Document:

Exhibit 10.3

                        COMMON STOCK DELIVERY AGREEMENT

     This Common Stock Delivery Agreement (the "Agreement") is being made as
of the 21st day of June, 2005 by and between Reckson Operating Partnership,
L.P., a Delaware limited partnership (the "Operating Partnership"), and
Reckson Associates Realty Corp., a Maryland corporation (the "Company").

                                   Recitals
                                   --------

     WHEREAS, the Company is the general partner of the Operating Partnership;
and

     WHEREAS, the Operating Partnership and the Company have entered into an
Underwriting Agreement, dated June 21, 2005, with Citigroup Global Markets
Inc. (the "Underwriter"), as such Underwriting Agreement is incorporated by
reference into a Terms Agreement, dated June 21, 2005, among the Operating
Partnership, the Company and the Underwriter, providing for the sale to the
Underwriter by the Operating Partnership of $250,000,000 aggregate principal
amount of its 4.00% Exchangeable Senior Debentures due 2025 (the "Debentures")
under the Indenture, dated as of March 26, 1999, among the Operating
Partnership, as Issuer, the Company, as Guarantor, and The Bank of New York,
as Trustee (the "Indenture"), and granting the Underwriter an option to
purchase up to an additional $37,500,000 in principal amount of the Debentures
to cover any over-allotments, which Debentures shall be exchangeable into cash
and, if applicable, shares of common stock, par value $0.01 per share, of the
Company (the "Common Stock") under certain circumstances; and

     WHEREAS, the Debentures will be fully and unconditionally guaranteed as
to the payment of principal thereof and interest thereon by the Company (the
"Guarantee").

     NOW, THEREFORE, in consideration of the foregoing and in consideration of
the mutual covenants contained herein, the parties agree as follows:

                                   Agreement
                                   ---------

     1. The Operating Partnership hereby acknowledges that it is the primary
obligor of the Debentures and is, therefore, responsible for the obligations
contained in the Debentures, other than those related to the Guarantee.

     2. If the Operating Partnership determines, in its sole discretion, to
deliver Net Shares (as such term is defined in the Debentures) upon an
exchange of the Debentures by a holder in accordance with the terms of the
Debentures and the Indenture, the Company agrees to issue to the Operating
Partnership the number of shares of Common Stock determined by the Operating
Partnership to be delivered to such holder in respect of such Net Shares, and
the Operating Partnership hereby directs the Company to deliver such Net
Shares to such holder on behalf of the Operating Partnership in accordance
with the terms of the Debentures and the Indenture.

<PAGE>

     3. The Operating Partnership agrees to issue to the Company on a
concurrent basis a number of "Partnership Units" (as defined in the Amended
and Restated Agreement of Limited Partnership of the Operating Partnership,
dated June 2, 1995, as amended) equal in number to the number of shares of
Common Stock issued by the Company pursuant to this Agreement.

     4. The Company agrees that it will not consolidate with or merge into
another business entity or transfer or lease all or substantially all of its
assets, unless:

          o    either (1) the Company is the continuing entity in the case of
               a merger or (2) the resulting, surviving or acquiring entity,
               if other than the Company, is a U.S. entity and it expressly
               assumes the Company's obligations under this Agreement and the
               Indenture;

          o    immediately after giving effect to the transaction, no Event of
               Default under, and as defined in, the Indenture and no
               circumstances which, after notice or lapse of time or both,
               would become an Event of Default under the Indenture, shall
               have happened and be continuing; and

          o    the Company has delivered to the Trustee an officers'
               certificate and a legal opinion confirming that the Company has
               complied with the Indenture.

     5. Miscellaneous.

          (a) This Agreement shall be governed by and construed in accordance
     with the laws of the State of New York, without giving effect to conflict
     laws, rules or principles.

          (b) No provision of this Agreement may be amended, modified or
     waived, except in writing signed by both parties.

          (c) In the event that any claim of inconsistency between this
     Agreement and the terms of the Indenture arise, as they may from time to
     time be amended, the terms of the Indenture shall control.

          (d) If any provision of this Agreement shall be held illegal,
     invalid or unenforceable by any court, this Agreement shall be construed
     and enforced as if such provision had not been contained herein and shall
     be deemed an Agreement between the parties hereto to the full extent
     permitted by applicable law.

                                     -2-
<PAGE>

          (e) This Agreement shall be binding upon, inure to the benefit of
     and be enforceable by the respective successors and assigns of the
     parties hereto.

          (f) This Agreement may not be assigned by either party without the
     prior written consent of both parties.

                                     -3-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year above written.

                                RECKSON OPERATING PARTNERSHIP, L.P.

                                By:  Reckson Associates Realty Corp.,
                                     its General Partner

                                By:  /s/ Jason M. Barnett
                                     -----------------------------------------
                                     Name:    Jason M. Barnett
                                     Title:   Executive Vice President,
                                              General Counsel and Secretary

                                RECKSON ASSOCIATES REALTY CORP.

                                By:  /s/ Jason M. Barnett
                                     -----------------------------------------
                                     Name:    Jason M. Barnett
                                     Title:   Executive Vice President,
                                              General Counsel and Secretary

                                     -4-EXHIBIT 4.1

                      Hallmark Financial Services, Inc.,
                                  as Company

                                  INDENTURE
                          Dated as of June 21, 2005

                  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                  as Trustee

                     JUNIOR SUBORDINATED DEBT SECURITIES

                              Due June 15, 2035

<PAGE>

                              TABLE OF CONTENTS
                                                                        Page
                                                                        ----
                                  ARTICLE I
                                 DEFINITIONS

 SECTION 1.01.  Definitions.....................................          1

      Additional Interest.......................................          1

      Additional Provisions.....................................          1

      Authenticating Agent......................................          1

      Bankruptcy Law............................................          1

      Board of Directors........................................          1

      Board Resolution..........................................          2

      Business Day..............................................          2

      Calculation Agent.........................................          2

      Capital Securities........................................          2

      Capital Securities Guarantee..............................          2

      Certificate...............................................          2

      Common Securities.........................................          2

      Company...................................................          3

      Debt Security.............................................          3

      Debt Security Register....................................          3

      Declaration...............................................          3

      Default...................................................          3

      Defaulted Interest........................................          3

      Deferred Interest.........................................          3

      Event of Default..........................................          3

      Extension Period..........................................          3

      Indenture.................................................          3

      Institutional Trustee.....................................          3

      Interest Payment Date.....................................          3

      Interest Rate.............................................          3

      Investment Company Event..................................          3

      LIBOR.....................................................          4

      LIBOR Banking Day.........................................          4

      LIBOR Business Day........................................          4

      LIBOR Determination Date..................................          4

      Liquidation Amount........................................          4

      Maturity Date.............................................          4

      Notice....................................................          4

      Officers' Certificate.....................................          4

      Opinion of Counsel........................................          4

      Outstanding,..............................................          4

      Paying Agent..............................................          5

      Person....................................................          5

      Predecessor Security......................................          5

      Principal Office of the Trustee...........................          5

      Redemption Date...........................................          5

      Redemption Price..........................................          5

      Responsible Officer.......................................          5

      Securityholder............................................          5

      Senior Indebtedness.......................................          5

      Special Event.............................................          6

      Special Redemption Date...................................          6

      Special Redemption Price..................................          6

      Subsidiary................................................          6

      Tax Event.................................................          6

      Trust.....................................................          7

      Trust Indenture Act.......................................          7

      Trust Securities..........................................          7

      Trustee...................................................          7

      United States.............................................          7

      U.S. Person...............................................          7

                                  ARTICLE II
                               DEBT SECURITIES

 SECTION 2.01.  Authentication and Dating.......................          7

 SECTION 2.02.  Form of Trustee's Certificate of Authentication.          8

 SECTION 2.03.  Form and Denomination of Debt Securities........          8

 SECTION 2.04.  Execution of Debt Securities....................          8

 SECTION 2.05.  Exchange and Registration of Transfer of Debt
                Securities......................................          9

 SECTION 2.06.  Mutilated, Destroyed, Lost or Stolen Debt
                Securities......................................         12

 SECTION 2.07.  Temporary Debt Securities.......................         12

 SECTION 2.08.  Payment of Interest.............................         13

 SECTION 2.09.  Cancellation of Debt Securities Paid, etc.......         14

 SECTION 2.10.  Computation of Interest.........................         14

 SECTION 2.11.  Extension of Interest Period....................         16

 SECTION 2.12.  CUSIP Numbers...................................         17

                                 ARTICLE III
                     PARTICULAR COVENANTS OF THE COMPANY

 SECTION 3.01.  Payment of Principal, Premium and Interest;
                Agreed Treatment of the Debt Securities.........         17

 SECTION 3.02.  Offices for Notices and Payments, etc...........         18

 SECTION 3.03.  Appointments to Fill Vacancies in Trustee's
                Office..........................................         18

