meeting except where a Trustee
      or an
      Administrator, as the case may be, attends a meeting for the express purpose
      of
      objecting to the transaction of any activity on the ground that the meeting
      has
      not been lawfully called or convened. Unless provided otherwise in this
      Declaration, any action of the Trustees or the Administrators, as the case
      may
      be, may be taken at a meeting by vote of a majority of the Trustees or the
      Administrators present (whether in person or by telephone) and eligible to
      vote
      with respect to such matter; provided,
      that,
      in the case of the Administrators, a Quorum is present, or without a meeting
      by
      the unanimous written consent of the Trustees or the Administrators, as the
      case
      may be. Meetings of the Trustees and the Administrators together shall be held
      from time to time upon the call of any Trustee or Administrator.

     

    Section
      4.11.  Delegation
      of Power.
      (a) Any
      Trustee or any Administrator, as the case may be, may, by power of attorney
      consistent with applicable law, delegate to any other natural person over the
      age of 21 that is a U.S. Person his or her power for the purpose of executing
      any documents, instruments or other writings contemplated in Section
      2.6.

     

    (b) The
      Trustees shall have power to delegate from time to time to such of their number
      or to any officer of the Trust that is a U.S. Person, the doing of such things
      and the execution of such instruments or other writings either in the name
      of
      the Trust or the names of the Trustees or otherwise as the Trustees may deem
      expedient, to the extent such delegation is not prohibited by applicable law
      or
      contrary to the provisions of the Trust, as set forth herein.

     

    Section
      4.12.  Merger,
      Conversion, Consolidation or Succession to Business.
      Any
      Person into which the Institutional Trustee or the Delaware Trustee, as the
      case
      may be, may be merged or converted or with which either may be consolidated,
      or
      any Person resulting 

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        
from
        any
        merger, conversion or consolidation to which the Institutional Trustee or
        the
        Delaware Trustee, as the case may be, shall be a party, or any Person succeeding
        to all or substantially all the corporate trust business of the Institutional
        Trustee or the Delaware Trustee, as the case may be, shall be the successor
        of
        the Institutional Trustee or the Delaware Trustee, as the case may be,
        hereunder, without the execution or filing of any paper or any further act
        on
        the part of any of the parties hereto, provided such Person shall be otherwise
        qualified and eligible under this Article and, provided,
        further,
        that
        such Person shall file an amendment to the Certificate of Trust with the
        Secretary of State of the State of Delaware as contemplated in Section
        4.7(i).

    

     

    ARTICLE
      V

     

    DISTRIBUTIONS

     

    Section
      5.1.  Distributions.
      Holders
      shall receive Distributions in accordance with the applicable terms of the
      relevant Holder’s Securities. Distributions shall be made on the Capital
      Securities and the Common Securities in accordance with the preferences set
      forth in their respective terms. If and to the extent that the Debenture Issuer
      makes a payment of interest (including any Additional Interest or Deferred
      Interest) or premium, if any, on and/or principal on the Debentures held by
      the
      Institutional Trustee (the amount of any such payment being a “Payment Amount”),
      the Institutional Trustee shall and is directed, to the extent funds are
      available in the Property Account for that purpose, to make a distribution
      (a
“Distribution”) of the Payment Amount to Holders. For
      the
      avoidance of doubt, funds in the Property Account shall not be distributed
      to
      Holders to the extent of any taxes payable by the Trust, in the case of
      withholding taxes, as determined by the Institutional Trustee or any Paying
      Agent and, in the case of taxes other than withholding taxes, as determined
      by
      the Administrators in a written notice to the Institutional
      Trustee.

     

    ARTICLE
      VI  

     

    ISSUANCE
      OF SECURITIES

     

    Section
      6.1.  General
      Provisions Regarding Securities.
      

     

    (a) The
      Administrators shall on behalf of the Trust issue one series of capital
      securities, evidenced by a certificate substantially in the form of
      Exhibit A-1, representing undivided beneficial interests in the assets
      of
      the Trust and having such terms as are set forth in Annex I (the “Capital
      Securities”), and one series of common securities, evidenced by a certificate
      substantially in the form of Exhibit A-2, representing undivided beneficial
      interests in the assets of the Trust and having such terms as are set forth
      in
      Annex I (the “Common Securities”). The Trust shall issue no securities or
      other interests in the assets of the Trust other than the Capital Securities
      and
      the Common Securities. The Capital Securities rank pari
      passu
      and
      payment thereon shall be made Pro Rata with the Common Securities except that,
      where an Event of Default has occurred and is continuing, the rights of Holders
      of the Common Securities to payment in respect of Distributions and payments
      upon liquidation, redemption and otherwise are subordinated to the rights to
      payment of the Holders of the Capital Securities.

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    (b) The
      Certificates shall be signed on behalf of the Trust by one or more
      Administrators. Such signature shall be the facsimile or manual signature of
      any
      Administrator. In case any Administrator of the Trust who shall have signed
      any
      of the Securities shall cease to be such Administrator before the Certificates
      so signed shall be delivered by the Trust, such Certificates nevertheless may
      be
      delivered as though the person who signed such Certificates had not ceased
      to be
      such Administrator. Any Certificate may be signed on behalf of the Trust by
      such
      person who, at the actual date of execution of such Certificate, shall be an
      Administrator of the Trust, although at the date of the execution and delivery
      of the Declaration any such person was not such an Administrator. A Capital
      Security shall not be valid until the Certificate evidencing it is authenticated
      by the manual or facsimile signature of an Authorized Officer of the
      Institutional Trustee. Such signature shall be conclusive evidence that the
      Certificate evidencing such Capital Security has been authenticated under this
      Declaration. Upon written order of the Trust signed by one Administrator, the
      Institutional Trustee shall authenticate one or more Certificates evidencing
      the
      Capital Securities for original issue. The Institutional Trustee may appoint
      an
      authenticating agent that is a U.S. Person acceptable to the Trust to
      authenticate Certificates evidencing the Capital Securities. A Common Security
      need not be so authenticated and shall be valid upon execution by one or more
      Administrators.

     

    (c) The
      consideration received by the Trust for the issuance of the Securities shall
      constitute a contribution to the capital of the Trust and shall not constitute
      a
      loan to the Trust.

     

    (d) Upon
      issuance of the Securities as provided in this Declaration, the Securities
      so
      issued shall be deemed to be validly issued, fully paid and non-assessable,
      and
      each Holder thereof shall be entitled to the benefits provided by this
      Declaration.

     

    (e) Every
      Person, by virtue of having become a Holder in accordance with the terms of
      this
      Declaration, shall be deemed to have expressly assented and agreed to the terms
      of, and shall be bound by, this Declaration and the Guarantee.

     

    Section
      6.2.  Paying
      Agent, Transfer Agent, Calculation Agent and Registrar.
      

     

    (a) The
      Trust
      shall maintain in Wilmington, Delaware, an office or agency where the Securities
      may be presented for payment (the “Paying Agent”), and an office or agency where
      Securities may be presented for registration of transfer or exchange (the
“Transfer Agent”). The Trust shall keep or cause to be kept at such office or
      agency a register (the “Securities Register”) for the purpose of registering
      Securities and transfers and exchanges of Securities, such Securities Register
      to be held by a registrar (the “Registrar”). The Administrators may appoint the
      Paying Agent, the Registrar and the Transfer Agent, and may appoint one or
      more
      additional Paying Agents, one or more co-Registrars, or one or more co-Transfer
      Agents in such other locations as it shall determine. The term “Paying Agent”
      includes any additional Paying Agent, the term “Registrar” includes any
      additional Registrar or co-Registrar and the term “Transfer Agent” includes any
      additional Transfer Agent or co-Transfer Agent. The Administrators may change
      any Paying Agent, Transfer Agent or Registrar at any time without prior notice
      to any Holder. The Administrators shall notify the Institutional Trustee of
      the
      name and address of any Paying Agent, Transfer Agent and Registrar not a party
      to this 

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        
Declaration.
        The Administrators hereby initially appoint the Institutional Trustee to
        act as
        Paying Agent, Transfer Agent and Registrar for the Capital Securities and
        the
        Common Securities at its Corporate Trust Office. The Institutional Trustee
        or
        any of its Affiliates in the United States may act as Paying Agent, Transfer
        Agent or Registrar.

    

     

    (b) The
      Trust
      shall also appoint a Calculation Agent, which shall determine the Coupon Rate
      in
      accordance with the terms of the Securities. The Trust initially appoints the
      Institutional Trustee as Calculation Agent.

     

    Section
      6.3.  Form
      and Dating.
      

     

    (a) The
      Capital Securities shall be evidenced by one or more Certificates and the
      Institutional Trustee’s certificate of authentication thereon shall be
      substantially in the form of Exhibit A-1, and the Common Securities shall be
      evidenced by one or more Certificates substantially in the form of
      Exhibit A-2, each of which is hereby incorporated in and expressly made
      a
      part of this Declaration. Certificates may be typed, printed, lithographed
      or
      engraved or may be produced in any other manner as is reasonably acceptable
      to
      the Administrators, as conclusively evidenced by their execution thereof.
      Certificates evidencing Securities may have letters, numbers, notations or
      other
      marks of identification or designation and such legends or endorsements required
      by law, stock exchange rule, agreements to which the Trust is subject, if any,
      or usage (provided,
      that
      any such notation, legend or endorsement is in a form acceptable to the
      Sponsor). The Trust at the direction of the Sponsor shall furnish any such
      legend not contained in Exhibit A-1 to the Institutional Trustee in writing.
      Each Capital Security Certificate shall be dated the date of its authentication.
      The terms and provisions of the Securities set forth in Annex I and the forms
      of
      Certificates set forth in Exhibits A-1 and A-2 are part of the terms
      of
      this Declaration and to the extent applicable, the Institutional Trustee, the
      Delaware Trustee, the Administrators and the Sponsor, by their execution and
      delivery of this Declaration, expressly agree to such terms and provisions
      and
      to be bound thereby. Capital Securities will be issued only in blocks having
      an
      aggregate liquidation amount of not less than $100,000.

     

    (b) The
      Capital Securities are being offered and sold by the Trust pursuant to the
      Placement Agreement in definitive form, registered in the name of the Holder
      thereof, without coupons and with the Restricted Securities Legend.

     

    Section
      6.4.  Mutilated,
      Destroyed, Lost or Stolen Certificates.
      If:

     

    (a) any
      mutilated Certificate should be surrendered to the Registrar, or if the
      Registrar shall receive evidence to its satisfaction of the destruction, loss
      or
      theft of any Certificate; and

     

    (b) the
      related Holder shall deliver to the Registrar, the Administrators and the
      Institutional Trustee such security or indemnity as may be required by them
      to
      keep each of them harmless; then, in the absence of notice that such Certificate
      shall have been acquired by a bona fide purchaser, an Administrator on behalf
      of
      the Trust shall execute (and in the case of a Capital Security Certificate,
      the
      Institutional Trustee shall authenticate) and deliver to such Holder, in
      exchange for or in lieu of any such mutilated, destroyed, lost or stolen
      Certificate, a new 

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        
Certificate
        of like denomination. In connection with the issuance of any new Certificate
        under this Section 6.4, the Registrar or the Administrators may require such
        Holder to pay a sum sufficient to cover any tax or other governmental charge
        that may be imposed in connection therewith. Any Certificate executed and
        delivered pursuant to this Section shall constitute conclusive evidence of
        an
        ownership interest in the relevant Securities, as if originally issued, whether
        or not the lost, stolen or destroyed Certificate shall be found at any time.
        

    

     

    Section
      6.5.  Temporary
      Certificates.
      Until
      definitive Certificates are ready for delivery, the Administrators may prepare
      and execute on behalf of the Trust and, in the case of Capital Security
      Certificates, the Institutional Trustee shall authenticate, temporary
      Certificates. Temporary Certificates shall be substantially in the form of
      definitive Certificates but may have variations that the Administrators consider
      appropriate for temporary Certificates. Without unreasonable delay, the
      Administrators shall prepare and execute on behalf of the Trust and, in the
      case
      of the Capital Security Certificates, the Institutional Trustee shall
      authenticate definitive Certificates in exchange for temporary
      Certificates.

     

    Section
      6.6.  Cancellation.
      The
      Administrators at any time may deliver Certificates evidencing Securities to
      the
      Institutional Trustee for cancellation. The Registrar shall forward to the
      Institutional Trustee any Certificates evidencing Securities surrendered to
      it
      for registration of transfer, redemption or payment. The Institutional Trustee
      shall promptly cancel all Certificates surrendered for registration of transfer,
      payment, replacement or cancellation and shall dispose of such canceled
      Certificates as the Administrators direct. The Administrators may not issue
      new
      Certificates to replace Certificates evidencing Securities that have been paid
      or, except for Certificates surrendered for purposes of the transfer or exchange
      of the Securities evidenced thereby, that have been delivered to the
      Institutional Trustee for cancellation.

     

    Section
      6.7.  Rights
      of Holders; Waivers of Past Defaults.

     

    (a) The
      legal
      title to the Trust Property is vested exclusively in the Institutional Trustee
      (in its capacity as such) in accordance with Section 2.5, and the Holders shall
      not have any right or title therein other than the undivided beneficial interest
      in the assets of the Trust conferred by their Securities and they shall have
      no
      right to call for any partition or division of property, profits or rights
      of
      the Trust except as described below. The Securities shall be personal property
      giving only the rights specifically set forth therein and in this Declaration.
      The Securities shall have no, and the issuance of the Securities shall not
      be
      subject to, preemptive or other similar rights and when issued and delivered
      to
      Holders against payment of the purchase price therefor, the Securities will
      be
      fully paid and nonassessable by the Trust.

     

    (b) For
      so
      long as any Capital Securities remain outstanding, if, upon an Indenture Event
      of Default pursuant to Section 5.01(b), 5.01(e) or 5.01(f) of the Indenture
      the
      Debenture Trustee fails or the holders of not less than 25% in principal amount
      of the outstanding Debentures fail to declare the principal of all of the
      Debentures to be immediately due and payable, the Holders of not less than
      a
      Majority in liquidation amount of the Capital Securities then outstanding shall
      have the right to make such declaration by a notice in writing to the
      Institutional Trustee, the Sponsor and the Debenture Trustee.

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    (c) At
      any
      time after the acceleration of maturity of the Debentures has been made and
      before a judgment or decree for payment of the money due has been obtained
      by
      the Debenture Trustee as provided in the Indenture, if the Institutional
      Trustee, subject to the provisions hereof, fails to annul any such acceleration
      and waive such default, the Holders of not less than a Majority in liquidation
      amount of the Capital Securities, by written notice to the Institutional
      Trustee, the Sponsor and the Debenture Trustee, may rescind and annul such
      acceleration and its consequences if:

     

    (i) the
      Sponsor has paid or deposited with the Debenture Trustee a sum sufficient to
      pay

     

    (A) all
      overdue installments of interest on all of the Debentures;

     

    (B) any
      accrued Deferred Interest on all of the Debentures;

     

    (C) all
      payments on any Debentures that have become due otherwise than by such
      acceleration and interest and Deferred Interest thereon at the rate borne by
      the
      Debentures; and

     

    (D) all
      sums
      paid or advanced by the Debenture Trustee under the Indenture and the reasonable
      compensation, documented expenses, disbursements and advances of the Debenture
      Trustee and the Institutional Trustee, their agents and counsel;
      and

     

    (ii) all
      Events of Default with respect to the Debentures, other than the non-payment
      of
      the principal of or premium, if any on the Debentures that has become due solely
      by such acceleration, have been cured or waived as provided in Section 5.07
      of
      the Indenture.

     

    (d) The
      Holders of not less than a Majority in liquidation amount of the Capital
      Securities may, on behalf of the Holders of all the Capital Securities, waive
      any past Default or Event of Default, except a Default or Event of Default
      in
      the payment of principal, premium, if any, or interest (unless such Default
      or
      Event of Default has been cured and a sum sufficient to pay all matured
      installments of interest and principal due otherwise than by acceleration has
      been deposited with the Debenture Trustee) or a default or Event of Default
      in
      respect of a covenant or provision that under the Indenture cannot be modified
      or amended without the consent of the holder of each outstanding Debenture.
      No
      such rescission shall affect any subsequent default or impair any right
      consequent thereon.

     

    (e) Upon
      receipt by the Institutional Trustee of written notice declaring such an
      acceleration, or rescission and annulment thereof, by Holders of any part of
      the
      Capital Securities, a record date shall be established for determining Holders
      of outstanding Capital Securities entitled to join in such notice, which record
      date shall be at the close of business on the day the Institutional Trustee
      receives such notice. The Holders on such record date, or their duly designated
      proxies, and only such Persons, shall be entitled to join in such notice,
      whether or not such Holders remain Holders after such record date; provided,
      that,
      unless such 

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        
declaration
        of acceleration, or rescission and annulment, as the case may be, shall have
        become effective by virtue of the requisite percentage having joined in such
        notice prior to the day that is 90 days after such record date, such notice
        of
        declaration of acceleration, or rescission and annulment, as the case may
        be,
        shall automatically and without further action by any Holder be canceled
        and of
        no further effect. Nothing in this paragraph shall prevent a Holder, or a
        proxy
        of a Holder, from giving, after expiration of such 90-day period, a new written
        notice of declaration of acceleration, or rescission and annulment thereof,
        as
        the case may be, that is identical to a written notice that has been canceled
        pursuant to the proviso to the preceding sentence, in which event a new record
        date shall be established pursuant to the provisions of this Section
        6.7.