 SECTION 3.04.  Provision as to Paying Agent....................         19

 SECTION 3.05.  Certificate to Trustee..........................         20

 SECTION 3.06.  Additional Interest.............................         20

 SECTION 3.07.  Compliance with Consolidation Provisions........         20

 SECTION 3.08.  Limitation on Dividends.........................         20

 SECTION 3.09.  Covenants as to the Trust.......................         21

                                  ARTICLE IV
               LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

 SECTION 4.01.  Securityholders' Lists..........................         22

 SECTION 4.02.  Preservation and Disclosure of Lists............         22

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

 SECTION 5.01.  Events of Default...............................         23

 SECTION 5.02.  Payment of Debt Securities on Default; Suit
                Therefor........................................         25

 SECTION 5.03.  Application of Moneys Collected by Trustee......         26

 SECTION 5.04.  Proceedings by Securityholders..................         27

 SECTION 5.05.  Proceedings by Trustee..........................         27

 SECTION 5.06.  Remedies Cumulative and Continuing..............         28

 SECTION 5.07.  Direction of Proceedings and Waiver of Defaults
                by Majority of Securityholders..................         28

 SECTION 5.08.  Notice of Defaults..............................         29

 SECTION 5.09.  Undertaking to Pay Costs........................         29

                                  ARTICLE VI
                            CONCERNING THE TRUSTEE

 SECTION 6.01.  Duties and Responsibilities of Trustee..........         29

 SECTION 6.02.  Reliance on Documents, Opinions, etc............         31

 SECTION 6.03.  No Responsibility for Recitals, etc.............         32

 SECTION 6.04.  Trustee, Authenticating Agent, Paying Agents,
                Transfer Agents or Registrar May Own Debt
                Securities......................................         32

 SECTION 6.05.  Moneys to be Held in Trust......................         32

 SECTION 6.06.  Compensation and Expenses of Trustee............         32

 SECTION 6.07.  Officers' Certificate as Evidence...............         33

 SECTION 6.08.  Eligibility of Trustee..........................         33

 SECTION 6.09.  Resignation or Removal of Trustee, Calculation
                Agent, Paying Agent or Debt Security Registrar..         34

 SECTION 6.10.  Acceptance by Successor.........................         35

 SECTION 6.11.  Succession by Merger, etc.......................         36

 SECTION 6.12.  Authenticating Agents...........................         36

                                 ARTICLE VII
                        CONCERNING THE SECURITYHOLDERS

 SECTION 7.01.  Action by Securityholders.......................         38

 SECTION 7.02.  Proof of Execution by Securityholders...........         38

 SECTION 7.03.  Who Are Deemed Absolute Owners..................         39

 SECTION 7.04.  Debt Securities Owned by Company Deemed Not
                Outstanding.....................................         39

 SECTION 7.05.  Revocation of Consents; Future Holders Bound....         39

                                 ARTICLE VIII
                          SECURITYHOLDERS' MEETINGS

 SECTION 8.01.  Purposes of Meetings............................         40

 SECTION 8.02.  Call of Meetings by Trustee.....................         40

 SECTION 8.03.  Call of Meetings by Company or Securityholders..         40

 SECTION 8.04.  Qualifications for Voting.......................         41

 SECTION 8.05.  Regulations.....................................         41

 SECTION 8.06.  Voting..........................................         41

 SECTION 8.07.  Quorum; Actions.................................         41

 SECTION 8.08.  Written Consent Without a Meeting...............         44

                                  ARTICLE IX
                           SUPPLEMENTAL INDENTURES

 SECTION 9.01.  Supplemental Indentures without Consent of
                Securityholders.................................         43

 SECTION 9.02.  Supplemental Indentures with Consent of
                Securityholders.................................         44

 SECTION 9.03.  Effect of Supplemental Indentures...............         45

 SECTION 9.04.  Notation on Debt Securities.....................         45

 SECTION 9.05.  Evidence of Compliance of Supplemental
                Indenture to be Furnished to Trustee............         45

                                  ARTICLE X
                           REDEMPTION OF SECURITIES

 SECTION 10.01. Optional Redemption.............................         46

 SECTION 10.02. Special Event Redemption........................         46

 SECTION 10.03. Notice of Redemption; Selection of Debt
                Securities......................................         46

 SECTION 10.04. Payment of Debt Securities Called for
                Redemption......................................         47

                                  ARTICLE XI
              CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 SECTION 11.01. Company May Consolidate, etc., on Certain
                Terms...........................................         47

 SECTION 11.02. Successor Entity to be Substituted..............         48

 SECTION 11.03. Opinion of Counsel to be Given to Trustee.......         48

                                 ARTICLE XII
                   SATISFACTION AND DISCHARGE OF INDENTURE

 SECTION 12.01. Discharge of Indenture..........................         49

 SECTION 12.02. Deposited Moneys to be Held in Trust by
                Trustee.........................................         49

 SECTION 12.03. Paying Agent to Repay Moneys Held...............         50

 SECTION 12.04. Return of Unclaimed Moneys......................         50

                                 ARTICLE XIII
       IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 SECTION 13.01. Indenture and Debt Securities Solely Corporate
                Obligations.....................................         50

                                 ARTICLE XIV
                           MISCELLANEOUS PROVISIONS

 SECTION 14.01. Successors......................................         50

 SECTION 14.02. Official Acts by Successor Entity...............         51

 SECTION 14.03. Surrender of Company Powers.....................         51

 SECTION 14.04. Addresses for Notices, etc......................         51

 SECTION 14.05. Governing Law...................................         51

 SECTION 14.06. Evidence of Compliance with Conditions
                Precedent.......................................         51

 SECTION 14.07. Non-Business Days...............................         52

 SECTION 14.08. Table of Contents, Headings, etc................         52

 SECTION 14.09. Execution in Counterparts.......................         52

 SECTION 14.10. Separability....................................         52

 SECTION 14.11. Assignment......................................         53

 SECTION 14.12. Acknowledgment of Rights........................         53

                                  ARTICLE XV
                       SUBORDINATION OF DEBT SECURITIES

 SECTION 15.01. Agreement to Subordinate........................         53

 SECTION 15.02. Default on Senior Indebtedness..................         54

 SECTION 15.03. Liquidation; Dissolution; Bankruptcy............         54

 SECTION 15.04. Subrogation.....................................         55

 SECTION 15.05. Trustee to Effectuate Subordination.............         56

 SECTION 15.06. Notice by the Company...........................         56

 SECTION 15.07. Rights of the Trustee. Holders of Senior
                Indebtedness....................................         57

 SECTION 15.08. Subordination May Not Be Impaired...............         57

 EXHIBITS

 EXHIBIT A      FORM OF DEBT SECURITY

<PAGE>

           THIS INDENTURE,  dated  as  of June  21,  2005,  between  Hallmark
 Financial Services,  Inc., a  company  incorporated in  Nevada  (hereinafter
 sometimes  called  the  "Company"),   and  JPMorgan  Chase  Bank,   National
 Association as trustee (hereinafter sometimes called the "Trustee").

                             W I T N E S S E T H:

           WHEREAS, for its lawful corporate  purposes, the Company has  duly
 authorized the issuance of its Junior Subordinated Debt Securities  due June
 15, 2035 (the "Debt  Securities") under this Indenture  and to provide  for,
 among  other  things,  the   execution  and  authentication,  delivery   and
 administration thereof, the  Company has  duly authorized  the  execution of
 this Indenture.

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

                                  ARTICLE I

                                 DEFINITIONS

      SECTION 1.1.  Definitions.
                    ------------
           The terms defined in this Section 1.01 (except as herein otherwise
 expressly provided  or  unless  the  context  otherwise  requires)  for  all
 purposes of this Indenture  and of any  indenture supplemental hereto  shall
 have the respective meanings specified in this Section 1.01. All  accounting
 terms used herein and not expressly defined shall have the meanings assigned
 to such terms  in accordance with  generally accepted accounting  principles
 and  the  term  "generally   accepted  accounting  principles"  means   such
 accounting principles as are generally accepted in the United States at  the
 time of any computation.  The words "herein,"  "hereof' and "hereunder"  and
 other words of similar import refer to this Indenture as a whole and not  to
 any particular Article, Section or other subdivision.

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

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

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

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

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

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

            "Business Day" means any day other than a Saturday, Sunday or any
 other day on which  banking institutions in  Wilmington, Delaware, New  York
 City or the city  of the Principal  Office of the  Trustee are permitted  or
 required by any applicable law or executive order to close.

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

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

            "Capital Securities Guarantee" means the guarantee agreement that
 the Company has entered into as of the date hereof with JPMorgan Chase Bank,
 National Association that operates directly or indirectly for the benefit of
 holders of Capital Securities of the Trust.

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

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

            "Company"  means  Hallmark  Financial Services,  Inc.,  a company
 incorporated in Nevada, and, subject to the provisions of Article XI,  shall
 include its successors and assigns.

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

            "Debt  Security Register"  has the  meaning specified  in Section
 2.05.

            "Declaration" means the Amended and Restated Declaration of Trust
 of the Trust dated as of June 21, 2005, as amended or supplemented from time
 to time.

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

            "Defaulted Interest" has the meaning set forth in Section 2.08.

            "Deferred Interest" has the meaning set forth in Section 2.11.

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

            "Extension Period" has the meaning set forth in Section 2.11.

            "Fixed Rate"  means a per annum rate of interest, equal to 7.725%
 commencing the date hereof.

            "Fixed Rate Period" has the meaning set forth in Section 2.10.

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

            "Institutional  Trustee"   has  the  meaning  set  forth  in  the
 Declaration.

            "Interest Payment Date" means March 15, June 15, September 15 and
 December 15 of each year, commencing on September 15, 2005, during the  term
 of this Indenture.

            "Interest Period" has the meaning set fort in Section 2.08.

            "Interest  Rate"  means  the Fixed  Rate  and  Variable  Rate, as
 applicable.

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

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

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

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

            "LIBOR  Determination Date" has the  meaning set forth in Section
 2.10(b)(1).

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

            "Maturity Date" means June 15, 2035.

            "Notice" has the meaning set forth in Section 2.11.

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

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

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

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

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

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

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

            "Person"  means  any individual,  corporation,  limited liability
 company,  partnership,  joint  venture,  association,  joint-stock  company,
 trust, unincorporated organization or government or any agency or  political
 subdivision thereof.

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

            "Principal  Office  of  the  Trustee"  means  the  office  of the
 Trustee, at which at any particular time its corporate trust business  shall
 be principally administered, which at all times shall be located within  the
 United States and at the  time of the execution  of this Indenture shall  be
 600 Travis Street, 50th Floor, Houston, Texas 77002.

            "Redemption Date" has the meaning set forth in Section 10.01.

            "Redemption Price" means 100% of the principal amount of the Debt
 Securities being  redeemed plus  accrued and  unpaid interest  on such  Debt
 Securities to the Redemption Date.

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

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

            "Senior Indebtedness" means, with respect to the Company, (i) the
 principal, premium, if any, and interest  in respect of (A) indebtedness  of
 the Company for money borrowed and (B) indebtedness evidenced by securities,
 debentures, notes, bonds or other similar instruments issued by the Company;
 (ii) all capital lease obligations of the Company; (iii) all obligations  of
 the Company issued or  assumed as the deferred  purchase price of  property,
 all conditional sale obligations of the  Company and all obligations of  the
 Company under any  title retention agreement  (but excluding trade  accounts
 payable arising in the ordinary course of business); (iv) all obligations of
 the Company for  the reimbursement  of any  letter of  credit, any  banker's
 acceptance, any  security purchase  facility,  any repurchase  agreement  or
 similar arrangement, any interest rate swap, any other hedging  arrangement,
 any obligation under options or any similar credit or other transaction; (v)
 all obligations of the type referred to in clauses (i) through (iv) above of
 other Persons for the payment of which the Company is responsible or  liable
 as obligor, guarantor  or otherwise; and  (vi) all obligations  of the  type
 referred to in clauses (i) through (v) above of other Persons secured by any
 lien on any property or asset of the Company (whether or not such obligation
 is assumed by the Company), whether incurred on or prior to the date of this
 Indenture or  thereafter incurred,  unless, in  the instrument  creating  or
 evidencing the same  or pursuant  to which the  same is  outstanding, it  is
 provided that such obligations are not  superior or are pari passu in  right
 of  payment  to  the  Debt   Securities;  provided,  however,  that   Senior
 Indebtedness shall not include (X) any  debt securities issued to any  trust
 other than  the Trust  (or a  trustee of  such trust)  that is  a  financing
 vehicle of  the  Company (a  "financing  entity"), in  connection  with  the
 issuance  by  such  financing  entity  of  equity  or  other  securities  in
 transactions  substantially  similar  in   structure  to  the   transactions
 contemplated hereunder and in the Declaration  or (Y) any guarantees of  the
 Company in respect of the equity or other securities of any financing entity
 referred to in clause (X) above.

            "Special Event" means either a Tax Event or an Investment Company
 Event.

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

            "Special  Redemption Price" means  (1) if  the Special Redemption
 Date is before June 15, 2010, 107.5% of the principal amount to be  redeemed
 plus any accrued and unpaid interest thereon to the date of such  redemption
 and (2) if the  Special Redemption Date is  on or after  June 15, 2010,  the
 Redemption Price.

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

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

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

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

            "Trust Securities" means Common Securities and Capital Securities
 of Hallmark Statutory Trust I.

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

            "United  States"  means  the United  States  of  America  and the
 District of Columbia.

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

            "Variable  Rate"  means  a  per  annum  rate  of  interest, reset
 quarterly, equal to LIBOR, as determined on the LIBOR Determination Date for
 such Interest Payment Date, plus 3.25%; provided, however, that the Variable
 Rate for any Interest  Period may not exceed  the highest rate permitted  by
 New York law, as the same may be  modified by United States laws of  general
 application.

                                 ARTICLE II

                               DEBT SECURITIES

    SECTION 2.01.  Authentication and Dating.
                   --------------------------
           Upon the execution and delivery of this Indenture, or from time to
 time thereafter, Debt  Securities in an  aggregate principal  amount not  in
 excess of $30,928,000 may  be executed and delivered  by the Company to  the
 Trustee for authentication, and the Trustee shall thereupon authenticate and
 make available for  delivery said  Debt Securities  to or  upon the  written
 order of the Company, signed by its Chairman of the Board of Directors, Vice
 Chairman,  President  or  Chief  Financial  Officer  or  one  of  its   Vice
 Presidents,  without  any  further  action  by  the  Company  hereunder.  In
 authenticating  such   Debt  Securities,   and  accepting   the   additional
 responsibilities under this Indenture in  relation to such Debt  Securities,
 the Trustee shall  be entitled  to receive,  and (subject  to Section  6.01)
 shall be fully protected in relying upon  a copy of any Board Resolution  or
 Board Resolutions relating thereto and, if applicable, an appropriate record
 of any action taken pursuant to  such resolution, in each case certified  by
 the Secretary or an Assistant Secretary  or other officers with  appropriate
 delegated authority of the Company as the case may be.

            The Trustee shall have  the right to  decline to authenticate and
 deliver any Debt Securities under this Section if the Trustee, being advised
 by counsel, determines that such  action may not lawfully  be taken or if  a
 Responsible Officer of the Trustee in  good faith shall determine that  such
 action  would  expose  the  Trustee   to  personal  liability  to   existing
 Securityholders.  The Trustee shall also  be entitled to receive an  opinion
 of counsel to the effect that (1) all conditions precedent to the execution,
 delivery and authentication of the Securities  have been complied with;  (2)
 the Securities are not required to  be registered under the Securities  Act;
 and (3)  the Indenture  is not  required  to be  qualified under  the  Trust
 Indenture Act.

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

    SECTION 2.02.  Form of Trustee's Certificate of Authentication.
                   ------------------------------------------------
           The Trustee's certificate of authentication on all Debt Securities
 shall be in substantially the following form:

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

           JPMorgan Chase Bank,  National  Association, not in its  individual
 capacity but solely as Trustee.

                                   By --------------------------
                                          Authorized Officer

    SECTION 2.03.  Form and Denomination of Debt Securities.
                   -----------------------------------------
            The Debt Securities shall be substantially in the form of Exhibit
 A hereto.  The Debt  Securities shall  be in  registered, certificated  form
 without coupons and in minimum denominations of $100,000 and any multiple of
 $1,000 in excess thereof. The Debt  Securities shall be numbered,  lettered,
 or otherwise distinguished in such manner  or in accordance with such  plans
 as the officers executing  the same may determine  with the approval of  the
 Trustee as evidenced by the execution and authentication thereof.

    SECTION 2.04.  Execution of Debt Securities.
                   -----------------------------
            The Debt Securities shall be signed  in the name and on behalf of
 the Company by  the manual  or facsimile signature  of its  Chairman of  the
 Board of Directors, Vice Chairman, President  or Chief Financial Officer  or
 one of  its  Executive  Vice Presidents,  Senior  Vice  Presidents  or  Vice
 Presidents, under its  corporate seal (if  legally required),  which may  be
 affixed thereto or  printed, engraved  or otherwise  reproduced thereon,  by
 facsimile  or  otherwise,   and  which  need  not  be  attested.  Only  such
 Debt  Securities  as  shall bear thereon  a  certificate  of  authentication
 substantially in the form herein before recited, executed by the Trustee  or
 the Authenticating Agent by the manual  signature of an authorized  officer,
 shall be  entitled  to  the  benefits  of this  Indenture  or  be  valid  or
 obligatory  for  any  purpose.  Such  certificate  by  the  Trustee  or  the
 Authenticating Agent upon any Debt Security executed by the Company shall be
 conclusive evidence that the  Debt Security so  authenticated has been  duly
 authenticated and delivered hereunder and that the holder is entitled to the
 benefits of this Indenture.