    

     

    (f) Except
      as
      otherwise provided in this Section 6.7, the Holders of not less than a Majority
      in liquidation amount of the Capital Securities may, on behalf of the Holders
      of
      all the Capital Securities, waive any past Default or Event of Default and
      its
      consequences. Upon such waiver, any such Default or Event of Default shall
      cease
      to exist, and any Default or Event of Default arising therefrom shall be deemed
      to have been cured, for every purpose of this Declaration, but no such waiver
      shall extend to any subsequent or other Default or Event of Default or impair
      any right consequent thereon.

     

    ARTICLE
      VII

     

    DISSOLUTION
      AND TERMINATION OF TRUST

     

    Section
      7.1.  Dissolution
      and Termination of Trust.
      (a)The
      Trust
      shall dissolve on the first to occur of : 

     

    (i) unless
      earlier dissolved, on November 23, 2040, the expiration of the term of the
      Trust;

     

    (ii) a
      Bankruptcy Event with respect to the Sponsor, the Trust or the Debenture
      Issuer;

     

    (iii) (other
      than in connection with a merger, consolidation or similar transaction not
      prohibited by the Indenture, this Declaration or the Guarantee, as the case
      may
      be) the filing of a certificate of dissolution or its equivalent with respect
      to
      the Sponsor or upon the revocation of the charter of the Sponsor and the
      expiration of 90 days after the date of revocation without a reinstatement
      thereof;

     

    (iv) the
      distribution of the Debentures to the Holders of the Securities, upon exercise
      of the right of the Holders of all of the outstanding Common Securities to
      dissolve the Trust as provided in Annex I hereto;

     

    (v) the
      entry
      of a decree of judicial dissolution of any Holder of the Common Securities,
      the
      Sponsor, the Trust or the Debenture Issuer;

     

    (vi) when
      all
      of the Securities shall have been called for redemption and the amounts
      necessary for redemption thereof shall have been paid to the Holders in
      accordance with the terms of the Securities; or

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    (vii) before
      the issuance of any Securities, with the consent of all of the Trustees and
      the
      Sponsor.

     

    (b) As
      soon
      as is practicable after the occurrence of an event referred to in Section
      7.1(a), and after satisfaction of liabilities to creditors of the Trust as
      required by applicable law, including Section 3808 of the Statutory Trust Act,
      and subject to the terms set forth in Annex I, the Institutional Trustee shall
      terminate the Trust by filing a certificate of cancellation with the Secretary
      of State of the State of Delaware.

     

    (c) The
      provisions of Section 2.9 and Article IX shall survive the termination of the
      Trust.

     

    ARTICLE
      VIII

     

    TRANSFER
      OF INTERESTS

     

    Section
      8.1.  General.
      (a)Where
      a
      Holder of Capital Securities delivers to the Registrar in accordance with this
      Declaration a request to register a transfer of such Holder's Capital Securities
      or to exchange them for an equal aggregate liquidation amount of Capital
      Securities represented by different Certificates, the Registrar shall register
      the transfer or make the exchange when the requirements specified in this
      Article VIII for such transfer or exchange are met. To facilitate registrations
      of transfers and exchanges, the Trust shall execute and the Institutional
      Trustee shall authenticate Capital Security Certificates at the Registrar's
      request.

     

    (b) Upon
      issuance of the Common Securities, the Sponsor shall acquire and retain
      beneficial and record ownership of the Common Securities and, for so long as
      the
      Securities remain outstanding, the Sponsor shall maintain 100% ownership of
      the
      Common Securities; provided,
      however,
      that
      any permitted successor of the Sponsor under the Indenture that is a U.S. Person
      may succeed to the Sponsor’s ownership of the Common Securities.

     

    (c) Capital
      Securities may only be transferred, in whole or in part, in accordance with
      the
      terms and conditions set forth in this Declaration and in the terms of the
      Capital Securities. To the fullest extent permitted by applicable law, any
      transfer or purported transfer of any Security not made in accordance with
      this
      Declaration shall be null and void and will be deemed to be of no legal effect
      whatsoever and any such purported transferee shall be deemed not to be the
      Holder of such Capital Securities for any purpose, including, but not limited
      to, the receipt of Distributions on such Capital Securities, and such transferee
      shall be deemed to have no interest whatsoever in such Capital
      Securities.

     

    (d) The
      Registrar shall provide in the Securities Register for the registration of
      Securities and of transfers of Securities, which will be effected without charge
      but only upon payment (with such indemnity as the Registrar may reasonably
      require) in respect of any tax or other governmental charges that may be imposed
      in relation to it. Upon its receipt of the documents required under this Section
      8.1(d) for registration of transfer of any Securities, the Registrar shall
      register in the Securities Register, in the name of the designated transferee
      or
      transferees, the Securities being transferred and thereupon, for all purposes
      of
      this Declaration, 

     

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        
such
        transfer shall be effective and such transferee or transferees shall be,
        and
        such transferor shall no longer be, the Holder of the transferred Securities.
        Upon the registration of transfer of a Security pursuant to the terms of
        this
        Declaration in the name of the new Holder thereof, such Security shall
        constitute the same Security as the Security so transferred and shall be
        entitled to the same benefits under this Declaration as the Security so
        transferred. The Registrar shall, and is authorized to, record and register
        in
        the Securities Register the transfer of a Security upon the Registrar's receipt
        of originals or copies (which may be by facsimile or other form of electronic
        transmission) of (i) a written instrument of transfer in form reasonably
        satisfactory to the Registrar duly executed by the Holder or such Holder's
        attorney duly authorized in writing, and (ii) if such Security is being
        transferred other than
        in
        accordance with Section 8.4, a certificate substantially in the form set
        forth
        as Exhibit B or C,
        as
        applicable, hereto, executed by the transferor or transferee, as applicable;
        thereupon, the Registrar is authorized to confirm in writing to the transferee
        and, if requested, to the transferor of such Security that such transfer
        has
        been registered in the Securities Register and that such transferee is the
        Holder of such Security. The Certificate evidencing the Security so transferred,
        duly endorsed by the transferor, shall be surrendered to the Registrar at
        the
        time the transfer conditions specified in the immediately preceding sentence
        are
        satisfied or within five (5) Business Days after the Registrar has registered
        the transfer of such Security on the Securities Register, and promptly after
        such surrender, an Administrator on behalf of the Trust shall execute and,
        in
        the case of a Capital Security Certificate, the Institutional Trustee shall,
        and
        is authorized to, authenticate a Certificate in the name of the transferee
        as
        the new Holder of the Security evidenced thereby. Until the Certificate
        evidencing the Security so transferred is surrendered to the Registrar, such
        Security may not be transferred by such new Holder. Each Certificate surrendered
        in connection with a registration of transfer shall be canceled by the
        Institutional Trustee pursuant to Section 6.6. A transferee of a Security
        shall
        be entitled to the rights and subject to the obligations of a Holder hereunder
        upon the registration of such transfer in the Securities Register. Each such
        transferee shall be deemed to have agreed to be bound by this
        Declaration.

    

     

    (e) Neither
      the Trust nor the Registrar shall be required (i) to issue Certificates
      representing Securities or register the transfer of or exchange any Securities,
      during a period beginning at the opening of business 15 days before the day
      of
      any selection of Securities for redemption and ending at the close of business
      on the earliest date on which the relevant notice of redemption is deemed to
      have been given to all Holders of the Securities to be redeemed, or (ii) to
      register the transfer or exchange of any Security so selected for redemption
      in
      whole or in part, except the unredeemed portion of any Security being redeemed
      in part.

     

    Section
      8.2.  Transfer
      Procedures and Restrictions.
      

     

    (a) The
      Certificates evidencing Capital Securities shall bear the Restricted Securities
      Legend (as defined below), which shall not be removed unless there is delivered
      to the Trust such satisfactory evidence, which may include an opinion of counsel
      reasonably acceptable to the Trustee, as may be reasonably required by the
      Trust, that neither the Restricted Securities Legend nor the restrictions on
      transfer set forth therein are required to ensure that transfers thereof comply
      with the provisions of the Securities Act or to ensure that such Securities
      are
      not “restricted” within the meaning of Rule 144 under the Securities Act. Upon
      provision of such satisfactory evidence, the Institutional Trustee, at the
      written direction of the Trust, shall 

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        
authenticate
        and deliver Capital Securities Certificates that do not bear the Restricted
        Securities Legend in exchange for the Capital Securities Certificates bearing
        the Restricted Securities Legend.

    

     

    (b) Without
      the written consent of the Sponsor, Capital Securities may only be transferred:
      (i) to a QIB if the instrument of transfer is accompanied by a certificate
      of
      the transferor substantially in the form set forth as Exhibit C hereto; or
      (ii)
      otherwise than to a QIB if the instrument of transfer is accompanied by a
      certificate of the transferee substantially in the form set forth as Exhibit
      B
      hereto. Each certificate furnished pursuant to this Section 8.2(b) may be an
      original or a copy (which may be furnished by facsimile or other form of
      electronic transmission).

     

    (c) Except
      as
      permitted by Section 8.2(a), each Certificate evidencing a Capital Security
      shall bear a legend (the “Restricted Securities Legend”) in substantially the
      following form:

     

    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 DEBENTURE ISSUER OR THE
      TRUST, (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 SUCH AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT
      WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
      VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
      FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
      DEBENTURE ISSUER’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
      TRANSFER PURSUANT TO CLAUSES (C) OR (D) ABOVE TO REQUIRE THE DELIVERY OF AN
      OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
      EACH
      OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A
      COPY
      OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUER OR 

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        
THE
        TRUST. 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 AND HOLDING
      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 AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT THE
      TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

     

    THIS
      SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
      LIQUIDATION 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 LIQUIDATION
      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 

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        
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.

    

     

    (d) Capital
      Securities may only be transferred in minimum blocks of $100,000 aggregate
      liquidation amount (100 Capital Securities) and multiples of $1,000 in excess
      thereof. Any attempted transfer of Capital Securities in a block having an
      aggregate liquidation 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 a Holder of such Capital Securities for any purpose, including, but
      not limited to, the receipt of Distributions on such Capital Securities, and
      such purported transferee shall be deemed to have no interest whatsoever in
      such
      Capital Securities.

     

    Section
      8.3.  Deemed
      Security Holders.
      The
      Trust, the Administrators, the Trustees, the Paying Agent, the Transfer Agent
      or
      the Registrar may treat the Person in whose name any Security shall be
      registered on the Securities Register of the Trust as the sole Holder and owner
      of such Security for purposes of receiving Distributions and for all other
      purposes whatsoever and, accordingly, shall not be bound to recognize any
      equitable or other claim to or interest in such Security on the part of any
      other Person, whether or not the Trust, the Administrators, the Trustees, the
      Paying Agent, the Transfer Agent or the Registrar shall have actual or other
      notice thereof.

     

    Section
      8.4.  Transfer
      of Initial Securities.
      Notwithstanding
      the foregoing provisions
      of this Article VIII or any other provision of this Declaration (including
      all
      Annexes
      and
      Exhibits hereto) to the contrary, any or all of the Capital Securities initially
      issued to SCP Warehouse (the "Initial Securities") may be transferred by SCP
      Warehouse to any transferee selected by it that meets the parameters specified
      below and, upon delivery to the Registrar, of originals or copies (which may
      be
      by facsimile or other form of electronic transmission) of a written instrument
      of transfer in form reasonably satisfactory to the Registrar duly executed
      by
      SCP Warehouse or SCP Warehouse's attorney duly authorized in writing (it being
      understood that no signature guarantee shall be required), then the Registrar
      shall, and is authorized to, record and register on the Securities Register
      the
      transfer of such Initial Securities to such transferee; thereupon, the Registrar
      is authorized to confirm in writing to the transferee and, if requested, to
      the
      transferor of such Initial Securities that such transfer has been registered
      in
      the Securities Register and that such transferee is the Holder of such Initial
      Securities; provided, however,
      that SCP
      Warehouse, by its acceptance thereof, agrees that it may not transfer any
      Initial Securities to any transferee that is not a permitted transferee as
      provided herein and in the legend attached to the Certificate representing
      any
      Capital Security. The Certificate evidencing the Initial Securities to be
      transferred, duly endorsed by SCP Warehouse, shall be surrendered to the
      Registrar at the time the transfer conditions specified in the immediately
      preceding sentence are satisfied or within five (5) Business Days after the
      Registrar has registered the transfer of such Initial Securities in the
      Securities Register, and promptly after such surrender, an Administrator on
      behalf of the Trust shall execute and, in the case of a Capital Security
      Certificate, the Institutional Trustee shall, and is authorized to, authenticate
      a Certificate in the name of the transferee as the new Holder of the Initial
      Securities evidenced thereby. Until the 

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        
Certificate
        evidencing the Initial Securities so transferred is surrendered to the
        Registrar, such Initial Securities may not be transferred by such new Holder.
        No
        other conditions, restrictions or other provisions of this Declaration or
        any
        other document shall apply to a transfer of Initial Securities by SCP
        Warehouse.

    

     

    ARTICLE
      IX

     

    LIMITATION
      OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

     

    Section
      9.1.  Liability.
      (a)Except
      as
      expressly set forth in this Declaration, the Guarantee and the terms of the
      Securities, the Sponsor shall not be:

     

    (i) personally
      liable for the return of any portion of the capital contributions (or any return
      thereon) of the Holders of the Securities which shall be made solely from assets
      of the Trust; and

     

    (ii) required
      to pay to the Trust or to any Holder of the Securities any deficit upon
      dissolution of the Trust or otherwise.

     

    (b) The
      Holder of the Common Securities shall be liable for all of the debts and
      obligations of the Trust (other than with respect to the Securities) to the
      extent not satisfied out of the Trust’s assets.

     

    (c) Pursuant
      to § 3803(a) of the Statutory Trust Act, the Holders of the Securities shall be
      entitled to the same limitation of personal liability extended to stockholders
      of private corporations for profit organized under the General Corporation
      Law
      of the State of Delaware, except as otherwise specifically set forth
      herein.

     

    Section
      9.2.  Exculpation.
      (a)No
      Indemnified Person shall be liable, responsible or accountable in damages or
      otherwise to the Trust or any Covered Person for any loss, damage or claim
      incurred by reason of any act or omission performed or omitted by such
      Indemnified Person in good faith on behalf of the Trust and in a manner such
      Indemnified Person reasonably believed to be within the scope of the authority
      conferred on such Indemnified Person by this Declaration or by law, except
      that
      an Indemnified Person (other than an Administrator) shall be liable for any
      such
      loss, damage or claim incurred by reason of such Indemnified Person’s negligence
      or willful misconduct with respect to such acts or omissions and except that
      an
      Administrator shall be liable for any such loss, damage or claim incurred by
      reason of such Administrator’s gross negligence or willful misconduct with
      respect to such acts or omissions.

     

    (b) An
      Indemnified Person shall be fully protected in relying in good faith upon the
      records of the Trust and upon such information, opinions, reports or statements
      presented to the Trust by any Person as to matters the Indemnified Person
      reasonably believes are within such other Person’s professional or expert
      competence and, if selected by such Indemnified Person, has been selected by
      such Indemnified Person with reasonable care by or on behalf of the Trust,
      including information, opinions, reports or statements as to the value and
      amount of the assets, liabilities, profits, losses or any other facts pertinent
      to the existence and 

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        
amount
        of
        assets from which Distributions to Holders of Securities might properly be
        paid.

    

     

    Section
      9.3.  Fiduciary
      Duty.
      (a)To
      the
      extent that, at law or in equity, an Indemnified Person has duties (including
      fiduciary duties) and liabilities relating thereto to the Trust or to any other
      Covered Person, an Indemnified Person acting under this Declaration shall not
      be
      liable to the Trust or to any other Covered Person for its good faith reliance
      on the provisions of this Declaration. The provisions of this Declaration,
      to
      the extent that they restrict the duties and liabilities of an Indemnified
      Person otherwise existing at law or in equity (other than the duties imposed
      on
      the Institutional Trustee under the Trust Indenture Act), are agreed by the
      parties hereto to replace such other duties and liabilities of the Indemnified
      Person.

     

    (b) Whenever
      in this Declaration an Indemnified Person is permitted or required to make
      a
      decision:

     

    (i) in
      its
“discretion” or under a grant of similar authority, the Indemnified Person shall
      be entitled to consider such interests and factors as it desires, including
      its
      own interests, and shall have no duty or obligation to give any consideration
      to
      any interest of or factors affecting the Trust or any other Person;
      or

     

    (ii) in
      its
“good faith” or under another express standard, the Indemnified Person shall act
      under such express standard and shall not be subject to any other or different
      standard imposed by this Declaration or by applicable law.