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

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

    SECTION  2.05.  Exchange and Registration of Transfer of Debt Securities.
                    ---------------------------------------------------------
           The Company  shall cause  to  be kept,  at  the office  or  agency
 maintained for the purpose of registration  of transfer and for exchange  as
 provided in Section 3.02, a register (the "Debt Security Register") for  the
 Debt Securities  issued  hereunder  in which,  subject  to  such  reasonable
 regulations  as  it  may  prescribe,  the  Company  shall  provide  for  the
 registration and transfer of all Debt Securities as provided in this Article
 II. Such register shall be in written form  or in any other form capable  of
 being converted into written form within a reasonable time.

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

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

            Neither the  Trustee  nor the  Debt  Security Registrar  shall be
 responsible for ascertaining  whether any transfer  hereunder complies  with
 the registration provisions  of or any  exemptions from  the Securities  Act
 (under and as defined in the Declaration), applicable state securities  laws
 or the applicable laws of any  other jurisdiction, ERISA, the United  States
 Internal Revenue Code  of 1986, as  amended, or the  Investment Company  Act
 (under and as defined in the Declaration).

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

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

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

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
 OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST  OR
 PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
 ENCUMBERED OR OTHERWISE DISPOSED OF IN  THE ABSENCE OF SUCH REGISTRATION  OR
 UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE  REGISTRATION
 REQUIREMENTS OF  THE SECURITIES  ACT. THE  HOLDER OF  THIS SECURITY  BY  ITS
 ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH  SECURITY
 PRIOR TO THE  DATE WHICH  IS THE LATER  OF (i)  TWO YEARS  (OR SUCH  SHORTER
 PERIOD OF TIME AS PERMITTED BY RULE 144(k)  UNDER THE SECURITIES ACT)  AFTER
 THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST  DATE
 ON WHICH THE  COMPANY OR ANY  AFFILIATE (AS DEFINED  IN RULE  405 UNDER  THE
 SECURITIES ACT)  OF THE  COMPANY WAS  THE HOLDER  OF THIS  SECURITY OR  SUCH
 INTEREST OR PARTICIPATION (OR ANY PREDECESSOR  THERETO) AND (ii) SUCH  LATER
 DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW,
 ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES  ACT
 ("RULE 144A"), TO A  PERSON THE HOLDER REASONABLY  BELIEVES IS A  "QUALIFIED
 INSTITUTIONAL BUYER" AS  DEFINED IN  RULE 144A  THAT PURCHASES  FOR ITS  OWN
 ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
 IS GIVEN THAT  THE TRANSFER  IS BEING  MADE IN  RELIANCE ON  RULE 144A,  (C)
 PURSUANT  TO  AN  EXEMPTION  FROM  THE  REGISTRATION  REQUIREMENTS  OF   THE
 SECURITIES  ACT  TO   AN  "ACCREDITED  INVESTOR"   WITHIN  THE  MEANING   OF
 SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501 UNDER THE  SECURITIES
 ACT THAT IS ACQUIRING THE SECURITY FOR  ITS OWN ACCOUNT, OR FOR THE  ACCOUNT
 OF AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO,
 OR FOR OFFER OR  SALE IN CONNECTION WITH,  ANY DISTRIBUTION IN VIOLATION  OF
 THE SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS  THAT
 OCCUR  OUTSIDE  THE  UNITED  STATES  PURSUANT  TO  REGULATION  S  UNDER  THE
 SECURITIES ACT  OR (E)  PURSUANT TO  ANOTHER  AVAILABLE EXEMPTION  FROM  THE
 REGISTRATION REQUIREMENTS OF  THE SECURITIES ACT,  SUBJECT TO THE  COMPANY'S
 RIGHT PRIOR TO ANY SUCH OFFER, SALE  OR TRANSFER PURSUANT TO CLAUSES (C)  OR
 (D) TO REQUIRE THE DELIVERY OF  AN OPINION OF COUNSEL, CERTIFICATION  AND/OR
 OTHER INFORMATION SATISFACTORY  TO IT IN  ACCORDANCE WITH  THE INDENTURE,  A
 COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS  SECURITY
 BY ITS  ACCEPTANCE HEREOF  AGREES THAT  IT WILL  COMPLY WITH  THE  FOREGOING
 RESTRICTIONS.

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

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

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

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

    SECTION 2.06.  Mutilated, Destroyed, Lost or Stolen Debt Securities.
                   -----------------------------------------------------
            In case any Debt Security shall become mutilated or be destroyed,
 lost or stolen, the  Company shall execute, and,  upon its written  request,
 the Trustee shall authenticate  and deliver, a new  Debt Security bearing  a
 number not contemporaneously outstanding,  in exchange and substitution  for
 the mutilated Debt Security or in lieu  of and in substitution for the  Debt
 Security so destroyed,  lost or stolen.  In every case  the applicant for  a
 substituted Debt Security shall furnish to the Company and the Trustee  such
 security or  indemnity as  may be  required by  them to  save each  of  them
 harmless, and, in every  case of destruction, loss  or theft, the  applicant
 shall also  furnish  to  the  Company and  the  Trustee  evidence  to  their
 satisfaction of the destruction, loss or theft of such Debt Security and  of
 the ownership thereof.

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

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

    SECTION 2.07.  Temporary Debt Securities.
                   --------------------------
           Pending the preparation of definitive Debt Securities, the Company
 may execute,  and the  Trustee shall  authenticate  and make  available  for
 delivery, temporary Debt Securities that are typed, printed or lithographed.
 Temporary Debt Securities, shall be issuable in any authorized denomination,
 and substantially in the  form of the definitive  Debt Securities, but  with
 such  omissions,  insertions  and  variations  as  may  be  appropriate  for
 temporary Debt Securities, all  as may be determined  by the Company.  Every
 such temporary  Debt  Security shall  be  executed  by the  Company  and  be
 authenticated by the Trustee upon the  same conditions and in  substantially
 the  same  manner,  and  with  the  same  effect,  as  the  definitive  Debt
 Securities. Without unreasonable delay, the Company will execute and deliver
 to the Trustee or the Authenticating  Agent definitive Debt Securities  and,
 thereupon, any  or  all temporary  Debt  Securities may  be  surrendered  in
 exchange therefor, at the Principal Office  of the Trustee or at any  office
 or agency maintained by the Company for such purpose as provided in  Section
 3.02, and the  Trustee or the  Authenticating Agent  shall authenticate  and
 make available for delivery in exchange for such temporary Debt Securities a
 like aggregate principal  amount of  such definitive  Debt Securities.  Such
 exchange shall be made  by the Company  at its own  expense and without  any
 charge therefor  except  that in  case  of  any such  exchange  involving  a
 registration  of  transfer,  the  Company  may  require  payment  of  a  sum
 sufficient to cover any  tax, fee or other  governmental charge that may  be
 imposed  in  relation  thereto.  Until  so  exchanged,  the  temporary  Debt
 Securities shall in all respects be entitled to the same benefits under this
 Indenture  as  definitive  Debt   Securities  authenticated  and   delivered
 hereunder.

    SECTION 2.08.  Payment of Interest.
                   --------------------
           During the  Fixed  Rate  Period,  each  Debt  Security  will  bear
 interest at  the Fixed  Rate.   Thereafter,  each  Debt Security  will  bear
 interest at the then applicable Variable Rate.  Interest shall accrue at the
 Interest Rate  defined to  include  the Fixed  Rate  and Variable  Rate  (as
 applicable), from and including each Interest  Payment Date or, in the  case
 of the first  Interest Period, the  original date of  issuance of such  Debt
 Security to, but excluding, the next succeeding Interest Payment Date or, in
 the  case  of  the  last  Interest  Period,  the  Redemption  Date,  Special
 Redemption Date or Maturity Date, as applicable, (each an "Interest Period")
 on the principal thereof, on any  overdue principal and (to the extent  that
 payment of such interest  is enforceable under  applicable law) on  Deferred
 Interest and on  any overdue  installment of  interest (including  Defaulted
 Interest), payable  (subject  to  the provisions  of  Article  XV)  on  each
 Interest Payment Date  commencing on  September 15, 2005.  Interest and  any
 Deferred Interest on any  Debt Security that is  payable, and is  punctually
 paid or duly provided for by the Company, on any Interest Payment Date shall
 be paid to  the Person  in whose name  said Debt  Security (or  one or  more
 Predecessor Securities)  is  registered at  the  close of  business  on  the
 regular record date for such Interest  Period, except that interest and  any
 Deferred Interest  payable on  the Maturity  Date,  any Redemption  Date  or
 Special Redemption Date, as the case may be, shall be paid to the Person  to
 whom principal is paid. In case (i)  the Maturity Date of any Debt  Security
 or (ii) any Debt  Security or portion thereof  is called for redemption  and
 the redemption date is subsequent to  a regular record date with respect  to
 any Interest Payment Date  and either on or  prior to such Interest  Payment
 Date, interest on  such Debt  Security will  be paid  upon presentation  and
 surrender of such Debt Security.