     

    Section
      9.4.  Indemnification.
      (a) (i)
      The Sponsor shall indemnify, to the fullest extent permitted by law, any
      Indemnified Person who was or is a party or is threatened to be made a party
      to
      any threatened, pending or completed action, suit or proceeding, whether civil,
      criminal, administrative or investigative (other than an action by or in the
      right of the Trust) by reason of the fact that such Person is or was an
      Indemnified Person against expenses (including attorneys’ fees and expenses),
      judgments, fines and amounts paid in settlement actually and reasonably incurred
      by such Person in connection with such action, suit or proceeding if such Person
      acted in good faith and in a manner such Person reasonably believed to be in
      or
      not opposed to the best interests of the Trust, and, with respect to any
      criminal action or proceeding, had no reasonable cause to believe such conduct
      was unlawful. The termination of any action, suit or proceeding by judgment,
      order, settlement, conviction, or upon a plea of nolo contendere or its
      equivalent, shall not, of itself, create a presumption that the Indemnified
      Person did not act in good faith and in a manner which such Person reasonably
      believed to be in or not opposed to the best interests of the Trust, and, with
      respect to any criminal action or proceeding, had reasonable cause to believe
      that such conduct was unlawful.

     

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

    (ii) The
      Sponsor shall indemnify, to the fullest extent permitted by law, any Indemnified
      Person who was or is a party or is threatened to be made a party to any
      threatened, pending or completed action or suit by or in the right of the Trust
      to procure a judgment in its favor by reason of the fact that such Person is
      or
      was an Indemnified Person against expenses (including attorneys’ fees and
      expenses) actually and reasonably incurred by such Person in connection with
      the
      defense or settlement of such action or suit if such Person acted in good faith
      and in a manner such Person reasonably believed to be in or not opposed to
      the
      best interests of the Trust and except that no such indemnification shall be
      made in respect of any claim, issue or matter as to which such Indemnified
      Person shall have been adjudged to be liable to the Trust unless and only to
      the
      extent that the Court of Chancery of Delaware or the court in which such action
      or suit was brought shall determine upon application that, despite the
      adjudication of liability but in view of all the circumstances of the case,
      such
      Person is fairly and reasonably entitled to indemnity for such expenses which
      such Court of Chancery or such other court shall deem proper.

     

    (iii) To
      the
      extent that an Indemnified Person shall be successful on the merits or otherwise
      (including dismissal of an action without prejudice or the settlement of an
      action without admission of liability) in defense of any action, suit or
      proceeding referred to in paragraphs (i) and (ii) of this Section 9.4(a), or
      in
      defense of any claim, issue or matter therein, such Person shall be indemnified,
      to the fullest extent permitted by law, against expenses (including attorneys’
      fees and expenses) actually and reasonably incurred by such Person in connection
      therewith.

     

    (iv) Any
      indemnification of an Administrator under paragraphs (i) and (ii) of this
      Section 9.4(a) (unless ordered by a court) shall be made by the Sponsor only
      as
      authorized in the specific case upon a determination that indemnification of
      the
      Indemnified Person is proper in the circumstances because such Person has met
      the applicable standard of conduct set forth in paragraphs (i) and (ii). Such
      determination shall be made (A) by the Administrators by a majority vote of
      a
      Quorum consisting of such Administrators who were not parties to such action,
      suit or proceeding, (B) if such a Quorum is not obtainable, or, even if
      obtainable, if a Quorum of disinterested Administrators so directs, by
      independent legal counsel in a written opinion, or (C) by the Common Security
      Holder of the Trust.

     

    (v) To
      the
      fullest extent permitted by law, expenses (including attorneys’ fees and
      expenses) incurred by an Indemnified Person in defending a civil, criminal,
      administrative or investigative action, suit or proceeding referred to in
      paragraphs (i) and (ii) of this Section 9.4(a) shall be paid by the Sponsor
      in
      advance of the final disposition of such action, suit or proceeding upon receipt
      of an undertaking by or on behalf of such Indemnified Person to repay such
      amount if it shall ultimately be determined that such Person is not entitled
      to
      be indemnified by the Sponsor as authorized in this Section 9.4(a).
      Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
      determination is 

     

    
      
        
        

      

      
        -42-

        
          

        

      

      
        
        
reasonably
        and promptly made (1) in the case of a Company Indemnified Person (A) by
        the
        Administrators by a majority vote of a Quorum of disinterested Administrators,
        (B) if such a Quorum is not obtainable, or, even if obtainable, if a Quorum
        of
        disinterested Administrators so directs, by independent legal counsel in
        a
        written opinion or (C) by the Common Security Holder of the Trust, that,
        based
        upon the facts known to the Administrators, counsel or the Common Security
        Holder at the time such determination is made, such Indemnified Person acted
        in
        bad faith or in a manner that such Person either believed to be opposed to
        or
        did not believe to be in the best interests of the Trust, or, with respect
        to
        any criminal proceeding, that such Indemnified Person believed or had reasonable
        cause to believe such conduct was unlawful, or (2) in the case of a Fiduciary
        Indemnified Person, by independent legal counsel in a written opinion that,
        based upon the facts known to the counsel at the time such determination
        is
        made, such Indemnified Person acted in bad faith or in a manner that such
        Indemnified Person either believed to be opposed to or did not believe to
        be in
        the best interests of the Trust, or, with respect to any criminal proceeding,
        that such Indemnified Person believed or had reasonable cause to believe
        such
        conduct was unlawful. In no event shall any advance be made (i) to a Company
        Indemnified Person in instances where the Administrators, independent legal
        counsel or the Common Security Holder reasonably determine that such Person
        deliberately breached such Person’s duty to the Trust or its Common or Capital
        Security Holders or (ii) to a Fiduciary Indemnified Person in instances where
        independent legal counsel promptly and reasonably determines in a written
        opinion that such Person deliberately breached such Person’s duty to the Trust
        or its Common or Capital Security Holders.

    

     

    (b) The
      Sponsor shall indemnify, to the fullest extent permitted by applicable law,
      each
      Indemnified Person from and against any and all loss, damage, liability, tax
      (other than taxes based on the income of such Indemnified Person), penalty,
      expense or claim of any kind or nature whatsoever incurred by such Indemnified
      Person arising out of or in connection with or by reason of the creation,
      administration or termination of the Trust, or any act or omission of such
      Indemnified Person in good faith on behalf of the Trust and in a manner such
      Indemnified Person reasonably believed to be within the scope of authority
      conferred on such Indemnified Person by this Declaration, except that no
      Indemnified Person shall be entitled to be indemnified in respect of any loss,
      damage, liability, tax, penalty, expense or claim incurred by such Indemnified
      Person by reason of negligence or willful misconduct with respect to such acts
      or omissions.

     

    (c) The
      indemnification and advancement of expenses provided by, or granted pursuant
      to,
      the other paragraphs of this Section 9.4 shall not be deemed exclusive of any
      other rights to which those seeking indemnification and advancement of expenses
      may be entitled under any agreement, vote of stockholders or disinterested
      directors of the Sponsor or Capital Security Holders of the Trust or otherwise,
      both as to action in such Person’s official capacity and as to action in another
      capacity while holding such office. All rights to indemnification under this
      Section 9.4 shall be deemed to be provided by a contract between the Sponsor
      and
      each Indemnified Person who serves in such capacity at any time while this
      Section 9.4 is in 

     

    
      
        
        

      

      
        -43-

        
          

        

      

      
        
        
effect.
        Any repeal or modification of this Section 9.4 shall not affect any rights
        or
        obligations then existing.

    

     

    (d) The
      Sponsor or the Trust may purchase and maintain insurance on behalf of any Person
      who is or was an Indemnified Person against any liability asserted against
      such
      Person and incurred by such Person in any such capacity, or arising out of
      such
      Person’s status as such, whether or not the Sponsor would have the power to
      indemnify such Person against such liability under the provisions of this
      Section 9.4.

     

    (e) For
      purposes of this Section 9.4, references to “the Trust” shall include, in
      addition to the resulting or surviving entity, any constituent entity (including
      any constituent of a constituent) absorbed in a consolidation or merger, so
      that
      any Person who is or was a director, trustee, officer or employee of such
      constituent entity, or is or was serving at the request of such constituent
      entity as a director, trustee, officer, employee or agent of another entity,
      shall stand in the same position under the provisions of this Section 9.4 with
      respect to the resulting or surviving entity as such Person would have with
      respect to such constituent entity if its separate existence had
      continued.

     

    (f) The
      indemnification and advancement of expenses provided by, or granted pursuant
      to,
      this Section 9.4 shall, unless otherwise provided when authorized or ratified,
      continue as to a Person who has ceased to be an Indemnified Person and shall
      inure to the benefit of the heirs, executors and administrators of such a
      Person.

     

    (g) The
      provisions of this Section 9.4 shall survive the termination of this Declaration
      or the earlier resignation or removal of the Institutional Trustee. The
      obligations of the Sponsor under this Section 9.4 to compensate and indemnify
      the Trustees and to pay or reimburse the Trustees for expenses, disbursements
      and advances shall constitute additional indebtedness hereunder. Such additional
      indebtedness shall be secured by a lien prior to that of the Securities upon
      all
      property and funds held or collected by the Trustees as such, except funds
      held
      in trust for the benefit of the Holders of particular Capital Securities,
provided,
      that
      the Sponsor is the Holder of the Common Securities. 

     

    Section
      9.5.  Outside
      Businesses.
      Any
      Covered Person, the Sponsor, the Delaware Trustee and the Institutional Trustee
      (subject to Section 4.3(c)) may engage in or possess an interest in other
      business ventures of any nature or description, independently or with others,
      similar or dissimilar to the business of the Trust, and the Trust and the
      Holders of Securities shall have no rights by virtue of this Declaration in
      and
      to such independent ventures or the income or profits derived therefrom, and
      the
      pursuit of any such venture, even if competitive with the business of the Trust,
      shall not be deemed wrongful or improper. None of any Covered Person, the
      Sponsor, the Delaware Trustee or the Institutional Trustee shall be obligated
      to
      present any particular investment or other opportunity to the Trust even if
      such
      opportunity is of a character that, if presented to the Trust, could be taken
      by
      the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the
      Institutional Trustee shall have the right to take for its own account
      (individually or as a partner or fiduciary) or to recommend to others any such
      particular investment or other opportunity. Any Covered Person, the Delaware
      Trustee and the Institutional Trustee may engage or be interested in any
      financial or other 

     

    
      
        
        

      

      
        -44-

        
          

        

      

      
        
        
transaction
        with the Sponsor or any Affiliate of the Sponsor, or may act as depositary
        for,
        trustee or agent for, or act on any committee or body of holders of, securities
        or other obligations of the Sponsor or its Affiliates.

    

     

    Section
      9.6.  Compensation;
      Fee.
      (a)        The
      Sponsor agrees:

     

    (i) to
      pay to
      the Trustees from time to time such compensation for all services rendered
      by
      them hereunder as the parties shall agree in writing from time to time (which
      compensation shall not be limited by any provision of law in regard to the
      compensation of a trustee of an express trust); and

     

    (ii) except
      as
      otherwise expressly provided herein, to reimburse the Trustees upon request
      for
      all reasonable, documented expenses, disbursements and advances incurred or
      made
      by the Trustees in accordance with any provision of this Declaration (including
      the reasonable compensation and the expenses and disbursements of their
      respective agents and counsel), except any such expense, disbursement or advance
      attributable to their negligence or willful misconduct.

     

    (b) The
      provisions of this Section 9.6 shall survive the dissolution of the
      Trust
      and the termination of this Declaration and the removal or resignation of any
      Trustee.

     

    ARTICLE
      X  

     

    

     

    ACCOUNTING

     

    Section
      10.1.  Fiscal
      Year.
      The
      fiscal year (the “Fiscal Year”) of the Trust shall be the calendar year, or such
      other year as is required by the Code.

     

    Section
      10.2.  Certain
      Accounting Matters.
      

     

    (a) At
      all
      times during the existence of the Trust, the Administrators shall keep, or
      cause
      to be kept at the principal office of the Trust in the United States, as defined
      for purposes of Treasury Regulations section 301.7701-7, full books of account,
      records and supporting documents, which shall reflect in reasonable detail
      each
      transaction of the Trust. The books of account shall be maintained on the
      accrual method of accounting, in accordance with generally accepted accounting
      principles, consistently applied.

     

    (b) The
      Sponsor shall cause the Administrators to deliver to each Holder of the
      Securities: (i) if the Sponsor 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, (ii) if the Sponsor is not then required
      to
      file form FR Y-9C, the audited financial statements (or, if no audited financial
      statements are prepared, the unaudited financial statements) of the Sponsor
      and
      any Subsidiaries within 90 days after the end of the Fiscal Year, and
      (iii) within 90 days after the end of each Fiscal Year of the Trust,
      annual
      financial statements of the Trust, including a balance sheet of the

     

    
      
        
        

      

      
        -45-

        
          

        

      

      
        
        
 Trust
        as of the end of such Fiscal Year, and the statements of income or loss for
        the
        Fiscal Year then ended, that are prepared at the principal office of the
        Trust
        in the United States, as defined for purposes of Treasury Regulations section
        301.7701-7.

    

     

    (c) The
      Administrators shall cause to be duly prepared and delivered to each of the
      Holders of Securities Form 1099 or such other annual United States federal
      income tax information statement required by the Code, containing such
      information with regard to the Securities held by each Holder as is required
      by
      the Code and the Treasury Regulations. Notwithstanding any right under the
      Code
      to deliver any such statement at a later date, the Administrators shall endeavor
      to deliver all such statements within 30 days after the end of each Fiscal
      Year
      of the Trust.

     

    (d) The
      Administrators shall cause to be duly prepared in the United States, as defined
      for purposes of Treasury Regulations section 301.7701-7, and filed an annual
      United States federal income tax return on a Form 1041 or such other form
      required by United States federal income tax law, and any other annual income
      tax returns required to be filed by the Administrators on behalf of the Trust
      with any state or local taxing authority.

     

    (e) So
      long
      as the only Holder or beneficial owner 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 Administrators will cause the Sponsor’s
      reports on FR Y-9C, FR Y-9LP and FR Y-6 to be delivered to the Holder promptly
      following their filing with the Federal Reserve. 

     

    Section
      10.3.  Banking.
      The
      Trust shall maintain one or more bank accounts in the United States, as defined
      for purposes of Treasury Regulations section 301.7701-7, in the name and for
      the
      sole benefit of the Trust; provided,
      however,
      that
      all payments of funds in respect of the Debentures held by the Institutional
      Trustee shall be made directly to the Property Account and no other funds of
      the
      Trust shall be deposited in the Property Account. The sole signatories for
      such
      accounts (including the Property Account) shall be designated by the
      Institutional Trustee.

     

    Section
      10.4.  Withholding.
      The
      Institutional Trustee or any Paying Agent and the Administrators shall comply
      with all withholding requirements under United States federal, state and local
      law. The Institutional Trustee or any Paying Agent shall request, and each
      Holder shall provide to the Institutional Trustee or any Paying Agent, such
      forms or certificates as are necessary to establish an exemption from
      withholding with respect to the Holder, and any representations and forms as
      shall reasonably be requested by the Institutional Trustee or any Paying Agent
      to assist it in determining the extent of, and in fulfilling, its withholding
      obligations. The Administrators shall file required forms with applicable
      jurisdictions and, unless an exemption from withholding is properly established
      by a Holder, shall remit amounts withheld with respect to the Holder to
      applicable jurisdictions. To the extent that the Institutional Trustee or any
      Paying Agent is required to withhold and pay over any amounts to any authority
      with respect to distributions or allocations to any Holder, the amount withheld
      shall be deemed to be a Distribution to the Holder in the amount of the
      withholding. In the event of any claimed overwithholding, Holders shall be
      limited to an action against the applicable

     

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        
 jurisdiction.
        If the amount required to be withheld was not withheld from actual Distributions
        made, the Institutional Trustee or any Paying Agent may reduce subsequent
        Distributions by the amount of such withholding.

    

     

    ARTICLE
      XI

     

    AMENDMENTS
      AND MEETINGS

     

    Section
      11.1.  Amendments.
      (a)
      Except as otherwise provided in this Declaration or by any applicable terms
      of
      the Securities, this Declaration may only be amended by a written instrument
      approved and executed by

     

    (i) the
      Institutional Trustee, 

     

    (ii) if
      the
      amendment affects the rights, powers, duties, obligations or immunities of
      the
      Delaware Trustee, the Delaware Trustee,

     

    (iii) if
      the
      amendment affects the rights, powers, duties, obligations or immunities of
      the
      Administrators, the Administrators, and

     

    (iv) the
      Holders of a Majority in liquidation amount of the Common
      Securities.

     

    (b) Notwithstanding
      any other provision of this Article XI, no amendment shall be made, and any
      such
      purported amendment shall be void and ineffective:

     

    (i) unless
      the Institutional Trustee shall have first received

     

    (A) an
      Officers’ Certificate from each of the Trust and the Sponsor that such amendment
      is permitted by, and conforms to, the terms of this Declaration (including
      the
      terms of the Securities); and

     

    (B) an
      opinion of counsel (who may be counsel to the Sponsor or the Trust) that such
      amendment is permitted by, and conforms to, the terms of this Declaration
      (including the terms of the Securities) and that all conditions precedent to
      the
      execution and delivery of such amendment have been satisfied; or

     

    (ii) if
      the
      result of such amendment would be to

     

    (A) cause
      the
      Trust to cease to be classified for purposes of United States federal income
      taxation as a grantor trust;

     

    (B) reduce
      or
      otherwise adversely affect the powers of the Institutional Trustee in
      contravention of the Trust Indenture Act; 

     

    
      
        
        

      

      
        -47-

        
          

        

      

      
        
        

      

    

    (C) cause
      the
      Trust to be deemed to be an Investment Company required to be registered under
      the Investment Company Act; or

     

    (D) cause
      the
      Debenture Issuer to be unable to treat an amount equal to the Liquidation Amount
      of the Debentures as “Tier 1 Capital” (or its equivalent) for purposes of the
      capital adequacy guidelines of the Federal Reserve (or any successor regulatory
      authority with jurisdiction over bank holding companies).

     

    (c) Except
      as
      provided in Section 11.1(d), (e) or (g), no amendment shall be made,
      and
      any such purported amendment shall be void and ineffective, unless the Holders
      of a Majority in liquidation amount of the Capital Securities shall have
      consented to such amendment.

     

    (d) In
      addition to and notwithstanding any other provision in this Declaration, without
      the consent of each affected Holder, this Declaration may not be amended to
      (i)
      change the amount or timing of any Distribution on the Securities or otherwise
      adversely affect the amount of any Distribution required to be made in respect
      of the Securities as of a specified date or (ii) restrict the right of a Holder
      to institute suit for the enforcement of any such payment on or after such
      date.

     

    (e) Sections
      9.1(b) and 9.1(c) and this Section 11.1 shall not be amended without the consent
      of all of the Holders of the Securities.

     

    (f) The
      rights of the Holders of the Capital Securities and Common Securities, as
      applicable, under Article IV to increase or decrease the number of, and appoint
      and remove, Trustees shall not be amended without the consent of the Holders
      of
      a Majority in liquidation amount of the Capital Securities or Common Securities,
      as applicable.

     

    (g) This
      Declaration may be amended by the Institutional Trustee and the Holder of a
      Majority in liquidation amount of the Common Securities without the consent
      of
      the Holders of the Capital Securities to:

     

    (i) cure
      any
      ambiguity;

     

    (ii) correct
      or supplement any provision in this Declaration that may be defective or
      inconsistent with any other provision of this Declaration;

     

    (iii) add
      to
      the covenants, restrictions or obligations of the Sponsor; or 

     

    (iv) modify,
      eliminate or add to any provision of this Declaration to such extent as may
      be
      necessary or desirable, including, without limitation, to ensure that the Trust
      will be classified for United States federal income tax purposes at all times
      as
      a grantor trust and will not be required to register as an Investment Company
      under the Investment Company Act (including without limitation to conform to
      any
      change in Rule 3a-5, Rule 3a-7 or any other applicable rule under the Investment
      Company Act or written change

    
      
        
        

      

      
        -48-

        
          

        

      

      
        
        
 in
        interpretation or application thereof by any legislative body, court, government
        agency or regulatory authority) which amendment does not have a material
        adverse
        effect on the right, preferences or privileges of the Holders of
        Securities;

    

     

    provided,
      however,
      that no
      such modification, elimination or addition referred to in clauses (i),
      (ii), (iii) or (iv) shall adversely affect the powers, preferences or rights
      of
      Holders of Capital Securities.

     

    Section
      11.2.  Meetings
      of the Holders of the Securities; Action by Written Consent.
      

     

    (a) Meetings
      of the Holders of any class of Securities may be called at any time by the
      Administrators (or as provided in the terms of the Securities) to consider
      and
      act on any matter on which Holders of such class of Securities are entitled
      to
      act under the terms of this Declaration, the terms of the Securities or the
      rules of any stock exchange on which the Capital Securities are listed or
      admitted for trading, if any. The Administrators shall call a meeting of the
      Holders of such class if directed to do so by the Holders of not less than
      10%
      in liquidation amount of such class of Securities. Such direction shall be
      given
      by delivering to the Administrators one or more notices in a writing stating
      that the signing Holders of the Securities wish to call a meeting and indicating
      the general or specific purpose for which the meeting is to be called. Any
      Holders of the Securities calling a meeting shall specify in writing the
      Certificates held by the Holders of the Securities exercising the right to
      call
      a meeting and only those Securities represented by such Certificates shall
      be
      counted for purposes of determining whether the required percentage set forth
      in
      the second sentence of this paragraph has been met.

     

    (b) Except
      to
      the extent otherwise provided in the terms of the Securities, the following
      provisions shall apply to meetings of Holders of the Securities:

     

    (i) notice
      of
      any such meeting shall be given to all the Holders of the Securities having
      a
      right to vote thereat at least 7 days and not more than 60 days before the
      date
      of such meeting. Whenever a vote, consent or approval of the Holders of the
      Securities is permitted or required under this Declaration or the rules of
      any
      stock exchange on which the Capital Securities are listed or admitted for
      trading, if any, such vote, consent or approval may be given at a meeting of
      the
      Holders of the Securities. Any action that may be taken at a meeting of the
      Holders of the Securities may be taken without a meeting if a consent in writing
      setting forth the action so taken is signed by the Holders of the Securities
      owning not less than the minimum liquidation amount of Securities that would
      be
      necessary to authorize or take such action at a meeting at which all Holders
      of
      the Securities having a right to vote thereon were present and voting. Prompt
      notice of the taking of action without a meeting shall be given to the Holders
      of the Securities entitled to vote who have not consented in writing. The
      Administrators may specify that any written ballot submitted to the Holders
      of
      the Securities for the purpose of taking any action without a meeting shall
      be
      returned to the Trust within the time specified by the
      Administrators;

     

    
      
        
        

      

      
        -49-

        
          

        

      

      
        
        

      

    

    (ii) each
      Holder of a Security may authorize any Person to act for it by proxy on all
      matters in which a Holder of Securities is entitled to participate, including
      waiving notice of any meeting, or voting or participating at a meeting. No
      proxy
      shall be valid after the expiration of 11 months from the date thereof unless
      otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
      of the Holder of the Securities executing it. Except as otherwise provided
      herein, all matters relating to the giving, voting or validity of proxies shall
      be governed by the General Corporation Law of the State of Delaware relating
      to
      proxies, and judicial interpretations thereunder, as if the Trust were a
      Delaware corporation and the Holders of the Securities were stockholders of
      a
      Delaware corporation; each meeting of the Holders of the Securities shall be
      conducted by the Administrators or by such other Person that the Administrators
      may designate; and

     

    (iii) unless
      the Statutory Trust Act, this Declaration, the terms of the Securities, the
      Trust Indenture Act or the listing rules of any stock exchange on which the
      Capital Securities are then listed for trading, if any, otherwise provides,
      the
      Administrators, in their sole discretion, shall establish all other provisions
      relating to meetings of Holders of Securities, including notice of the time,
      place or purpose of any meeting at which any matter is to be voted on by any
      Holders of the Securities, waiver of any such notice, action by consent without
      a meeting, the establishment of a record date, quorum requirements, voting
      in
      person or by proxy or any other matter with respect to the exercise of any
      such
      right to vote; provided,
      however,
      that
      each meeting shall be conducted in the United States (as that term is defined
      in
      Treasury Regulations section 301.7701-7).

     

    ARTICLE
      XII

     

    REPRESENTATIONS
      OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE

     

    Section
      12.1.  Representations
      and Warranties of Institutional Trustee.
      The
      Trustee that acts as initial Institutional Trustee represents and warrants
      to
      the Trust and to the Sponsor at the date of this Declaration, and each Successor
      Institutional Trustee represents and warrants to the Trust and the Sponsor
      at
      the time of the Successor Institutional Trustee’s acceptance of its appointment
      as Institutional Trustee, that:

     

    (a) the
      Institutional Trustee is a banking corporation or national association with
      trust powers, duly organized, validly existing and in good standing under the
      laws of the State of Delaware or the United States of America, respectively,
      with trust power and authority to execute and deliver, and to carry out and
      perform its obligations under the terms of, this Declaration;

     

    (b) the
      Institutional Trustee has a combined capital and surplus of at least fifty
      million U.S. dollars ($50,000,000);

     

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

    (c) the
      Institutional Trustee is not an Affiliate of the Sponsor, nor does the
      Institutional Trustee offer or provide credit or credit enhancement to the
      Trust;

     

    (d) the
      execution, delivery and performance by the Institutional Trustee of this
      Declaration has been duly authorized by all necessary action on the part of
      the
      Institutional Trustee, and this Declaration has been duly executed and delivered
      by the Institutional Trustee, and under Delaware law (excluding any securities
      laws) constitutes a legal, valid and binding obligation of the Institutional
      Trustee, enforceable against it in accordance with its terms, subject to
      applicable bankruptcy, reorganization, moratorium, insolvency and other similar
      laws affecting creditors’ rights generally and to general principles of equity
      and the discretion of the court (regardless of whether considered in a
      proceeding in equity or at law);

     

    (e) the
      execution, delivery and performance of this Declaration by the Institutional
      Trustee does not conflict with or constitute a breach of the charter or by-laws
      of the Institutional Trustee; and

     

    (f) no
      consent, approval or authorization of, or registration with or notice to, any
      state or federal banking authority governing the trust powers of the
      Institutional Trustee is required for the execution, delivery or performance
      by
      the Institutional Trustee of this Declaration.

     

    Section
      12.2.  Representations
      and Warranties of Delaware Trustee.
      The
      Trustee that acts as initial Delaware Trustee represents and warrants to the
      Trust and to the Sponsor at the date of this Declaration, and each Successor
      Delaware Trustee represents and warrants to the Trust and the Sponsor at the
      time of the Successor Delaware Trustee’s acceptance of its appointment as
      Delaware Trustee that:

     

    (a) if
      it is
      not a natural person, the Delaware Trustee is duly organized, validly existing
      and in good standing under the laws of the State of Delaware;

     

    (b) if
      it is
      not a natural person, the execution, delivery and performance by the Delaware
      Trustee of this Declaration has been duly authorized by all necessary corporate
      action on the part of the Delaware Trustee. This Declaration has been duly
      executed and delivered by the Delaware Trustee, and under Delaware law
      (excluding any securities laws) constitutes a legal, valid and binding
      obligation of the Delaware Trustee, enforceable against it in accordance with
      its terms, subject to applicable bankruptcy, reorganization, moratorium,
      insolvency and other similar laws affecting creditors’ rights generally and to
      general principles of equity and the discretion of the court (regardless of
      whether considered in a proceeding in equity or at law);

     

    (c) if
      it is
      not a natural person, the execution, delivery and performance of this
      Declaration by the Delaware Trustee does not conflict with or constitute a
      breach of the charter or by-laws of the Delaware Trustee;

     

    (d) it
      has
      trust power and authority to execute and deliver, and to carry out and perform
      its obligations under the terms of, this Declaration;

     

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

    (e) no
      consent, approval or authorization of, or registration with or notice to, any
      state or federal banking authority governing the trust powers of the Delaware
      Trustee is required for the execution, delivery or performance by the Delaware
      Trustee of this Declaration; and

     

    (f) the
      Delaware Trustee is a natural person who is a resident of the State of Delaware
      or, if not a natural person, it is an entity which has its principal place
      of
      business in the State of Delaware and, in either case, a Person that satisfies
      for the Trust the requirements of Section 3807 of the Statutory Trust
      Act.

     

    ARTICLE
      XIII

     

    MISCELLANEOUS

     

    Section
      13.1.  Notices.
      All
      notices provided for in this Declaration shall be in writing, duly signed by
      the
      party giving such notice, and shall be delivered, telecopied (which telecopy
      shall be followed by notice delivered or mailed by first class mail) or mailed
      by first class mail, as follows:

     

    (a) if
      given
      to the Trust, in care of the Administrators at the Trust’s mailing address set
      forth below (or such other address as the Trust may give notice of to the
      Holders of the Securities):

     

    HNC
      Statutory Trust III 

    483
      Main
      Street

    Harleysville,
      Pennsylvania 19438 

    Attention:
      George S. Rapp 

    Telecopy:
      (215) 256-1931

    Telephone:
      (215) 513-2307

    

    (b) if
      given
      to the Delaware Trustee, at the mailing address set forth below (or such other
      address as the Delaware Trustee may give notice of to the Holders of the
      Securities):

     

    Wilmington
      Trust Company

    Rodney
      Square North

    1100
      North Market Street

    Wilmington,
      Delaware 19890-0001

    Attention:
      Corporate Capital Markets

    Telecopy:
      (302) 636-4140

    Telephone:
      (302) 651-1000

    

    (c) if
      given
      to the Institutional Trustee, at the Institutional Trustee’s mailing address set
      forth below (or such other address as the Institutional Trustee may give notice
      of to the Holders of the Securities):

     

    Wilmington
      Trust Company

    
      
        
        

      

      
        -52-

        
          

        

      

      
        
        

      

    

    Rodney
      Square North

    1100
      North Market Street

    Wilmington,
      Delaware 19890-0001

    Attention:
      Corporate Capital Markets

    Telecopy:
      (302) 636-4140

    Telephone:
      (302) 651-1000

    

    (d) if
      given
      to the Holder of the Common Securities, at the mailing address of the Sponsor
      set forth below (or such other address as the Holder of the Common Securities
      may give notice of to the Trust):

     

    Harleysville
      National Corporation 

    483
      Main
      Street

    Harleysville,
      Pennsylvania 19438 

    Attention:
      George S. Rapp 

    Telecopy:
      (215) 256-1931

    Telephone:
      (215) 513-2307

    

    (e) if
      given
      to any other Holder, at the address set forth on the books and records of the
      Trust.

     

    All
      such
      notices shall be deemed to have been given when received in person, telecopied
      with receipt confirmed, or mailed by first class mail, postage prepaid, except
      that if a notice or other document is refused delivery or cannot be delivered
      because of a changed address of which no notice was given, such notice or other
      document shall be deemed to have been delivered on the date of such refusal
      or
      inability to deliver.

     

    Section
      13.2.  Governing
      Law.
      This
      Declaration and the rights and obligations of the parties hereunder shall be
      governed by and interpreted in accordance with the law of the State of Delaware
      and all rights, obligations and remedies shall be governed by such laws without
      regard to the principles of conflict of laws of the State of Delaware or any
      other jurisdiction that would call for the application of the law of any
      jurisdiction other than the State of Delaware.

     

    Section
      13.3.  Submission
      to Jurisdiction.
      

     

    (a) Each
      of
      the parties hereto agrees that any suit, action or proceeding arising out of
      or
      based upon this Declaration, or the transactions contemplated hereby, may be
      instituted in any of the courts of the State of New York and the United States
      District Courts, in each case located in the Borough of Manhattan, City and
      State of New York, and further agrees to submit to the jurisdiction of any
      competent court in the place of its corporate domicile in respect of actions
      brought against it as a defendant. In addition, each such party irrevocably
      waives, to the fullest extent permitted by law, any objection which it may
      now
      or hereafter have to the laying of the venue of such suit, action or proceeding
      brought in any such court and irrevocably waives any claim that any such suit,
      action or proceeding brought in any such court has been brought in an
      inconvenient forum and irrevocably waives any right to which it may be entitled
      on account of its place of corporate domicile. Each such party hereby
      irrevocably waives any and all right to 

     

    
      
        
        

      

      
        -53-

        
          

        

      

      
        
        
trial
        by
        jury in any legal proceeding arising out of or relating to this Declaration
        or
        the transactions contemplated hereby. Each such party agrees that final judgment
        in any proceedings brought in such a court shall be conclusive and binding
        upon
        it and may be enforced in any court to the jurisdiction of which it is subject
        by a suit upon such judgment.

    

     

    (b) Each
      of
      the Sponsor, the Trustees, the Administrators and the Holder of the Common
      Securities irrevocably consents to the service of process on it in any such
      suit, action or proceeding in any such court by the mailing thereof by
      registered or certified mail, postage prepaid, to it at its address given in
      or
      pursuant to Section 13.1 hereof.

     

    (c) To
      the
      extent permitted by law, nothing herein contained shall preclude any party
      from
      effecting service of process in any lawful manner or from bringing any suit,
      action or proceeding in respect of this Declaration in any other state, country
      or place.

     

    Section
      13.4.  Intention
      of the Parties.
      It is
      the intention of the parties hereto that the Trust be classified for United
      States federal income tax purposes as a grantor trust. The provisions of this
      Declaration shall be interpreted to further this intention of the
      parties.

     

    Section
      13.5.  Headings.
      Headings contained in this Declaration are inserted for convenience of reference
      only and do not affect the interpretation of this Declaration or any provision
      hereof.

     

    Section
      13.6.  Successors
      and Assigns.
      Whenever in this Declaration any of the parties hereto is named or referred
      to,
      the successors and assigns of such party shall be deemed to be included, and
      all
      covenants and agreements in this Declaration by the Sponsor and the Trustees
      shall bind and inure to the benefit of their respective successors and assigns,
      whether or not so expressed.