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

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

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

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

    SECTION  2.09.  Cancellation of Debt Securities Paid, etc.
                    ------------------------------------------
           All Debt  Securities  surrendered  for  the  purpose  of  payment,
 redemption, exchange or registration of  transfer, shall, if surrendered  to
 the Company or any Paying Agent, be surrendered to the Trustee and  promptly
 canceled by it or, if surrendered to the Trustee, shall be promptly canceled
 by it, and  no Debt Securities  shall be issued  in lieu  thereof except  as
 expressly permitted by any of the provisions of this Indenture. The  Trustee
 shall dispose  of  all  canceled Debt  Securities  in  accordance  with  its
 customary practices  unless the  Company otherwise  directs the  Trustee  in
 writing, in which case the Trustee shall dispose of such Debt Securities  as
 directed by  the Company.  If the  Company  shall acquire  any of  the  Debt
 Securities, however, such acquisition shall not  operate as a redemption  or
 satisfaction of the indebtedness represented by such Debt Securities  unless
 and until the same are surrendered to the Trustee for cancellation.

    SECTION 2.10.  Computation of Interest
                   -----------------------
           (a) From  the date  hereof until  June 15,  2015 (the  "Fixed Rate
 Period"), the interest shall be computed on  the basis of a 360-day year  of
 twelve 30-day months and the amount payable for any partial period shall  be
 computed on the basis  of the number of  days elapsed in  a 360-day year  of
 twelve 30-day months.  Upon expiration of the Fixed Rate Period, the  amount
 of interest payable for any Interest Period will be computed on the basis of
 a 360-day  year  and the  actual  number of  days  elapsed in  the  relevant
 interest period; provided, however,  that upon the  occurrence of a  Special
 Event Redemption pursuant to Section 10.02,  the amount payable pursuant  to
 this Indenture shall be calculated as set forth in the definition of Special
 Redemption Price.

           (b) Upon  expiration  of the  Fixed  Rate Period,  LIBOR,  for any
 Interest Period, shall be determined by the Calculation Agent in  accordance
 with the following provisions:

                (1) On the  second LIBOR Business Day (provided, that on such
           day commercial banks are open for business (including dealings  in
           foreign currency deposits) in London (a "LIBOR Banking Day"),  and
           otherwise the next  preceding LIBOR Business  Day that  is also  a
           LIBOR Banking Day) prior  to March 15, June  15, September 15  and
           December 15 (except, with respect to the first Interest Period, on
           June 15,  2015) (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 Page  3750 (as  defined in  the International  Swaps  and
           Derivatives Association,  Inc.  2000 Interest  Rate  and  Currency
           Exchange Definitions) or such other page as may replace such  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 such LIBOR Determination  Date,
           the corrected rate as so substituted will be LIBOR for such  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
           Determination Date,  only  one  or none  of  the  Reference  Banks
           provide such  a  quotation,  LIBOR  shall  be  deemed  to  be  the
           arithmetic mean  of  the  offered quotations  that  at  least  two
           leading banks  in  the  City  of New  York  (as  selected  by  the
           Calculation Agent) are quoting on the relevant LIBOR Determination
           Date  for   three-month  U.S.   Dollar  deposits   in  Europe   at
           approximately 11:00 a.m. (London time) (in an amount determined by
           the Calculation Agent).  As used herein,  "Reference Banks"  means
           four major banks in  the London interbank  market selected by  the
           Calculation Agent.

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

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

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

    SECTION 2.11. Extension of Interest Period.
                  -----------------------------
           So long as no Event of Default has occurred and is continuing, the
 Company shall have the right, from time to time and without causing an Event
 of Default,  to  defer  payments  of interest  on  the  Debt  Securities  by
 extending the Interest Period  on the Debt Securities  at any time and  from
 time to  time during  the term  of the  Debt Securities,  for up  to  twenty
 consecutive quarterly periods (each such extended Interest Period,  together
 with all previous and further consecutive extensions thereof, is referred to
 herein as an "Extension Period"), during which Extension Period no  interest
 shall be due and payable (except any Additional Interest that may be due and
 payable). No  Extension Period  may end  on a  date other  than an  Interest
 Payment Date or extend beyond the Maturity Date, any Redemption Date or  the
 Special Redemption Date, as  the case may be.  During any Extension  Period,
 interest will continue  to accrue on  the Debt Securities,  and interest  on
 such accrued interest (such accrued  interest and interest thereon  referred
 to herein as "Deferred Interest") will accrue at an annual rate equal to the
 Interest Rate in effect for such Extension Period, compounded quarterly from
 the date such Deferred Interest would have been payable were it not for  the
 Extension Period, to the  extent permitted by law.  No interest or  Deferred
 Interest (except any Additional Interest that may be due and payable)  shall
 be due and payable during an Extension Period, except at the end thereof. At
 the end of  any such  Extension Period the  Company shall  pay all  Deferred
 Interest then accrued and unpaid on the Debt Securities; provided,  however,
 that during any such Extension Period,  the Company shall be subject to  the
 restrictions set  forth in  Section 3.08  of this  Indenture. Prior  to  the
 termination of any  Extension Period, the  Company may  further extend  such
 Extension Period; provided, that no Extension Period (including all previous
 and further consecutive extensions that are  part of such Extension  Period)
 shall exceed  twenty consecutive  quarterly periods,  or extend  beyond  the
 Maturity Date. Upon  the termination of  any Extension Period  and upon  the
 payment of all Deferred Interest, the  Company may commence a new  Extension
 Period, subject to  the foregoing requirements.  The Company  must give  the
 Trustee notice of its election to begin such Extension Period ("Notice") not
 later than the related regular record date for the next succeeding  Interest
 Payment Date.  The Notice  shall describe,  in  reasonable detail,  why  the
 Company  has  elected  to  begin  an  Extension  Period.  The  Notice  shall
 acknowledge and affirm  the  Company's  understanding that it is  prohibited
 from issuing dividends and other distributions during the Extension  Period.
 Upon receipt of the Notice, the Placement  Agent has the right, at its  sole
 discretion, to disclose the name of  the Company, the fact that the  Company
 has elected to  begin an  Extension Period  and other  information that  the
 Placement Agent, at  its sole discretion,  deems relevant  to the  Company's
 election to begin an Extension Period.  The Trustee shall give notice of the
 Company's election to begin a new Extension Period to the Securityholders.

    SECTION 2.12.  CUSIP Numbers.
                   --------------
            The Company  in issuing  the Debt  Securities  may use  a "CUSIP"
 number (if then  generally in  use), and,  if so,  the Trustee  shall use  a
 "CUSIP" number in notices of redemption as a convenience to Securityholders;
 provided, that any such notice may  state that no representation is made  as
 to the correctness of such number  either as printed on the Debt  Securities
 or as contained  in any  notice of  a redemption  and that  reliance may  be
 placed only  on  the  other  identification  numbers  printed  on  the  Debt
 Securities, and any such redemption shall  not be affected by any defect  in
 or omission of such numbers. The Company will promptly notify the Trustee in
 writing of any change in the CUSIP number.

                                 ARTICLE III

                     PARTICULAR COVENANTS OF THE COMPANY

    SECTION 3.01.  Payment of Principal, Premium and Interest; Agreed
                   --------------------------------------------------
 Treatment of the Debt Securities.
 ---------------------------------
           (a) The  Company  covenants  and  agrees  that  it  will  duly and
 punctually pay, or cause to be paid, all payments due on the Debt Securities
 at the place, at  the respective times  and in the  manner provided in  this
 Indenture and  the Debt  Securities.  At the  option  of the  Company,  each
 installment of interest on  the Debt Securities may  be paid (i) by  mailing
 checks for  such  interest payable  to  the order  of  the holders  of  Debt
 Securities entitled thereto as they appear on the Debt Security Register  or
 (ii) by wire transfer of immediately  available funds to any account with  a
 banking institution located in the United States designated by such  holders
 to the Paying Agent no later than the related  record date.  Notwithstanding
 anything to the contrary contained in  this Indenture or any Debt  Security,
 if the Trust or the Trustee of the Trust is the holder of any Debt Security,
 then all payments  in respect of  such Debt Security  shall be  made by  the
 Company in immediately available funds when due.

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

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

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

    SECTION 3.02.  Offices for Notices and Payments, etc.
                   --------------------------------------
           So long  as any  of the  Debt Securities  remain outstanding,  the
 Company will maintain in New  York, New York an  office or agency  where the
 Debt Securities may be presented for payment, an office or agency where  the
 Debt Securities  may  be presented  for  registration of  transfer  and  for
 exchange as provided in this Indenture and an office or agency where notices
 and demands to or upon the Company in  respect of the Debt Securities or  of
 this Indenture may be served. The Company hereby appoints the Trustee at ITS
 Unit Trust Window, 4 New York Plaza, Ground Floor, New York, New York 10004,
 attention: ITS  (Houston)  Hallmark Statutory  Trust  I as  such  office  or
 agency. In case the Company shall fail to maintain any such office or agency
 in New York, New York or shall fail to  give such notice of the location  or
 of any change in the location thereof, presentations and demands may be made
 and notices may be served at the Principal Office of the Trustee.