     

    Section
      13.7.  Partial
      Enforceability.
      If any
      provision of this Declaration, or the application of such provision to any
      Person or circumstance, shall be held invalid, the remainder of this
      Declaration, or the application of such provision to persons or circumstances
      other than those to which it is held invalid, shall not be affected
      thereby.

     

    Section
      13.8.  Counterparts.
      This
      Declaration may contain more than one counterpart of the signature page and
      this
      Declaration may be executed by the affixing of the signature of each of the
      Trustees and Administrators 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 all of the signers had signed a single
      signature page.

    
      
        
        

      

      
        -54-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned have caused this Declaration to be duly
      executed as of the day and year first above written.

     

    WILMINGTON
      TRUST COMPANY, 

    as
      Delaware Trustee

     

    By:
      /s/
      Geoffrey J. Lewis

    Name:
      Geoffrey J. Lewis

    Title:
      Financial Services Officer

     

    WILMINGTON
      TRUST COMPANY,

    as
      Institutional Trustee

     

    By:
      /s/
      Geoffrey J. Lewis   

    Name:
      Geoffrey J. Lewis

    Title:
      Financial Services Officer

     

    HARLEYSVILLE
      NATIONAL CORPORATION 

    as
      Sponsor

     

    By:
      /s/
      George S. Rapp   

    Name:
      George S. Rapp 

    Title:
      Chief Financial Officer 

     

    By:  /s/
      George S. Rapp 

    George
      S.
      Rapp 

    
      	 	 	
              Administrator

            

    

    

    By:  /s/
      Michael B. High 

    
      	 	
            	 Michael
              B. High

    

    
      	 	 	
              Administrator

            

    

    

     

    
      
        
        

      

      
        -55-

        
          

        

      

       

    

    
      ANNEX
        I

    

     

    TERMS
      OF

    FIXED/FLOATING
      RATE CAPITAL SECURITIES AND

    FIXED/FLOATING
      RATE COMMON SECURITIES

     

    Pursuant
      to Section 6.1 of the Amended and Restated Declaration of Trust, dated as of
      September 28, 2005 (as amended from time to time, the “Declaration”), the
      designation, rights, privileges, restrictions, preferences and other terms
      and
      provisions of the Capital Securities and the Common Securities are set out
      below
      (each capitalized term used but not defined herein has the meaning set forth
      in
      the Declaration): 

     

    1. Designation
      and Number.
      

     

    (a) Capital
      Securities. 25,000 Capital Securities of HNC Statutory Trust III (the “Trust”),
      with an aggregate stated liquidation amount with respect to the assets of the
      Trust of Twenty-Five Million Dollars ($25,000,000) and a stated liquidation
      amount with respect to the assets of the Trust of $1,000 per Capital Security,
      are hereby designated for the purposes of identification only as the
“Fixed/Floating Rate Capital Securities” (the
      “Capital Securities”). The Capital Security Certificates evidencing the Capital
      Securities shall be substantially in the form of Exhibit A-1 to the Declaration,
      with such changes and additions thereto or deletions therefrom as may be
      required by ordinary usage, custom or practice or to conform to the rules of
      any
      stock exchange on which the Capital Securities are listed, if any.

     

    (b) Common
      Securities. 774 Common Securities of the Trust (the “Common Securities”) will be
      evidenced by Common Security Certificates substantially in the form of Exhibit
      A-2 to the Declaration, with such changes and additions thereto or deletions
      therefrom as may be required by ordinary usage, custom or practice. In the
      absence of an Event of Default, the Common Securities will have an aggregate
      stated liquidation amount with respect to the assets of the Trust of Seven
      Hundred Seventy Four Thousand Dollars ($774,000) and a stated liquidation amount
      with respect to the assets of the Trust of $1,000 per Common
      Security.

     

    2. Distributions.
      (a)
      Distributions payable on each Security will be payable (i) at a fixed per annum
      rate of interest equal to 5.67% through the end of the Distribution Period
      (as
      defined herein) with respect to the Distribution Payment Date occurring in
      November 2010 (the “Fixed Period”) and (ii) at a variable per annum rate of
      interest which, with respect to any Distribution Period after the Fixed Period,
      will be equal to LIBOR, as determined on the LIBOR Determination Date for such
      Distribution Period, plus 1.40% (collectively, the “Coupon Rate”), such rate
      being the rate of interest payable on the Debentures to be held by the
      Institutional Trustee. Except as set forth below in respect of an Extension
      Period, Distributions in arrears for more than one Distribution Period will
      bear
      interest thereon compounded quarterly at the applicable Coupon Rate for each
      such Distribution Period (to the extent permitted by applicable law). The term
      “Distributions” as used herein includes cash distributions, any such compounded
      distributions and any Additional Interest payable on the Debentures unless
      otherwise stated. A Distribution is payable only to the extent that payments
      are
      made in respect of the Debentures held by the Institutional Trustee and to
      the
      extent the Institutional Trustee has funds available in 

     

    
      
        
        

      

      
        A-I-1

        
          

        

      

      
        
        
the
        Property Account therefor. The amount of Distributions payable for each
        Distribution Period will be computed on the basis of a 360-day year and the
        actual number of days elapsed in the relevant Distribution Period; provided,
        however,
        that
        upon the occurrence of a Special Event redemption pursuant to paragraph 4(a)
        below the amounts payable pursuant to this Declaration shall be calculated
        as
        set forth in the definition of Special Redemption Price.

    

     

    The
      term
“Distribution Period” means the period from and including each Distribution
      Payment Date or, in the case of the first Distribution Period, the original
      date
      of issuance of the Securities to, but excluding, the next succeeding
      Distribution Payment Date or, in the case of the last Distribution Period,
      the
      Redemption Date, Special Redemption Date or Maturity Date, as
      applicable.

     

    (b) LIBOR
      shall be determined by the Calculation Agent for each Distribution Period after
      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 Distribution 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.

     

    (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 

     

    
      
        
        

      

      
        A-I-2

        
          

        

      

      
        
        
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 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
      Sponsor and the Paying Agent of the applicable Coupon Rate in effect for the
      related Distribution Period. The Calculation Agent shall, upon the request
      of
      the Holder of any Securities, provide the Coupon 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 Sponsor and the Holders
      of the Securities. The Paying Agent shall be entitled to rely on information
      received from the Calculation Agent or the Sponsor as to the Coupon Rate. The
      Sponsor shall, from time to time, provide any necessary information to the
      Paying Agent relating to any original issue discount and interest on the
      Securities that is included in any payment and reportable for taxable income
      calculation purposes.

     

    (e) Distributions
      on the Securities will be cumulative, will accrue from the date of original
      issuance, and will be payable, subject to extension of Distribution Periods
      as
      described herein, quarterly in arrears on February 23, May 23, August 23 and
      November 23 of each year, commencing on November 23, 2005 (each, a “Distribution
      Payment Date”). The Debenture Issuer has the right under the Indenture to defer
      payments of interest on the Debentures by extending the interest payment period
      for up to 20 consecutive quarterly periods (each, an “Extension Period”) at any
      time and from time to time on the Debentures, subject to the conditions
      described below. During any Extension Period, interest will continue to accrue
      on the Debentures, and interest on such accrued interest (such accrued interest
      and interest thereon referred to herein as “Deferred Interest”) will accrue at
      an annual rate equal to the Coupon Rate in effect for each such Extension
      Period, compounded quarterly from the date such Deferred Interest would have
      been payable were it not for the Extension Period, to the extent permitted
      by
      law. No Extension Period may end on a date other than a Distribution Payment
      Date. At the end of any such Extension Period, the Debenture Issuer shall pay
      all Deferred Interest then accrued 

     

    
      
        
        

      

      
        A-I-3

        
          

        

      

      
        
        
and
        unpaid on the Debentures; provided,
        however,
        that no
        Extension Period may extend beyond the Maturity Date, Redemption Date or
        Special
        Redemption Date and provided,
        further,
        that,
        during any such Extension Period, the Debenture Issuer may not (i) declare
        or
        pay any dividends or distributions on, or redeem, purchase, acquire, or make
        a
        liquidation payment with respect to, any of the Debenture Issuer’s capital
        stock, (ii) make any payment due on or repay, repurchase or redeem any debt
        securities of the Debenture Issuer that rank pari
        passu in
        all
        respects with or junior in interest to the Debentures or (iii) make any payment
        under any guarantees of the Debenture Issuer that rank pari
        passu in
        all
        respects with or junior in interest to the Guarantee (other than (a)
        repurchases, redemptions or other acquisitions of shares of capital stock
        of the
        Debenture Issuer (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 Debenture Issuer (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
        Debenture Issuer’s capital stock (or any capital stock of a subsidiary of the
        Debenture Issuer) for any class or series of the Debenture Issuer’s capital
        stock or of any class or series of the Debenture Issuer’s indebtedness for any
        class or series of the Debenture Issuer’s capital stock, (c) the purchase of
        fractional interests in shares of the Debenture Issuer’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). Prior to the termination of any Extension
        Period, the Debenture Issuer 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. Upon the termination
        of any Extension Period and upon the payment of all Deferred Interest, the
        Debenture Issuer may commence a new Extension Period, subject to the foregoing
        requirements. 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, 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.
        If
        Distributions are deferred, the Distributions due shall be paid on the date
        that
        the related Extension Period terminates, or, if such date is not a Distribution
        Payment Date, on the immediately following Distribution Payment Date, to
        Holders
        of the Securities as they appear on the books and records of the Trust on
        the
        record date immediately preceding such date. Distributions on the Securities
        must be paid on the dates payable (after giving effect to any Extension Period)
        to the extent that the Trust has funds legally available for the payment
        of such
        distributions in the Property Account of the Trust. The Trust’s funds available
        for Distribution to the Holders of the Securities will be limited to payments
        received from the Debenture Issuer. The payment of Distributions out of moneys
        held by the Trust is guaranteed by the Guarantor pursuant to the
        Guarantee.

    

     

    
      
        
        

      

      
        A-I-4

        
          

        

      

      
        
        

      

    

    (f) Distributions
      on the Securities will be payable to the Holders thereof as they appear on
      the
      books and records of the Registrar on the relevant record dates. The relevant
      record dates shall be selected by the Administrators, which dates shall be
      15
      days before the relevant payment dates. Distributions payable on any Securities
      that are not punctually paid on any Distribution Payment Date, as a result
      of
      the Debenture Issuer having failed to make a payment under the Debentures,
      as
      the case may be, when due (taking into account any Extension Period), will
      cease
      to be payable to the Person in whose name such Securities are registered on
      the
      relevant record date, and such defaulted Distribution will instead be payable
      to
      the Person in whose name such Securities are registered on the special record
      date or other specified date determined in accordance with the Indenture. If
      any
      Distribution Payment Date other than any date of redemption, falls on a day
      that
      is not a Business Day, then Distributions payable will be paid on, and such
      Distribution Payment Date will be moved to, the next succeeding Business Day,
      and additional Distributions will accrue for each day that such payment is
      delayed as a result thereof.

     

    (g) In
      the
      event that there is any money or other property held by or for the Trust that
      is
      not accounted for hereunder, such property shall be distributed pro rata (as
      defined herein) among the Holders of the Securities.

     

    3. Liquidation
      Distribution Upon Dissolution.
      In the
      event of the voluntary or involuntary liquidation, dissolution, winding-up
      or
      termination of the Trust (each, a “Liquidation”) other than in connection with a
      redemption of the Debentures, the Holders of the Securities will be entitled
      to
      receive out of the assets of the Trust available for distribution to Holders
      of
      the Securities, after satisfaction of liabilities to creditors of the Trust
      (to
      the extent not satisfied by the Debenture Issuer), distributions equal to the
      aggregate of the stated liquidation amount of $1,000 per Security plus accrued
      and unpaid Distributions thereon to the date of payment (such amount being
      the
“Liquidation Distribution”), unless in connection with such Liquidation, the
      Debentures in an aggregate stated principal amount equal to the aggregate stated
      liquidation amount of such Securities, with an interest rate equal to the Coupon
      Rate of, and bearing accrued and unpaid interest in an amount equal to the
      accrued and unpaid Distributions on, and having the same record date as, such
      Securities, after paying or making reasonable provision to pay all claims and
      obligations of the Trust in accordance with Section 3808(e) of the Statutory
      Trust Act, shall be distributed on a Pro Rata basis to the Holders of the
      Securities in exchange for such Securities.

     

    The
      Sponsor, as the Holder of all of the Common Securities, has the right at any
      time to dissolve the Trust (including without limitation upon the occurrence
      of
      a Tax Event, an Investment Company Event or a Capital Treatment Event), subject
      to the receipt by the Debenture Issuer 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
      and, after satisfaction of liabilities to creditors of the Trust, cause the
      Debentures to be distributed to the Holders of the Securities on a Pro Rata
      basis in accordance with the aggregate stated liquidation amount
      thereof.

     

    The
      Trust
      shall dissolve on the first to occur of (i) November 23, 2040, the expiration
      of
      the term of the Trust, (ii) a Bankruptcy Event with respect to the Sponsor,
      the
      Trust 

     

    
      
        
        

      

      
        A-I-5

        
          

        

      

      
        
        
or
        the
        Debenture Issuer, (iii) (other than in connection with a merger, consolidation
        or similar transaction not prohibited by the Indenture, this Declaration
        or the
        Guarantee, as the case may be) the filing of a certificate of dissolution
        of the
        Sponsor or upon the revocation of the charter of the Sponsor and the expiration
        of 90 days after the date of revocation without a reinstatement thereof,
        (iv)
        the distribution to the Holders of the Securities of the Debentures, upon
        exercise of the right of the Holder of all of the outstanding Common Securities
        to dissolve the Trust as described above, (v) the entry of a decree of a
        judicial dissolution of the Sponsor or the Trust, or (vi) when all of the
        Securities shall have been called for redemption and the amounts necessary
        for
        redemption thereof shall have been paid to the Holders in accordance with
        the
        terms of the Securities. As soon as practicable after the dissolution of
        the
        Trust and upon completion of the winding up of the Trust, the Trust shall
        terminate upon the filing of a certificate of cancellation with the Secretary
        of
        State of the State of Delaware.

    

     

    If
      a
      Liquidation of the Trust occurs as described in clause (i), (ii), (iii) or
      (v)
      in the immediately preceding paragraph, the Trust shall be liquidated by the
      Institutional Trustee of the Trust as expeditiously as such Trustee determines
      to be possible by distributing, after satisfaction of liabilities to creditors
      of the Trust as provided by applicable law, to the Holders of the Securities,
      the Debentures on a Pro Rata basis to the extent not satisfied by the Debenture
      Issuer, unless such distribution is determined by the Institutional Trustee
      not
      to be practical, in which event such Holders will be entitled to receive out
      of
      the assets of the Trust available for distribution to the Holders, after
      satisfaction of liabilities to creditors of the Trust to the extent not
      satisfied by the Debenture Issuer, an amount equal to the Liquidation
      Distribution. An early Liquidation of the Trust pursuant to clause (iv)
      of
      the immediately preceding paragraph shall occur if the Institutional Trustee
      determines that such Liquidation is possible by distributing, after satisfaction
      of liabilities to creditors of Trust, to the Holders of the Securities on a
      Pro
      Rata basis, the Debentures, and such distribution occurs.

     

    If,
      upon
      any such Liquidation, the Liquidation Distribution can be paid only in part
      because the Trust has insufficient assets available to pay in full the aggregate
      Liquidation Distribution, then the amounts payable directly by the Trust on
      such
      Capital Securities shall be paid to the Holders of the Securities on a Pro
      Rata
      basis, except that if an Event of Default has occurred and is continuing, the
      Capital Securities shall have a preference over the Common Securities with
      regard to such distributions.

     

    Upon
      any
      such Liquidation of the Trust involving a distribution of the Debentures, if
      at
      the time of such Liquidation, the Capital Securities were rated by at least
      one
      nationally-recognized statistical rating organization, the Debenture Issuer
      will
      use its reasonable best efforts to obtain from at least one such or other rating
      organization a rating for the Debentures.

     

    After
      the
      date for any distribution of the Debentures upon dissolution of the Trust,
      (i)
      the Securities of the Trust will be deemed to be no longer outstanding, (ii)
      any
      certificates representing the Capital Securities will be deemed to represent
      undivided beneficial interests in such of the Debentures as have an aggregate
      principal amount equal to the aggregate stated liquidation amount of, with
      an
      interest rate identical to the distribution rate of, and bearing accrued and
      unpaid interest equal to accrued and unpaid distributions on, the Securities
      until

     

    
      
        
        

      

      
        A-I-6

        
          

        

      

      
        
        
such
        certificates are presented to the Debenture Issuer or its agent for transfer
        or
        reissuance (and until such certificates are so surrendered, no payments of
        interest or principal shall be made to Holders of Securities in respect of
        any
        payments due and payable under the Debentures) and (iii) all rights of Holders
        of Securities under the Capital Securities or the Common Securities, as
        applicable, shall cease, except the right of such Holders to receive Debentures
        upon surrender of certificates representing such Securities.