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

    SECTION 3.03.  Appointments to Fill Vacancies in Trustee's Office.
                   ---------------------------------------------------
           The Company, whenever necessary to avoid or fill a vacancy in  the
 office of Trustee, will appoint, in  the manner provided in Section 6.09,  a
 Trustee, so that there shall at all times be a Trustee hereunder.

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

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

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

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

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

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

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

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

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

    SECTION 3.05.  Certificate to Trustee.
                   -----------------------
           The Company will  deliver to  the Trustee  on or  before 120  days
 after the  end  of  each  fiscal  year,  so  long  as  Debt  Securities  are
 outstanding hereunder,  a Certificate  stating that  in  the course  of  the
 performance by the signers of their  duties as officers of the Company  they
 would normally  have  knowledge  of  any  default  by  the  Company  in  the
 performance of  any  covenants  of the  Company  contained  herein,  stating
 whether or  not  they  have  knowledge  of any  such  default  and,  if  so,
 specifying each such  default of which  the signers have  knowledge and  the
 nature thereof.

    SECTION 3.06.  Additional Interest.
                   --------------------
           If and  for  so long  as  the Trust  is  the holder  of  all  Debt
 Securities and is subject to or otherwise required to pay, or is required to
 withhold from distributions to holders  of Trust Securities, any  additional
 taxes  (including   withholding  taxes),   duties,  assessments   or   other
 governmental charges as a result of a  Tax Event, the Company will pay  such
 additional amounts (the  "Additional Interest")  on the  Debt Securities  as
 shall  be  required  so that  the  net  amounts received and retained by the
 Trust for distribution  to  holders  of Trust  Securities  after paying  all
 taxes (including  withholding  taxes on distributions  to holders  of  Trust
 Securities), duties, assessments or other governmental charges will be equal
 to the amounts the Trust would  have received and retained for  distribution
 to holders of Trust Securities after paying all taxes (including withholding
 taxes on distributions to holders of Trust Securities), duties,  assessments
 or  other  governmental  charges  if  no  such  additional  taxes,   duties,
 assessments or other governmental charges had been imposed.

            Whenever in  this Indenture  or the  Debt  Securities there  is a
 reference in any context to the payment of principal of, or premium, if any,
 or interest on the Debt Securities, such mention shall be deemed to  include
 mention of payments of the Additional Interest provided for in this  Section
 to the extent that, in such context, Additional Interest is, was or would be
 payable in respect thereof  pursuant to the provisions  of this Section  and
 express mention of the payment of Additional Interest (if applicable) in any
 provisions hereof shall not be construed as excluding Additional Interest in
 those provisions hereof where  such express mention  is not made;  provided,
 however, that, notwithstanding  anything to the  contrary contained in  this
 Indenture or any  Debt Security,  the deferral  of the  payment of  interest
 during an Extension  Period pursuant  to Section  2.11 shall  not defer  the
 payment of any Additional Interest that may be due and payable.

    SECTION 3.07.  Compliance with Consolidation Provisions.
                   -----------------------------------------
           The Company  will not,  while any  of the  Debt Securities  remain
 outstanding, consolidate with, or merge into any other Person, or merge into
 itself, or  sell or  convey all  or  substantially all  of its  property  or
 capital stock to any other Person unless the provisions of Article XI hereof
 are complied with.

    SECTION 3.08.  Limitation on Dividends.
                   ------------------------
           If Debt Securities are initially issued to the Trust or a  trustee
 of such Trust  in connection with  the issuance of  Trust Securities by  the
 Trust (regardless of  whether Debt Securities  continue to be  held by  such
 Trust) and  (i) there  shall have  occurred and  be continuing  an Event  of
 Default, (ii) the Company shall be in default with respect to its payment of
 any obligations under the Capital Securities Guarantee or (iii) the  Company
 shall have given notice of its election to defer payments of interest on the
 Debt Securities by extending the Interest Period as provided herein and such
 period, or any extension  thereof, shall have  commenced and be  continuing,
 then the Company may not (A)  declare or pay any dividends or  distributions
 on, or redeem, purchase, acquire, or make a liquidation payment with respect
 to, any of the Company's capital stock, (B) make any payment of principal of
 or interest or premium, if any, on  or repay, repurchase or redeem any  debt
 securities of  the Company  that rank  pari passu  in all  respects with  or
 junior in interest to the Debt Securities or (C) make any payment under  any
 guarantees of  the Company  that rank  in all  respects pari  passu with  or
 junior in  interest to  the Capital  Securities  Guarantee (other  than  (a)
 repurchases, redemptions or other acquisitions of shares of capital stock of
 the Company (I) in connection with any employment contract, benefit plan  or
 other similar arrangement with or for the benefit of one or more  employees,
 officers, directors  or  consultants, (II)  in  connection with  a  dividend
 reinvestment or stockholder stock purchase plan or (III) in connection  with
 the issuance of capital stock of the Company (or securities convertible into
 or exercisable for such capital stock),  as consideration in an  acquisition
 transaction entered  into prior  to the  occurrence of  (i), (ii)  or  (iii)
 above, (b) as  a result of  any exchange,  reclassification, combination  or
 conversion of any  class or series  of the Company's  capital stock (or  any
 capital stock of a subsidiary of the Company) for any class or series of the
 Company's capital  stock  or  of  any  class  or  series  of  the  Company's
 indebtedness for any class or series of the Company's capital stock, (c) the
 purchase of fractional interests  in shares of  the Company's capital  stock
 pursuant to the conversion or exchange  provisions of such capital stock  or
 the security being converted or exchanged, (d) any declaration of a dividend
 in connection with any stockholder's rights plan, or the issuance of rights,
 stock or  other  property  under  any  stockholder's  rights  plan,  or  the
 redemption or repurchase of rights pursuant thereto, or (e) any dividend  in
 the form of  stock, warrants,  options or  other rights  where the  dividend
 stock or the stock issuable upon exercise of such warrants, options or other
 rights is the  same stock as  that on which  the dividend is  being paid  or
 ranks pari passu with or junior to such stock).

    SECTION 3.09.  Covenants as to the Trust.
                   --------------------------
           For so  long  as such  Trust  Securities remain  outstanding,  the
 Company shall maintain  100% ownership of  the Common Securities;  provided,
 however, that any permitted  successor of the  Company under this  Indenture
 that is a U.S. Person may succeed to the Company's ownership of such  Common
 Securities. The  Company,  as owner  of  the Common  Securities,  shall  use
 commercially reasonable efforts to cause the Trust (a) to remain a statutory
 trust, except in connection  with a distribution of  Debt Securities to  the
 holders  of  Trust  Securities  in liquidation  of the Trust, the redemption
 of all  of the  Trust  Securities  or  certain  mergers,  consolidations  or
 amalgamations, each  as  permitted  by the  Declaration,  (b)  to  otherwise
 continue to  be classified  as a  grantor trust  for United  States  federal
 income tax purposes and (c) to cause  each holder of Trust Securities to  be
 treated as owning an undivided beneficial interest in the Debt Securities.

    SECTION 3.10.  Make-whole Provision.
                   ---------------------
            If the Company  repurchases the Debt  Securities between June 15,
 2010 (the "Call Date") and June 15, 2015, the Company hereby unconditionally
 agrees to repurchase the Debt Securities  at a price equal to the  aggregate
 amount of Debt Securities  Outstanding plus the  difference between the  10-
 year swap rate entered into June 21, 2005 ("Initial Swap Rate") and the swap
 rate as  of  the  repurchase  date for  the  period  remaining  between  the
 repurchase date and June 15, 2015  ("Determining Swap Rate"), calculated  as
 follows (the "Purchase Price"):

         If at the  time the  Debt Securities are  repurchased by
         the Company, the  Determining Swap Rate  is greater than
         the Initial  Swap  Rate, then  the  Purchase  Price will
         equal  the  aggregate amount  of  Debt  Securities  then
         Outstanding.    If  at  the   time  of  repurchase,  the
         Determining Swap  Rate is  lower  than the  Initial Swap
         Rate,  then  the  Purchase  Price  will  equal  (1)  the
         aggregate amount  of  Debt  Securities then  Outstanding
         plus (2) (a) the Initial  Swap Rate less the Determining
         Swap  Rate  (b)  multiplied  by   the  number  of  years
         (including partial  years) from  the date  of repurchase
         until the end of the  Fixed Rate Period discounted based
         on  the  1  year  Treasury  Rate  at  the  time  of  the
         repurchase  (c)  times  the  aggregate  amount  of  Debt
         Securities then Outstanding.

         For example: Assuming  (i) the  period from the  date of
         repurchase to  the end  of the  Fixed  Rate Period  is 2
         years, (ii)  the  Initial  Swap Rate  is  6%,  (iii) the
         Determining Swap  Rate  is  5.5%, (iv)  and  the  1 year
         Treasury Rate is 4%, then the Purchase Price would equal
         $31,213,947, which includes  a premium of  $285,947 (.9%
         of  the  aggregate   amount  of  Debt   Securities  then
         Outstanding).

                                 ARTICLE IV

               LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

    SECTION 4.01.  Securityholders' Lists.
                   -----------------------
           The Company covenants and agrees that it will furnish or cause  to
 be furnished to the Trustee:

           (a) on  each regular record  date for an  Interest Payment Date, a
 list, in such form as the Trustee  may reasonably require, of the names  and
 addresses of the Securityholders  of the Debt Securities  as of such  record
 date, except that no such lists need be furnished under this Section 4.01 so
 long as the Trustee is in possession thereof by reason of its acting as Debt
 Security registrar; and

           (b) at  such other  times as the  Trustee may  request in writing,
 within 30 days after the receipt by the Company of any such request, a  list
 of similar form and content as of a date not more than 15 days prior to  the
 time such list  is furnished, except  that no such  lists need be  furnished
 under this Section 4.01 so long as  the Trustee is in possession thereof  by
 reason of its acting as Debt Security registrar.

    SECTION 4.02.  Preservation and Disclosure of Lists.
                   -------------------------------------
           (a) The  Trustee  shall  preserve,  in as  current  a  form  as is
 reasonably practicable, all information as to the names and addresses of the
 holders of Debt Securities (1) contained  in the most recent list  furnished
 to it as provided in Section 4.01 or (2)  received by it in the capacity  of
 Debt Securities registrar (if so acting) hereunder. The Trustee may  destroy
 any list furnished to it as provided in  Section 4.01 upon receipt of a  new
 list so furnished.

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

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

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

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

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

    SECTION 4.03.  Financial and Other Information.
                   --------------------------------
           (a) The  Company shall deliver to  each holder of Debt Securities:
 (1) within 45 days after the end of each quarterly fiscal period other  than
 year  end,  unaudited  consolidated  financial  statements  of  the  Company
 (including balance sheet and income statement) covering such period; and (2)
 within the earlier of (y) 90 days after the end of each fiscal year and  (z)
 such earlier  number  of days  prescribed  by the  Securities  and  Exchange
 Commission for the filing with it of a Form 10-K by companies subject to the
 informational reporting  requirements  of  the  Exchange  Act,  (i)  audited
 consolidated financial statements  of the Company  (including balance  sheet
 and income statement)  covering such fiscal  year, and (ii)  in the case  of
 (a)(2), the  report of  the independent  accountants  with respect  to  such
 financial statements; (3) within 7 days after the filing thereof, each  Form
 10-K and  Form 10-Q  that is  prepared and  filed by  the Company  with  the
 Securities and Exchange Commission in accordance  with the Exchange Act,  if
 any; (4) if the Company is  not then (y) subject to  Section 13 or 15(d)  of
 the Exchange Act  or (z) exempt  from reporting pursuant  to Rule  12g3-2(b)
 thereunder, the information required to be provided by Rule 144A(d)(4) under
 the Securities  Act  unless all  of  such information  has  been  previously
 delivered to holders of the Debt Securities under clause (1) and (2)  above;
 and (5) within 30 days after the end of the fiscal year of the Company, Form
 1099 or  such other  annual U.S.  federal income  tax information  statement
 required by the  Code containing such  information with regard  to the  Debt
 Securities held by such holder as is required by the Code and the income tax
 regulations of the U.S. Treasury thereunder; provided, however, that so long
 as the Company files  the information required  by this Section  4.03(a)(1),
 (2) and  (3)  with the  Commission,  the Company's  obligations  under  this
 Section 4.03(a)(1), (2) and (3) shall be deemed to be complied with.

           (b) The  Company   will  cause  copies  of  the  annual  financial
 statements of  the  Company  and/or  Affiliates  that  are  filed  with  the
 insurance regulator in each  jurisdiction in which the  Company or any  such
 Affiliate is  incorporated  to  be  delivered to  the  holder  of  the  Debt
 Securities promptly following their filing.

                                  ARTICLE V

     REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT

    SECTION 5.01.  Events of Default.
                   ------------------
           The following events shall be  "Events of Default" with respect to
 Debt Securities:

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

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

           (c) the  Company defaults in the  performance of, or breaches, any
 of its covenants or agreements in Sections 3.06, 3.07, 3.08 or 3.09 of  this
 Indenture (other than a covenant or agreement a default in whose performance
 or whose breach is elsewhere in  this Section specifically dealt with),  and
 continuance of such default or  breach for a period  of 90 days after  there
 has been  given, by  registered or  certified mail,  to the  Company by  the
 Trustee or to the Company and  the Trustee by the  holders of not less  than
 25% in  aggregate principal  amount of  the outstanding  Debt Securities,  a
 written notice specifying  such default  or breach  and requiring  it to  be
 remedied and stating that such notice is a "Notice of Default' hereunder; or

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

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

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

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

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

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

    SECTION 5.02.  Payment of Debt Securities on Default; Suit Therefor.
                   -----------------------------------------------------
           The Company  covenants that  upon the  occurrence of  an Event  of
 Default pursuant  to  clause 5.01(a)  or  5.01(b)  and upon  demand  of  the
 Trustee, the Company will pay to the Trustee, for the benefit of the holders
 of the Debt Securities, the whole amount that then shall have become due and
 payable on all Debt  Securities including Deferred  Interest accrued on  the
 Debt Securities; and, in addition thereto,  such further amount as shall  be
 sufficient to  cover  the costs  and  expenses of  collection,  including  a
 reasonable compensation to the Trustee,  its agents, attorneys and  counsel,
 and any other amounts  due to the  Trustee under Section  6.06. In case  the
 Company shall  fail forthwith  to pay  such amounts  upon such  demand,  the
 Trustee, in  its own  name and  as trustee  of an  express trust,  shall  be
 entitled and empowered to institute any actions or proceedings at law or  in
 equity for the collection of the sums  so due and unpaid, and may  prosecute
 any such action or proceeding to  judgment or final decree, and may  enforce
 any such judgment or final decree  against the Company or any other  obligor
 on such Debt Securities and collect in the manner provided by law out of the
 property of  the  Company or  any  other  obligor on  such  Debt  Securities
 wherever situated the moneys adjudged or decreed to be payable.

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

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

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

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

    SECTION 5.03.  Application of Moneys Collected by Trustee.
                   -------------------------------------------
           Any moneys  collected  by the  Trustee  shall be  applied  in  the
 following order,  at  the  date  or  dates fixed  by  the  Trustee  for  the
 distribution  of  such  moneys,  upon  presentation  of  the  several   Debt
 Securities in  respect of  which moneys  have been  collected, and  stamping
 thereon the payment, if only partially  paid, and upon surrender thereof  if
 fully paid:

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

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

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

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

    SECTION 5.04.  Proceedings by Securityholders.
                   -------------------------------
           No holder of any Debt Security  shall have any right to  institute
 any suit, action or proceeding for any remedy hereunder, unless such  holder
 previously shall have  given to the  Trustee written notice  of an Event  of
 Default with respect to  the Debt Securities and  unless the holders of  not
 less than 25%  in aggregate  principal amount  of the  Debt Securities  then
 outstanding shall have given the Trustee a written request to institute such
 action, suit  or proceeding  and  shall have  offered  to the  Trustee  such
 reasonable indemnity  as it  may require  against  the costs,  expenses  and
 liabilities to be incurred  thereby, and the Trustee  for 60 days after  its
 receipt of such notice, request and offer of indemnity shall have failed  to
 institute any such action, suit or  proceeding; provided, that no holder  of
 Debt Securities shall have  any right to prejudice  the rights of any  other
 holder of Debt Securities, obtain priority or preference over any other such
 holder or enforce any right under this Indenture except in the manner herein
 provided and for  the equal, ratable  and common benefit  of all holders  of
 Debt Securities.

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

    SECTION 5.05.  Proceedings by Trustee.
                   -----------------------
           In case of an Event of  Default hereunder the Trustee may, in  its
 discretion, proceed to protect and enforce  the rights vested in it by  this
 Indenture by such appropriate judicial proceedings as the Trustee shall deem
 most effectual to protect and enforce any of such rights, either by suit  in
 equity or by  action at  law or by  proceeding in  bankruptcy or  otherwise,
 whether for the specific enforcement of any covenant or agreement  contained
 in this Indenture or  in aid of the  exercise of any  power granted in  this
 Indenture, or to enforce  any other legal or  equitable right vested in  the
 Trustee by this Indenture or by law.