    

     

    4. Redemption
      and Distribution.

     

    (a) The
      Debentures will mature on November 23, 2035. The Debentures may be redeemed
      by
      the Debenture Issuer, in whole or in part, on any February 23, May 23, August
      23
      and November 23 on or after November 23, 2010, at the Redemption Price, upon
      not
      less than 30 nor more than 60 days’ notice to Holders of such Debentures. In
      addition, upon the occurrence and continuation of a Tax Event, an Investment
      Company Event or a Capital Treatment Event, the Debentures may be redeemed
      by
      the Debenture Issuer 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, as the case may be (the “Special Redemption Date”), at the
      Special Redemption Price, upon not less than 30 nor more than 60 days’ notice to
      Holders of the Debentures so long as such Tax Event, Investment Company Event
      or
      Capital Treatment Event, as the case may be, is continuing. In each case, the
      right of the Debenture Issuer to redeem the Debentures is subject to the
      Debenture Issuer having received prior approval from the Federal Reserve, if
      then required under applicable capital guidelines or policies of the Federal
      Reserve.

     

    “Tax
      Event” means the receipt by the Debenture Issuer 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 Debenture
      Issuer or the Trust and whether or not subject to review or appeal, which
      amendment, clarification, change, Administrative Action or decision is enacted,
      promulgated or announced, in each case on or after the date of original issuance
      of the Debentures, there is more than an insubstantial risk that: (i) the Trust
      is, or will be within 90 days of the date of such opinion, subject to United
      States federal income tax with respect to income received or accrued on the
      Debentures; (ii) interest payable by the Debenture Issuer on the Debentures
      is
      not, or within 90 days of the date of such opinion, will not be, deductible
      by
      the Debenture Issuer, 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.

     

    
      
        
        

      

      
        A-I-7

        
          

        

      

      
        
        

      

    

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

     

    “Capital
      Treatment Event” means the receipt by the Debenture Issuer 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 Debentures, there is more than an insubstantial risk
      that the Debenture Issuer 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 Debenture Issuer; provided,
      however,
      that
      the distribution of the Debentures in connection with the Liquidation of the
      Trust by the Debenture Issuer 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.

     

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

     

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

     

    “Special
      Redemption Price” means, with respect to the redemption of any Debenture
      following a Special Event, an amount in cash equal to the percentage for the
      principal amount of the Debentures 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

              

      

       

      
        
          
          

        

        
          A-I-8

          
            

          

        

        
          
          

        

      

       

      
        	
                November
                  23, 2009

              	
                100.88

              
	
                November
                  23, 2010

              	
                100.00

              

      

    

     

    “Redemption
      Date” means the date fixed for the redemption of Capital Securities, which shall
      be any February 23, May 23, August 23 and November 23 on or after November
      23,
      2010.

     

    (b) Upon
      the
      repayment in full at maturity or redemption in whole or in part of the
      Debentures (other than following the distribution of the Debentures to the
      Holders of the Securities), the proceeds from such repayment or payment shall
      concurrently be applied to redeem Pro Rata at the applicable Redemption Price
      or
      Special Redemption Price, as the case may be, Securities having an aggregate
      liquidation amount equal to the aggregate principal amount of the Debentures
      so
      repaid or redeemed; provided,
      however,
      that
      holders of such Securities shall be given not less than 30 nor more than 60
      days’ notice of such redemption (other than at the scheduled maturity of the
      Debentures).

     

    (c) If
      fewer
      than all the outstanding Securities are to be so redeemed, the Common Securities
      and the Capital Securities will be redeemed Pro Rata and the Capital Securities
      to be redeemed will be as described in Section 4(e)(ii) below.

     

    (d) The
      Trust
      may not redeem fewer than all the outstanding Capital Securities unless all
      accrued and unpaid Distributions have been paid on all Capital Securities for
      all Distribution Periods terminating on or before the date of
      redemption.

     

    (e) Redemption
      or Distribution Procedures.

     

    (i) Notice
      of
      any redemption of, or notice of distribution of the Debentures in exchange
      for,
      the Securities (a “Redemption/Distribution Notice”) will be given by the Trust
      by mail to each Holder of Securities to be redeemed or exchanged not fewer
      than
      30 nor more than 60 days before the date fixed for redemption or exchange
      thereof which, in the case of a redemption, will be the date fixed for
      redemption of the Debentures. For purposes of the calculation of the date of
      redemption or exchange and the dates on which notices are given pursuant to
      this
      Section 4(e)(i), a Redemption/Distribution Notice shall be deemed to be given
      on
      the day such notice is first mailed by first-class mail, postage prepaid, to
      Holders of such Securities. Each Redemption/Distribution Notice shall be
      addressed to the Holders of such Securities at the address of each such Holder
      appearing on the books and records of the Registrar. No defect in the
      Redemption/Distribution Notice or in the mailing thereof with respect to any
      Holder shall affect the validity of the redemption or exchange proceedings
      with
      respect to any other Holder.

     

    
      
        
        

      

      
        A-I-9

        
          

        

      

      
        
        

      

    

    (ii) In
      the
      event that fewer than all the outstanding Securities are to be redeemed, the
      Securities to be redeemed shall be redeemed Pro Rata from each Holder of Capital
      Securities.

     

    (iii) If
      the
      Securities are to be redeemed and the Trust gives a Redemption/Distribution
      Notice, which notice may only be issued if the Debentures are redeemed as set
      out in this Section 4 (which notice will be irrevocable), then, provided,
      that
      the Institutional Trustee has a sufficient amount of cash in connection with
      the
      related redemption or maturity of the Debentures, the Institutional Trustee
      will
      pay the relevant redemption price to the Holders of such Securities by check
      mailed to the address of each such Holder appearing on the books and records
      of
      the Trust on the redemption date. If a Redemption/Distribution Notice shall
      have
      been given and funds deposited as required, then immediately prior to the close
      of business on the date of such deposit, Distributions will cease to accrue
      on
      the Securities so called for redemption and all rights of Holders of such
      Securities so called for redemption will cease, except the right of the Holders
      of such Securities to receive the applicable redemption price specified in
      Section 4(a), but without interest on such redemption price. If any date fixed
      for redemption of Securities is not a Business Day, then payment of any such
      redemption price payable on such date will be made on the next succeeding day
      that is a Business Day (and without any interest or other payment in respect
      of
      any such delay) except that, if such Business Day falls in the next calendar
      year, such payment will be made on the immediately preceding Business Day,
      in
      each case with the same force and effect as if made on such date fixed for
      redemption. If payment of the redemption price in respect of any Securities
      is
      improperly withheld or refused and not paid either by the Trust or by the
      Debenture Issuer as guarantor pursuant to the Guarantee, Distributions on such
      Securities will continue to accrue at the then applicable rate from the original
      redemption date to the actual date of payment, in which case the actual payment
      date will be considered the date fixed for redemption for purposes of
      calculating the redemption price. In the event of any redemption of the Capital
      Securities issued by the Trust in part, the Trust shall not be required to
      (i)
      issue, register the transfer of or exchange any Security during a period
      beginning at the opening of business 15 days before any selection for redemption
      of the Capital Securities and ending at the close of business on the earliest
      date on which the relevant notice of redemption is deemed to have been given
      to
      all Holders of the Capital Securities to be so redeemed or (ii) register the
      transfer of or exchange any Capital Securities so selected for redemption,
      in
      whole or in part, except for the unredeemed portion of any Capital Securities
      being redeemed in part.

     

    (iv) Redemption/Distribution
      Notices shall be sent by the Administrators on behalf of the Trust (A) in
      respect of the Capital Securities, to the Holders thereof, and (B) in respect
      of
      the Common Securities, to the Holder thereof.

     

    (v) Subject
      to the foregoing and applicable law (including, without limitation, United
      States federal securities laws), and provided,
      that
      the acquiror is not the Holder of the Common Securities or the obligor under
      the
      Indenture, the Sponsor or any of its subsidiaries may at any time and from
      time
      to time purchase outstanding Capital Securities by tender, in the open market
      or
      by private agreement.

     

    
      
        
        

      

      
        A-I-10

        
          

        

      

      
        
        

      

    

    5. Voting
      Rights - Capital Securities.
      (a)
      Except as provided under Sections 5(b) and 7 and as otherwise required by law
      and the Declaration, the Holders of the Capital Securities will have no voting
      rights. The Administrators are required to call a meeting of the Holders of
      the
      Capital Securities if directed to do so by Holders of not less than 10% in
      liquidation amount of the Capital Securities.

     

    (b) Subject
      to the requirements of obtaining a tax opinion by the Institutional Trustee
      in
      certain circumstances set forth in the last sentence of this paragraph, the
      Holders of a Majority in liquidation amount of the Capital Securities, voting
      separately as a class, have the right to direct the time, method, and place
      of
      conducting any proceeding for any remedy available to the Institutional Trustee,
      or exercising any trust or power conferred upon the Institutional Trustee under
      the Declaration, including the right to direct the Institutional Trustee, as
      holder of the Debentures, to (i) exercise the remedies available under the
      Indenture as the holder of the Debentures, (ii) waive any past default that
      is
      waivable under the Indenture, (iii) exercise any right to rescind or
      annul
      a declaration that the principal of all the Debentures shall be due and payable
      or (iv) consent on behalf of all the Holders of the Capital Securities to any
      amendment, modification or termination of the Indenture or the Debentures where
      such consent shall be required; provided,
      however,
      that,
      where a consent or action under the Indenture would require the consent or
      act
      of the holders of greater than a simple majority in principal amount of
      Debentures (a “Super Majority”) affected thereby, the Institutional Trustee may
      only give such consent or take such action at the written direction of the
      Holders of not less than the proportion in liquidation amount of the Capital
      Securities outstanding which the relevant Super Majority represents of the
      aggregate principal amount of the Debentures outstanding. If the Institutional
      Trustee fails to enforce its rights under the Debentures after the Holders
      of a
      Majority or Super Majority, as the case may be, in liquidation amount of such
      Capital Securities have so directed the Institutional Trustee, to the fullest
      extent permitted by law, a Holder of the Capital Securities may institute a
      legal proceeding directly against the Debenture Issuer to enforce the
      Institutional Trustee’s rights under the Debentures without first instituting
      any legal proceeding against the Institutional Trustee or any other person
      or
      entity. Notwithstanding the foregoing, if an Event of Default has occurred
      and
      is continuing and such event is attributable to the failure of the Debenture
      Issuer to pay interest or premium, if any, on or principal of the Debentures
      on
      the date the interest, premium, if any, or principal is payable (or in the
      case
      of redemption, the redemption date), then a Holder of record of the Capital
      Securities may directly institute a proceeding for enforcement of payment,
      on or
      after the respective due dates specified in the Debentures, to such Holder
      directly of the principal of, or premium, if any, or interest on the Debentures
      having an aggregate principal amount equal to the aggregate liquidation amount
      of the Capital Securities of such Holder. The Institutional Trustee shall notify
      all Holders of the Capital Securities of any default actually known to the
      Institutional Trustee with respect to the Debentures unless (x) such default
      has
      been cured prior to the giving of such notice or (y) the Institutional Trustee
      determines in good faith that the withholding of such notice is in the interest
      of the Holders of such Capital Securities, except where the default relates
      to
      the payment of principal of or interest on any of the Debentures. Such notice
      shall state that such Indenture Event of Default also constitutes an Event
      of
      Default hereunder. Except with respect to directing the time, method and place
      of conducting a proceeding for a remedy, the Institutional Trustee shall not
      take any of the actions described in clause (i), (ii) or (iii) above unless
      the
      Institutional 

     

    
      
        
        

      

      
        A-I-11

        
          

        

      

      
        
        
Trustee
        has obtained an opinion of tax counsel to the effect that, as a result of
        such
        action, the Trust will not be classified as other than a grantor trust for
        United States federal income tax purposes.

    

     

    In
      the
      event the consent of the Institutional Trustee, as the holder of the Debentures
      is required under the Indenture with respect to any amendment, modification
      or
      termination of the Indenture, the Institutional Trustee shall request the
      written direction of the Holders of the Securities with respect to such
      amendment, modification or termination and shall vote with respect to such
      amendment, modification or termination as directed by a Majority in liquidation
      amount of the Securities voting together as a single class; provided,
      however,
      that
      where a consent under the Indenture would require the consent of a Super
      Majority, the Institutional Trustee may only give such consent at the written
      direction of the Holders of not less than the proportion in liquidation amount
      of such Securities outstanding which the relevant Super Majority represents
      of
      the aggregate principal amount of the Debentures outstanding. The Institutional
      Trustee shall not take any such action in accordance with the written directions
      of the Holders of the Securities unless the Institutional Trustee has obtained
      an opinion of tax counsel to the effect that, as a result of such action, the
      Trust will not be classified as other than a grantor trust for United States
      federal income tax purposes.

     

    A
      waiver
      of an Indenture Event of Default will constitute a waiver of the corresponding
      Event of Default hereunder. Any required approval or direction of Holders of
      the
      Capital Securities may be given at a separate meeting of Holders of the Capital
      Securities convened for such purpose, at a meeting of all of the Holders of
      the
      Securities in the Trust or pursuant to written consent. The Institutional
      Trustee will cause a notice of any meeting at which Holders of the Capital
      Securities are entitled to vote, or of any matter upon which action by written
      consent of such Holders is to be taken, to be mailed to each Holder of record
      of
      the Capital Securities. Each such notice will include a statement setting forth
      the following information (i) the date of such meeting or the date by which
      such
      action is to be taken, (ii) a description of any resolution proposed for
      adoption at such meeting on which such Holders are entitled to vote or of such
      matter upon which written consent is sought and (iii) instructions for the
      delivery of proxies or consents. No vote or consent of the Holders of the
      Capital Securities will be required for the Trust to redeem and cancel Capital
      Securities or to distribute the Debentures in accordance with the Declaration
      and the terms of the Securities.

     

    Notwithstanding
      that Holders of the Capital Securities are entitled to vote or consent under
      any
      of the circumstances described above, any of the Capital Securities that are
      owned by the Sponsor or any Affiliate of the Sponsor shall not entitle the
      Holder thereof to vote or consent and shall, for purposes of such vote or
      consent, be treated as if such Capital Securities were not
      outstanding.

     

    In
      no
      event will Holders of the Capital Securities have the right to vote to appoint,
      remove or replace the Administrators, which voting rights are vested exclusively
      in the Sponsor as the Holder of all of the Common Securities of the Trust.
      Under
      certain circumstances as more fully described in the Declaration, Holders of
      Capital Securities have the right to vote to appoint, remove or replace the
      Institutional Trustee and the Delaware Trustee.

     

    
      
        
        

      

      
        A-I-12

        
          

        

      

      
        
        

      

    

    6. Voting
      Rights - Common Securities.
      (a)
      Except as provided under Sections 6(b), 6(c) and 7 and as otherwise required
      by
      law and the Declaration, the Common Securities will have no voting
      rights.

     

    (b) The
      Holders of the Common Securities are entitled, in accordance with Article IV
      of
      the Declaration, to vote to appoint, remove or replace any
      Administrators.

     

    (c) Subject
      to Section 6.7 of the Declaration and only after each Event of Default (if
      any)
      with respect to the Capital Securities has been cured, waived or otherwise
      eliminated and subject to the requirements of the second to last sentence of
      this paragraph, the Holders of a Majority in liquidation amount of the Common
      Securities, voting separately as a class, may direct the time, method, and
      place
      of conducting any proceeding for any remedy available to the Institutional
      Trustee, or exercising any trust or power conferred upon the Institutional
      Trustee under the Declaration, including (i) directing the time, method, place
      of conducting any proceeding for any remedy available to the Debenture Trustee,
      or exercising any trust or power conferred on the Debenture Trustee with respect
      to the Debentures, (ii) waiving any past default and its consequences that
      are
      waivable under the Indenture, or (iii) exercising any right to rescind or annul
      a declaration that the principal of all the Debentures shall be due and payable,
      provided,
      however,
      that,
      where a consent or action under the Indenture would require a Super Majority,
      the Institutional Trustee may only give such consent or take such action at
      the
      written direction of the Holders of not less than the proportion in liquidation
      amount of the Common Securities which the relevant Super Majority represents
      of
      the aggregate principal amount of the Debentures outstanding. Notwithstanding
      this Section 6(c), the Institutional Trustee shall not revoke any action
      previously authorized or approved by a vote or consent of the Holders of the
      Capital Securities. Other than with respect to directing the time, method and
      place of conducting any proceeding for any remedy available to the Institutional
      Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
      shall not take any action described in clause (i), (ii) or (iii) above, unless
      the Institutional Trustee has obtained an opinion of tax counsel to the effect
      that for the purposes of United States federal income tax the Trust will not
      be
      classified as other than a grantor trust on account of such action. If the
      Institutional Trustee fails to enforce its rights under the Declaration, to
      the
      fullest extent permitted by law any Holder of the Common Securities may
      institute a legal proceeding directly against any Person to enforce the
      Institutional Trustee’s rights under the Declaration, without first instituting
      a legal proceeding against the Institutional Trustee or any other
      Person.

     

    Any
      approval or direction of Holders of the Common Securities may be given at a
      separate meeting of Holders of the Common Securities convened for such purpose,
      at a meeting of all of the Holders of the Securities in the Trust or pursuant
      to
      written consent. The Administrators will cause a notice of any meeting at which
      Holders of the Common Securities are entitled to vote, or of any matter upon
      which action by written consent of such Holders is to be taken, to be mailed
      to
      each Holder of the Common Securities. Each such notice will include a statement
      setting forth (i) the date of such meeting or the date by which such action
      is
      to be taken, (ii) a description of any resolution proposed for adoption at
      such
      meeting on which such Holders are entitled to vote or of such matter upon which
      written consent is sought and (iii) instructions for the delivery of proxies
      or
      consents.

     

    
      
        
        

      

      
        A-I-13

        
          

        

      

      
        
        

      

    

    No
      vote
      or consent of the Holders of the Common Securities will be required for the
      Trust to redeem and cancel Common Securities or to distribute the Debentures
      in
      accordance with the Declaration and the terms of the Securities.

     

    7. Amendments
      to Declaration and Indenture.
      (a) In
      addition to any requirements under Section 11.1 of the Declaration, if any
      proposed amendment to the Declaration provides for, or the Trustees otherwise
      propose to effect, (i) any action that would adversely affect the powers,
      preferences or special rights of the Securities, whether by way of amendment
      to
      the Declaration or otherwise, or (ii) the Liquidation of the Trust, other than
      as described in Section 7.1 of the Declaration, then the Holders of outstanding
      Securities, voting together as a single class, will be entitled to vote on
      such
      amendment or proposal and such amendment or proposal shall not be effective
      except with the approval of the Holders of not less than a Majority in
      liquidation amount of the Securities affected thereby; provided,
      however,
      if any
      amendment or proposal referred to in clause (i) above would adversely affect
      only the Capital Securities or only the Common Securities, then only the
      affected class will be entitled to vote on such amendment or proposal and such
      amendment or proposal shall not be effective except with the approval of a
      Majority in liquidation amount of such class of Securities.

     

    (b) In
      the
      event the consent of the Institutional Trustee as the holder of the Debentures
      is required under the Indenture with respect to any amendment, modification
      or
      termination of the Indenture or the Debentures, the Institutional Trustee shall
      request the written direction of the Holders of the Securities with respect
      to
      such amendment, modification or termination and shall vote with respect to
      such
      amendment, modification, or termination as directed by a Majority in liquidation
      amount of the Securities voting together as a single class; provided,
      however,
      that
      where a consent under the Indenture would require a Super Majority, the
      Institutional Trustee may only give such consent at the written direction of
      the
      Holders of not less than the proportion in liquidation amount of the Securities
      which the relevant Super Majority represents of the aggregate principal amount
      of the Debentures outstanding.

     

    (c) Notwithstanding
      the foregoing, no amendment or modification may be made to the Declaration
      if
      such amendment or modification would (i) cause the Trust to be classified for
      purposes of United States federal income taxation as other than a grantor trust,
      (ii) reduce or otherwise adversely affect the powers of the Institutional
      Trustee or (iii) cause the Trust to be deemed an Investment Company which is
      required to be registered under the Investment Company Act.

     

    (d) Notwithstanding
      any provision of the Declaration, the right of any Holder of the Capital
      Securities to receive payment of distributions and other payments upon
      redemption or otherwise, on or after their respective due dates, or to institute
      a suit for the enforcement of any such payment on or after such respective
      dates, shall not be impaired or affected without the consent of such Holder.
      For
      the protection and enforcement of the foregoing provision, each and every Holder
      of the Capital Securities shall be entitled to such relief as can be given
      either at law or equity.

     

    8. Pro
      Rata.
      A
      reference in these terms of the Securities to any payment, distribution or
      treatment as being “Pro Rata” shall mean pro rata to each Holder of the
      Securities 

     

    
      
        
        

      

      
        A-I-14

        
          

        

      

      
        
        
according
        to the aggregate liquidation amount of the Securities held by the relevant
        Holder in relation to the aggregate liquidation amount of all Securities
        outstanding unless, in relation to a payment, an Event of Default has occurred
        and is continuing, in which case any funds available to make such payment
        shall
        be paid first to each Holder of the Capital Securities Pro Rata according
        to the
        aggregate liquidation amount of the Capital Securities held by the relevant
        Holder relative to the aggregate liquidation amount of all Capital Securities
        outstanding, and only after satisfaction of all amounts owed to the Holders
        of
        the Capital Securities, to each Holder of the Common Securities Pro Rata
        according to the aggregate liquidation amount of the Common Securities held
        by
        the relevant Holder relative to the aggregate liquidation amount of all Common
        Securities outstanding.

    

     

    9. Ranking.
      The
      Capital Securities rank pari
      passu
      with,
      and payment thereon shall be made Pro Rata with, the Common Securities except
      that, where an Event of Default has occurred and is continuing, the rights
      of
      Holders of the Common Securities to receive payment of Distributions and
      payments upon liquidation, redemption and otherwise are subordinated to the
      rights of the Holders of the Capital Securities with the result that no payment
      of any Distribution on, or redemption price of, any Common Security, and no
      other payment on account of redemption, liquidation or other acquisition of
      Common Securities, shall be made unless payment in full in cash of all
      accumulated and unpaid Distributions on all outstanding Capital Securities
      for
      all distribution periods terminating on or prior thereto, or in the case of
      payment of the redemption price the full amount of such redemption price on
      all
      outstanding Capital Securities then called for redemption, shall have been
      made
      or provided for, and all funds immediately available to the Institutional
      Trustee shall first be applied to the payment in full in cash of all
      Distributions on, or the redemption price of, the Capital Securities then due
      and payable.

     

    10. Acceptance
      of Guarantee and Indenture.
      Each
      Holder of the Capital Securities and the Common Securities, by the acceptance
      of
      such Securities, agrees to the provisions of the Guarantee, including the
      subordination provisions therein and to the provisions of the
      Indenture.

     

    11. No
      Preemptive Rights.
      The
      Holders of the Securities shall have no, and the issuance of the Securities
      is
      not subject to, preemptive or similar rights to subscribe for any additional
      securities.

     

    12. Miscellaneous.
      These
      terms constitute a part of the Declaration. The Sponsor will provide a copy
      of
      the Declaration, the Guarantee, and the Indenture to a Holder without charge
      on
      written request to the Sponsor at its principal place of business.

     

    

     

    
      
        
          

          
            	
                     

                  	
                    A-I-15

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A-1

     

    FORM
      OF CAPITAL SECURITY CERTIFICATE

     

    [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 DEBENTURE ISSUER OR THE
      TRUST, (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 SUCH AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT
      WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
      VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
      FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
      DEBENTURE ISSUER’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
      TRANSFER PURSUANT TO CLAUSES (C) OR (D) ABOVE TO REQUIRE THE DELIVERY OF AN
      OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
      EACH
      OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A
      COPY
      OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUER OR THE TRUST. 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 AND HOLDING 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 AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT THE
      TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

     

    THIS
      SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
      LIQUIDATION 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 LIQUIDATION
      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.

    
 

     

    
      
        
          

          
            	
                     

                  	
                    A-1-2

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    Certificate
      Number P-   Number
      of
      Capital Securities _____

     

    Certificate
      Evidencing Capital Securities

     

    of

     

    HNC
      STATUTORY TRUST III 

     

    Fixed/Floating
      Rate Capital Securities

     

    (liquidation
      amount $1,000 per Capital Security)

     

    HNC
      Statutory Trust III, a statutory trust created under the laws of the State
      of
      Delaware (the “Trust”), hereby certifies that SIGLER & CO. (the “Holder”) is
      the registered owner of  
      capital
      securities of the Trust representing undivided beneficial interests in the
      assets of the Trust, designated the Fixed/Floating Rate Capital Securities
      (liquidation amount $1,000 per Capital Security) (the “Capital Securities”).
      Subject to the Declaration (as defined below), the Capital Securities are
      transferable on the books and records of the Trust, in person or by a duly
      authorized attorney, upon surrender of this Certificate duly endorsed and in
      proper form for transfer. The Capital Securities represented hereby are issued
      pursuant to, and the designation, rights, privileges, restrictions, preferences
      and other terms and provisions of the Capital Securities shall in all respects
      be subject to, the provisions of the Amended and Restated Declaration of Trust
      of the Trust, dated as of September
      28, 2005, among George S. Rapp and Michael B. High, as Administrators,
      Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
      Institutional Trustee, Harleysville National Corporation, as Sponsor, and the
      holders from time to time of undivided beneficial interests in the assets of
      the
      Trust, including the designation of the terms of the Capital Securities as
      set
      forth in Annex I to the Declaration, as the same may be amended from time to
      time (the “Declaration”). Capitalized terms used herein but not defined shall
      have the meaning given them in the Declaration. The Holder is entitled to the
      benefits of the Guarantee to the extent provided therein. The Sponsor will
      provide a copy of the Declaration, the Guarantee, and the Indenture to the
      Holder without charge upon written request to the Sponsor at its principal
      place
      of business.

     

    By
      acceptance of this Certificate, the Holder is bound by the Declaration and
      is
      entitled to the benefits thereunder.

     

    By
      acceptance of this Certificate, the Holder agrees to treat, for United States
      federal income tax purposes, the Debentures as indebtedness and the Capital
      Securities as evidence of beneficial ownership in the Debentures.

     

    This
      Certificate and the Capital Securities evidenced hereby are governed by, and
      shall be construed in accordance with, the laws of the State of Delaware,
      without regard to principles of conflict of laws.

     

    This
      Certificate may contain more than one counterpart of the signature page and
      this
      Certificate may be executed and authenticated by the affixing of the signature
      of an Administrator on behalf of the Trust, and the signature of the
      Institutional Trustee providing

     

    
      
        
        

      

      
        A-1-3

        
          

        

      

      
        
        
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 Trust had executed, and the Institutional Trustee had
        authenticated, a single signature page.

    

     

     

    
      
        
        

      

      
        A-1-4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Trust has duly executed this Certificate.

     

    HNC
      STATUTORY TRUST III

     

    By:________________________________

     

    Name:
      George S. Rapp 

                                           
      Title: Administrator 

     

    
      	  	
                Dated:
                ___________________________

            	 

    

     

    

     

    CERTIFICATE
      OF AUTHENTICATION

     

    This
      Certificate represents Capital Securities referred to in the within-mentioned
      Declaration.

     

    WILMINGTON
      TRUST COMPANY, 

    not
      in
      its individual capacity but solely as the Institutional Trustee

    

     

    

     

    By:_______________________________  Authorized
      Officer

    

    
      	 	
              Dated:
                ___________________________

            	 

    

    
      
        
          
            	
                     

                  	
                    A-1-5

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    [FORM
      OF
      REVERSE OF SECURITY]

     

    Distributions
      payable on each Capital Security will be payable at a fixed per annum rate
      of
      interest equal to 5.67% through the end of the Fixed Period (as defined in
      the
      Declaration), and at a variable per annum rate of interest, which, with respect
      to any Distribution Period (as defined herein) thereafter will be equal to
      LIBOR
      (as defined in the Declaration) plus 1.40% (collectively, the “Coupon Rate”),
      such rate being the rate of interest payable on the Debentures to be held by
      the
      Institutional Trustee. Except as set forth below in respect of an Extension
      Period, Distributions in arrears for more than one Distribution Period will
      bear
      interest thereon compounded quarterly at the applicable Coupon Rate for each
      such Distribution Period (to the extent permitted by applicable law). The term
      “Distributions” as used herein includes cash distributions, any such compounded
      distributions and any Additional Interest payable on the Debentures unless
      otherwise stated. A Distribution is payable only to the extent that payments
      are
      made in respect of the Debentures held by the Institutional Trustee and to
      the
      extent the Institutional Trustee has funds legally available in the Property
      Account therefor. The amount of Distributions payable for each Distribution
      Period will be computed on the basis of a 360-day year and the actual number
      of
      days elapsed in the relevant Distribution Period.

     

    Except
      as
      otherwise described below, Distributions on the Capital Securities will be
      cumulative, will accrue from the date of original issuance and will be payable
      quarterly in arrears on February 23, May 23, August 23 and November 23 of each
      year, commencing on November 23, 2005 (each, a “Distribution Payment Date”). The
      Debenture Issuer has the right under the Indenture to defer payments of interest
      on the Debentures by extending the interest payment period for up to 20
      consecutive quarterly periods (each, an “Extension Period”) at any time and from
      time to time on the Debentures, subject to the conditions described below.
      During any Extension Period, interest will continue to accrue on the Debentures,
      and interest on such accrued interest (such accrued interest and interest
      thereon referred to herein as “Deferred Interest”) will accrue at an annual rate
      equal to the Coupon Rate in effect for each such Extension Period, compounded
      quarterly from the date such Deferred Interest would have been payable were
      it
      not for the Extension Period, to the extent permitted by law. No Extension
      Period may end on a date other than a Distribution Payment Date. At the end
      of
      any such Extension Period, the Debenture Issuer shall pay all Deferred Interest
      then accrued and unpaid on the Debentures; provided,
      however,
      that no
      Extension Period may extend beyond the Maturity Date, Redemption Date or Special
      Redemption Date. Prior to the termination of any Extension Period, the Debenture
      Issuer may further extend such period, provided,
      that
      such period together with all such previous and further consecutive extensions
      thereof shall not exceed 20 consecutive quarterly periods, or extend beyond
      the
      Maturity Date, Redemption Date or Special Redemption Date. Upon the termination
      of any Extension Period and upon the payment of all Deferred Interest, the
      Debenture Issuer may commence a new Extension Period, subject to the foregoing
      requirements. 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, 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.
      If
      Distributions are deferred, the Distributions due shall be paid on the date
      that
      the related Extension Period terminates to Holders of the Securities as they
      appear on the books and records of the Trust on the record date immediately
      preceding such date. Distributions on the Securities must be paid on the dates
      payable (after giving effect to any Extension Period) to the extent that the
      Trust has funds legally available for the payment of such distributions in
      the
      Property Account of the Trust. The Trust’s funds available for Distribution to
      the Holders of the Securities will be 

     

    
      
        
        

      

      
        A-1-6

        
          

        

      

      
        
        

      

    

    limited
      to payments received from the Debenture Issuer. The payment of Distributions
      out
      of moneys held by the Trust is guaranteed by the Guarantor pursuant to the
      Guarantee.

     

    The
      Capital Securities shall be redeemable as provided in the
      Declaration.

     

    
      
        
          A-1-7

        

      

      
        
        

        
          

        

      

    

     

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned assigns and transfers the Capital Securities evidenced
      by this Capital Security Certificate to:

     

     

     

     

    (Insert
      assignee’s social security or tax identification number)

     

     

     

     

    (Insert
      address and zip code of assignee), 

    

    and
      irrevocably appoints  

    as
      agent
      to transfer the Capital Securities evidenced by this Capital Security
      Certificate on the books of the Trust. The agent may substitute another to
      act
      for it, him or her.

     

    Date: 

     

    Signature:     

     

    (Sign
      exactly as your name appears on the other side of this Capital Security
      Certificate)

     

    Signature
      Guarantee:1          

     

    

     

    

     

    

      

      
        1 Signature
          must be guaranteed by an “eligible guarantor institution” that is a bank,
          stockbroker, savings and loan association or credit union meeting the
          requirements of the Security registrar, which requirements include membership
          or
          participation in the Securities Transfer Agents Medallion Program (“STAMP”) or
          such other “signature guarantee program” as may be determined by the Security
          registrar in addition to, or in substitution for, STAMP, all in accordance
          with
          the Securities Exchange Act of 1934, as amended.

         

      

    

    
      
        
          
            	
                     

                  	
                    A-1-8

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      A-2

     

    

     

    FORM
      OF COMMON SECURITY CERTIFICATE

     

    THIS
      COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED, OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS
      AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
      TO AN EXEMPTION FROM REGISTRATION.

     

    EXCEPT
      AS
      SET FORTH IN SECTION 8.1(b) OF THE DECLARATION (AS DEFINED BELOW), THIS SECURITY
      MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED.

     

    
      
        
        

      

      
        A-2-1

        
          

        

      

      
        
        

      

    

    

     

    Certificate
      Number C-  Number
      of
      Common Securities ____

     

    Certificate
      Evidencing Common Securities

     

    of

     

    HNC
      STATUTORY TRUST III 

     

    HNC
      Statutory Trust III, a statutory trust created under the laws of the State
      of
      Delaware (the “Trust”), hereby certifies that Harleysville National Corporation
      (the “Holder”) is the registered owner of  
      common
      securities of the Trust representing undivided beneficial interests in the
      assets of the Trust (liquidation amount $1,000 per Common Security)(the “Common
      Securities”). The Common Securities represented hereby are issued pursuant to,
      and the designation, rights, privileges, restrictions, preferences and other
      terms and provisions of the Common Securities shall in all respects be subject
      to, the provisions of the Amended and Restated Declaration of Trust of the
      Trust, dated as of September 28, 2005, among George S. Rapp and Michael B.
      High,
      as Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington
      Trust Company, as Institutional Trustee, the Holder, as Sponsor, and the holders
      from time to time of undivided beneficial interests in the assets of the Trust,
      including the designation of the terms of the Common Securities as set forth
      in
      Annex I to the Declaration, as the same may be amended from time to time (the
      “Declaration”). Capitalized terms used herein but not defined shall have the
      meaning given them in the Declaration. The Sponsor will provide a copy of the
      Declaration and the Indenture to the Holder without charge upon written request
      to the Sponsor at its principal place of business.

     

    As
      set
      forth in the Declaration, when an Event of Default has occurred and is
      continuing, the rights of Holders of Common Securities to payment in respect
      of
      Distributions and payments upon Liquidation, redemption or otherwise are
      subordinated to the rights of payment of Holders of the Capital
      Securities.

     

    By
      acceptance of this Certificate, the Holder is bound by the Declaration and
      is
      entitled to the benefits thereunder.

     

    By
      acceptance of this Certificate, the Holder agrees to treat, for United States
      federal income tax purposes, the Debentures as indebtedness and the Common
      Securities as evidence of undivided beneficial ownership in the
      Debentures.

     

    This
      Certificate and the Common Securities evidenced hereby are governed by, and
      shall be construed in accordance with, the laws of the State of Delaware,
      without regard to principles of conflict of laws.

     

    

     

    
      
        
          
            	
                     

                  	
                    A-2-2

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the Trust has executed this Certificate this ___ day of ____,
      2005.

     

    HNC
      STATUTORY TRUST III 

     

    By:______________________________

     

    Name:
      George S. Rapp 

     

    Title:
      Administrator

     

    

     

    
      
        
          
            	
                     

                  	
                    A-2-3

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    [FORM
      OF
      REVERSE OF SECURITY]

     

    Distributions
      payable on each Common Security will be identical in amount to the Distributions
      payable on each Capital Security, which is at a fixed per annum rate of interest
      equal to 5.67% through the end of the Fixed Period (as defined in the
      Declaration), and at a variable per annum rate of interest, which, with respect
      to any Distribution Period (as defined herein) thereafter will be equal to
      LIBOR
      (as defined in the Declaration) plus 1.40% (collectively, the “Coupon Rate”),
      such rate being the rate of interest payable on the Debentures to be held by
      the
      Institutional Trustee. Except as set forth below in respect of an Extension
      Period, Distributions in arrears for more than one Distribution Period will
      bear
      interest thereon compounded quarterly at the applicable Coupon Rate for each
      such Distribution Period (to the extent permitted by applicable law). The term
      “Distributions” as used herein includes cash distributions, any such compounded
      distributions and any Additional Interest payable on the Debentures unless
      otherwise stated. A Distribution is payable only to the extent that payments
      are
      made in respect of the Debentures held by the Institutional Trustee and to
      the
      extent the Institutional Trustee has funds legally available in the Property
      Account therefor. The amount of Distributions payable for each Distribution
      Period will be computed on the basis of a 360-day year and the actual number
      of
      days elapsed in the relevant Distribution Period.

     

    Except
      as
      otherwise described below, Distributions on the Common Securities will be
      cumulative, will accrue from the date of original issuance and will be payable
      quarterly in arrears on February 23, May 23, August 23 and November 23 of each
      year, commencing on November 23, 2005 (each, a “Distribution Payment Date”). The
      Debenture Issuer has the right under the Indenture to defer payments of interest
      on the Debentures by extending the interest payment period for up to 20
      consecutive quarterly periods (each, an “Extension Period”) at any time and from
      time to time on the Debentures, subject to the conditions described below.
      During any Extension Period, interest will continue to accrue on the Debentures,
      and interest on such accrued interest (such accrued interest and interest
      thereon referred to herein as “Deferred Interest”) will accrue at an annual rate
      equal to the Coupon Rate in effect for each such Extension Period, compounded
      quarterly from the date such Deferred Interest would have been payable were
      it
      not for the Extension Period, to the extent permitted by law. No Extension
      Period may end on a date other than a Distribution Payment Date. At the end
      of
      any such Extension Period, the Debenture Issuer shall pay all Deferred Interest
      then accrued and unpaid on the Debentures; provided,
      however,
      that no
      Extension Period may extend beyond the Maturity Date, Redemption Date or Special
      Redemption Date. Prior to the termination of any Extension Period, the Debenture
      Issuer may further extend such period, provided,
      that
      such period together with all such previous and further consecutive extensions
      thereof shall not exceed 20 consecutive quarterly periods, or extend beyond
      the
      Maturity Date, Redemption Date or Special Redemption Date. Upon the termination
      of any Extension Period and upon the payment of all Deferred Interest, the
      Debenture Issuer may commence a new Extension Period, subject to the foregoing
      requirements. 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, 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.
      If
      Distributions are deferred, the Distributions due shall be paid on the date
      that
      the related Extension Period terminates to Holders of the Securities as they
      appear on the books and records of the Trust on 

     

    
      
        
        

      

      
        A-2-4

        
          

        

      

      
        
        
the
        record date immediately preceding such date. Distributions on the Securities
        must be paid on the dates payable (after giving effect to any Extension Period)
        to the extent that the Trust has funds legally available for the payment
        of such
        distributions in the Property Account of the Trust. The Trust’s funds available
        for Distribution to the Holders of the Securities will be limited to payments
        received from the Debenture Issuer. The payment of Distributions out of moneys
        held by the Trust is guaranteed by the Guarantor pursuant to the
        Guarantee.

    

     

    The
      Common Securities shall be redeemable as provided in the
      Declaration.

     

    
       

    

    
      
        
          

          
            	
                     

                  	
                    A-2-5

                  	 

          

          

        

        
        

      

      
        
          

        

      

      
        
        

      

    

    
       

    

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned assigns and transfers the Common Securities evidenced
      by this Common Security Certificate to:

     

     

     

     

    (Insert
      assignee’s social security or tax identification number)

     

     

     

     

    (Insert
      address and zip code of assignee), 

     

    and
      irrevocably appoints    as
      agent
      to transfer the Common Securities evidenced by this Common Security Certificate
      on the books of the Trust. The agent may substitute another to act for him
      or
      her.

     

    Date: 

     

    Signature:     

     

    (Sign
      exactly as your name appears on the other side of this Common Security
      Certificate)

     

    Signature
      Guarantee:2      

    

     

    

     

    

      

      
        2 Signature
          must be guaranteed by an “eligible guarantor institution” that is a bank,
          stockbroker, savings and loan association or credit union, meeting the
          requirements of the Security registrar, which requirements include membership
          or
          participation in the Securities Transfer Agents Medallion Program (“STAMP”) or
          such other “signature guarantee program” as may be determined by the Security
          registrar in addition to, or in substitution for, STAMP, all in accordance
          with
          the Securities Exchange Act of 1934, as amended. 

         

      

    

    
      
        
          

          
            	
                     

                  	
                    A-2-6

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF
      TRANSFEREE CERTIFICATE

     

    TO
      BE
      EXECUTED BY TRANSFEREES OTHER THAN QIBS

     

    __________,
           

     

    Harleysville
      National Corporation 

    HNC
      Statutory Trust III 

    483
      Main
      Street 

    Harleysville,
      Pennsylvania 19438 

    

    Re: Purchase
      of $1,000 stated liquidation amount of Fixed/Floating Rate Capital
      Securities 

     

    (the
      “Capital Securities”) of HNC Statutory Trust III 

     

    Ladies
      and Gentlemen:

     

    In
      connection with our purchase of the Capital Securities we confirm
      that:

     

    1. We
      understand that the Fixed/Floating Rate Capital Securities (the “Capital
      Securities”) of HNC Statutory Trust III (the “Trust”) (including the guarantee
      (the “Guarantee”) of Harleysville National Corporation (the “Company”) executed
      in connection therewith) and the Fixed/Floating Rate Junior Subordinated Debt
      Securities due 2035 of the Company (the “Subordinated Debt Securities”) (the
      Capital Securities, the Guarantee and the Subordinated Debt Securities together
      being referred to herein as the “Offered Securities”), have not been registered
      under the Securities Act of 1933, as amended (the “Securities Act”), and may not
      be offered or sold except as permitted in the following sentence. We agree
      on
      our own behalf and on behalf of any investor account for which we are purchasing
      the Capital Securities that, if we decide to offer, sell or otherwise transfer
      any such Capital Securities, such offer, sale or transfer will be made only
      (a)
      to the Company or the Trust, (b) pursuant to Rule 144A under the Securities
      Act,
      to a person we reasonably believe is a qualified institutional buyer under
      Rule
      144A (a “QIB”) that purchases for its own account or for the account of a QIB
      and to whom notice is given that the transfer is being made in reliance on
      Rule
      144A, (c) pursuant to an exemption from registration, 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 Capital Securities for its own
      account or for the account of such an accredited investor for investment
      purposes and not with a view to, or for offer or sale in connection with, any
      distribution thereof in violation of the Securities Act, or (d) pursuant to
      another available exemption from the registration requirements of the Securities
      Act, and in each of the foregoing cases in accordance with any applicable state
      securities laws and any requirements of law that govern the disposition of
      our
      property. The foregoing restrictions on resale will not apply subsequent to
      the
      date on which, in the written opinion of counsel, the Capital Securities are
      not
“restricted securities” within the meaning of Rule 144 under the Securities Act.
      If any resale or other transfer of the Capital Securities is proposed to be
      made
      pursuant to clause (c) or (d) above, the transferor shall deliver a letter
      from
      the transferee substantially in the form of this letter to the Institutional
      Trustee as Transfer Agent, which shall provide as applicable, among other
      things, that the transferee is an “accredited 

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        
investor”
        within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under
        the
        Securities Act that is acquiring such Securities for investment purposes
        and not
        for distribution in violation of the Securities Act. We acknowledge on our
        behalf and on behalf of any investor account for which we are purchasing
        Securities that the Trust and the Company reserve the right prior to any
        offer,
        sale or other transfer pursuant to clause (c) or (d) to require the delivery
        of
        any opinion of counsel, certifications and/or other information satisfactory
        to
        the Trust and the Company. We understand that the certificates for any Capital
        Security that we receive will bear a legend substantially to the effect of
        the
        foregoing.

    

     

    2. We
      are an
“accredited investor” within the meaning of subparagraph (a) (1), (2), (3) or
      (7) of Rule 501 under the Securities Act purchasing for our own account or
      for
      the account of such an “accredited investor,” and we are acquiring the Capital
      Securities for investment purposes and not with view to, or for offer or sale
      in
      connection with, any distribution in violation of the Securities Act, and we
      have such knowledge and experience in financial and business matters as to
      be
      capable of evaluating the merits and risks of our investment in the Capital
      Securities, and we and any account for which we are acting are each able to
      bear
      the economic risks of our or its investment.

     

    3. We
      are
      acquiring the Capital Securities purchased by us for our own account (or for
      one
      or more accounts as to each of which we exercise sole investment discretion
      and
      have authority to make, and do make, the statements contained in this letter)
      and not with a view to any distribution of the Capital Securities, subject,
      nevertheless, to the understanding that the disposition of our property will
      at
      all times be and remain within our control.

     

    4. In
      the
      event that we purchase any Capital Securities or any Subordinated Debt
      Securities, we will acquire such Capital Securities having an aggregate stated
      liquidation amount of not less than $100,000 or such Subordinated Debt
      Securities having an aggregate principal amount not less than $100,000, for
      our
      own account and for each separate account for which we are acting.

     

    5. We
      acknowledge that we either (A) are not a fiduciary of a pension, profit-sharing
      or other employee benefit plan subject to the Employee Retirement Income
      Security Act of 1974, as amended (“ERISA”) (a “Plan”), or an entity whose assets
      include “plan assets” by reason of any Plan’s investment in the entity and are
      not purchasing the Capital Securities on behalf of or with “plan assets” by
      reason of any Plan’s investment in the entity and are not purchasing the Capital
      Securities on behalf of or with “plan assets” of any Plan or (B) are eligible
      for the exemptive relief available under one or more of the following prohibited
      transaction class exemptions (“PTCEs”) issued by the U.S. Department of Labor:
      PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.

     

    6. We
      acknowledge that each Plan, by its purchase of the Capital Securities, will
      be
      deemed to have directed the Trust to invest in the junior subordinated debt
      securities of the Company, and to have consented to the appointment of the
      institutional trustee of the Trust.

     

    7. We
      acknowledge that the Trust and the Company and others will rely upon the truth
      and accuracy of the foregoing acknowledgments, representations, warranties
      and
      agreements and agree that if any of our acknowledgments, representations,
      warranties and 

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        
agreements
        are no longer accurate, we shall promptly notify the Placement Agent. If
        we are
        acquiring any Capital Securities as a fiduciary or agent for one or more
        investor accounts, we represent that we have sole discretion with respect
        to
        each such investor account and that we have full power to make the foregoing
        acknowledgments, representations and agreements on behalf of each such investor
        account.

    

     

    You
      are
      entitled to rely upon this letter and are irrevocably authorized to produce
      this
      letter or a copy hereof to any interested party in any administrative or legal
      proceeding or official inquiry with respect to the matters covered
      hereby.

     

    

    

    (Name
      of
      Purchaser)

     

    By:       

     

    Date:      

     

    Upon
      transfer, the Capital Securities should be registered in the name of the new
      beneficial owner as follows.

     

    Name:       

     

    Address:      

     

    Taxpayer
      ID Number:     

     

    

     

    
      
        
          

          
            	
                     

                  	
                    B-3

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      C

     

    FORM
      OF
      TRANSFEROR CERTIFICATE

     

    TO
      BE
      EXECUTED FOR QIBs

     

    __________,
           

     

    Harleysville
      National Corporation 

    HNC
      Statutory Trust III 

    483
      Main
      Street 

    Harleysville,
      Pennsylvania 19438 

    

    Re: Purchase
      of $1,000 stated liquidation amount of Fixed/Floating Rate Capital
      Securities

     

    (the
      “Capital Securities”) of HNC Statutory Trust III 

     

    Reference
      is hereby made to the Amended and Restated Declaration of Trust of HNC Statutory
      Trust III, dated as of September 28, 2005 (the “Declaration”), among George S.
      Rapp and Michael B. High, as Administrators, Wilmington Trust Company, as
      Delaware Trustee, Wilmington Trust Company, as Institutional Trustee,
      Harleysville National Corporation, as Sponsor, and the holders from time to
      time
      of undivided beneficial interests in the assets of HNC Statutory Trust III.
      Capitalized terms used but not defined herein shall have the meanings given
      them
      in the Declaration.

     

    This
      letter relates to $[_______________] aggregate liquidation amount of Capital
      Securities which are held in the name of [name of transferor] (the
“Transferor”).

     

    In
      accordance with Section 8.2(b) of the Declaration, the Transferor does hereby
      certify that such Capital Securities are being transferred in accordance with
      (i) the transfer restrictions set forth in the Capital Securities and (ii)
      Rule
      144A under the Securities Act (“Rule 144A”), to a transferee that the Transferor
      reasonably believes is purchasing the Capital Securities for its own account
      or
      an account with respect to which the transferee exercises sole investment
      discretion and the transferee and any such account is a “qualified institutional
      buyer” within the meaning of Rule 144A, in a transaction meeting the
      requirements of Rule 144A and in accordance with applicable securities laws
      of
      any state of the United States or any other jurisdiction.

     

    You
      are
      entitled to rely upon this letter and are irrevocably authorized to produce
      this
      letter or a copy hereof to any interested party in any administrative or legal
      proceeding or official inquiry with respect to the matters covered
      hereby.

     

    (Name
      of
      Transferor)

     

    By:       

    Name:     

     

    Title:     

     

    Date:     

    
      
        
          

          
            	
                     

                  	
                    C-1

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    
                                                                           Exhibit
    D

    ADMINISTRATOR’S
      CERTIFICATE

    OF

    HNC
      STATUTORY TRUST III 

    

    Pursuant
      to Section 2.6(a)(i)(P) of the Amended and Restated Declaration of Trust of
      HNC
      Statutory Trust III (the “Trust”) among Harleysville National Corporation as
      Sponsor, Wilmington Trust Company, as Institutional Trustee, Wilmington Trust
      Company, as Delaware Trustee, the Administrators named therein, and the holders
      from time to time of beneficial interests in the assets of the Trust, dated
      as
      of September 28, 2005 (as modified, supplemented or amended from time to time,
      the “Trust Agreement”), the undersigned (on behalf of the Trust) hereby
      certifies that he/she is an Administrator of the Trust and that, to his/her
      knowledge under the terms of the Trust Agreement, the Trust has complied
      (without regard to any period of grace or requirement of notice provided under
      the Trust Agreement) with all conditions and covenants under the Trust Agreement
      for the year 20__.

    

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

    

    IN
      WITNESS WHEROF, the undersigned has executed this Administrator’s Certificate as
      of __________, 20__.

    

    

    
      	 	 	 
	 	
              as
                Administrator

            	 

    

    

    
      
        
          

          
            	
                     

                  	
                    D-1

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