    SECTION 5.06.  Remedies Cumulative and Continuing.
                   -----------------------------------
           Except as  otherwise  provided in  Section  2.06, all  powers  and
 remedies given by this  Article V to the  Trustee or to the  Securityholders
 shall, to  the  extent  permitted  by law,  be  deemed  cumulative  and  not
 exclusive of any other powers and  remedies available to the Trustee or  the
 holders of the  Debt Securities, by  judicial proceedings  or otherwise,  to
 enforce the  performance  or  observance of  the  covenants  and  agreements
 contained in this  Indenture or otherwise  established with  respect to  the
 Debt Securities, and no delay or omission of the Trustee or of any holder of
 any of the Debt Securities to exercise any right or power accruing upon  any
 Event of Default occurring and continuing as aforesaid shall impair any such
 right or power, or shall be construed to be a waiver of any such default  or
 an acquiescence therein;  and, subject to  the provisions  of Section  5.04,
 every power and remedy given by this Article V  or by law to the Trustee  or
 to the Securityholders may be exercised from  time to time, and as often  as
 shall be deemed expedient, by the Trustee or by the Securityholders.

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

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

    SECTION 5.09.  Undertaking to Pay Costs.
                   -------------------------
           All parties to this Indenture agree,  and each holder of any  Debt
 Security by such holder's acceptance thereof shall be deemed to have agreed,
 that any  court  may  in  its  discretion  require,  in  any  suit  for  the
 enforcement of any  right or  remedy under this  Indenture, or  in any  suit
 against the Trustee for any  action taken or omitted  by it as Trustee,  the
 filing by any party litigant in such suit of an undertaking to pay the costs
 of such suit, and  that such court may  in its discretion assess  reasonable
 costs, including reasonable attorneys' fees and expenses, against any  party
 litigant in such suit, having due regard to the merits and good faith of the
 claims or defenses made by such  party litigant; but the provisions of  this
 Section 5.09 shall not apply to any  suit instituted by the Trustee, to  any
 suit instituted by any Securityholder, or group of Securityholders,  holding
 in the aggregate more than 10%  in principal amount of the Outstanding  Debt
 Securities (or, if such Debt Securities are  held by the Trust or a  trustee
 of the Trust, more than 10% in liquidation amount of the outstanding Capital
 Securities), or  to  any  suit instituted  by  any  Securityholder  for  the
 enforcement of  the payment  of the  principal of  (or premium,  if any)  or
 interest on any Debt Security against the Company on or after the same shall
 have become due  and payable or  to any suit  instituted in accordance  with
 Section 14.12.

                                 ARTICLE VI

                            CONCERNING THE TRUSTEE

    SECTION 6.01.  Duties and Responsibilities of Trustee.
                   ---------------------------------------
           With respect to the holders  of Debt Securities issued  hereunder,
 the Trustee, prior to the occurrence of an Event of Default with respect  to
 the Debt Securities and after the curing or waiving of all Events of Default
 which may have occurred, with respect to the Debt Securities, undertakes  to
 perform such duties and  only such duties as  are specifically set forth  in
 this Indenture.  In  case an  Event  of Default  with  respect to  the  Debt
 Securities has occurred  (which has not  been cured or  waived) the  Trustee
 shall exercise such of the rights and powers vested in it by this Indenture,
 and use the same degree of  care and skill in  their exercise, as a  prudent
 person would exercise or use under the circumstances in the conduct of  such
 person's own affairs.

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

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

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

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

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

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

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

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

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

    SECTION 6.02.  Reliance on Documents, Opinions, etc.
                   -------------------------------------
           Except as otherwise provided in Section 6.01:

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

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

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

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

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

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

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

    SECTION 6.03.  No Responsibility for Recitals, etc.
                   ------------------------------------
           The recitals contained herein and  in the Debt Securities  (except
 in the certificate of  authentication of the  Trustee or the  Authenticating
 Agent) shall be taken as the statements of the Company, and the Trustee  and
 the Authenticating Agent assume no responsibility for the correctness of the
 same. The Trustee and the Authenticating Agent make no representations as to
 the validity or sufficiency of this Indenture or of the Debt Securities. The
 Trustee and the Authenticating Agent shall not be accountable for the use or
 application  by  the  Company  of  any  Debt  Securities or  the proceeds of
 any Debt  Securities  authenticated  and  delivered  by the Trustee  or  the
 Authenticating Agent in conformity with the provisions of this Indenture.

    SECTION 6.04.  Trustee, Authenticating Agent, Paying Agents, Transfer
                   ------------------------------------------------------
 Agents or Registrar May Own Debt Securities.
 --------------------------------------------
           The Trustee,  any  Authenticating  Agent, any  Paying  Agent,  any
 transfer agent or  any Debt  Security registrar,  in its  individual or  any
 other capacity, may become the owner or pledgee of Debt Securities with  the
 same rights it  would have  if it  were not  Trustee, Authenticating  Agent,
 Paying Agent, transfer agent or Debt Security registrar.

    SECTION 6.05.  Moneys to be Held in Trust.
                   ---------------------------
           Subject to the provisions of Section 12.04, all moneys received by
 the Trustee  or any  Paying Agent  shall, until  used or  applied as  herein
 provided, be held in trust for the purpose for which they were received, but
 need not be  segregated from other  funds except to  the extent required  by
 law. The  Trustee and  any Paying  Agent  shall be  under no  liability  for
 interest on any money received by it hereunder except as otherwise agreed in
 writing with the Company. So long as no Event of Default shall have occurred
 and be continuing, all interest allowed on any such moneys, if any, shall be
 paid from time to time to the Company upon the written order of the Company,
 signed by the Chairman of the  Board of Directors, the President, the  Chief
 Operating Officer, a Vice President, the Treasurer or an Assistant Treasurer
 of the Company.

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

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

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

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

    SECTION 6.07.  Officers' Certificate as Evidence.
                   ----------------------------------
           Except as otherwise provided in  Sections 6.01 and 6.02,  whenever
 in the administration of the provisions of this Indenture the Trustee  shall
 deem it necessary or desirable that a matter be proved or established  prior
 to taking  or  omitting any  action  hereunder, such  matter  (unless  other
 evidence in respect thereof be herein  specifically prescribed) may, in  the
 absence of negligence, willful  misconduct or bad faith  on the part of  the
 Trustee, be deemed to be conclusively proved and established by an Officers'
 Certificate delivered to the Trustee, and  such certificate, in the  absence
 of negligence, willful misconduct or bad  faith on the part of the  Trustee,
 shall be full warrant to the Trustee for  any action taken or omitted by  it
 under the provisions of this Indenture upon the faith thereof.

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

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

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

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

    SECTION 6.09.  Resignation or Removal of Trustee, Calculation Agent,
                   -----------------------------------------------------
 Paying Agent or Debt Security Registrar.
 ----------------------------------------
           (a) The  Trustee, or any trustee  or trustees hereafter appointed,
 the Calculation Agent, the Paying Agent and any Debt Security registrar  may
 at any  time resign  by giving  written notice  of such  resignation to  the
 Company and by  mailing notice  thereof, at  the Company's  expense, to  the
 holders of the Debt  Securities at their addresses  as they shall appear  on
 the Debt Security Register. Upon receiving  such notice of resignation,  the
 Company  shall  promptly  appoint  a  successor  or  successors  by  written
 instrument, in duplicate, executed by order  of its Board of Directors,  one
 copy of which instrument shall be  delivered to the resigning party and  one
 copy to the successor. If no successor shall have been so appointed and have
 accepted appointment within  30 days  after the  mailing of  such notice  of
 resignation  to  the  affected  Securityholders,  the  resigning  party  may
 petition any  court  of competent  jurisdiction  for the  appointment  of  a
 successor, or any Securityholder who has been  a bona fide holder of a  Debt
 Security or Debt  Securities for  at least six  months may,  subject to  the
 provisions of Section 5.09, on behalf  of himself or herself and all  others
 similarly situated,  petition  any  such court  for  the  appointment  of  a
 successor. Such court may  thereupon, after such notice,  if any, as it  may
 deem proper and prescribe, appoint a successor.

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

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

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

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

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

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

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

    SECTION 6.10. Acceptance by Successor.
                  ------------------------
           Any successor  Trustee, Calculation  Agent, Paying  Agent or  Debt
 Security registrar  appointed as  provided in  Section 6.09  shall  execute,
 acknowledge and deliver to the Company and to its predecessor an  instrument
 accepting such  appointment  hereunder,  and thereupon  the  resignation  or
 removal of the  retiring party shall  become effective  and such  successor,
 without any further act,  deed or conveyance, shall  become vested with  all
 the rights,  powers,  duties  and  obligations  with  respect  to  the  Debt
 Securities of its predecessor hereunder, with  like effect as if  originally
 named herein; but, nevertheless, on the written request of the Company or of
 the successor, the party ceasing to  act shall, upon payment of the  amounts
 then due it pursuant to the provisions of Section 6.06, execute and  deliver
 an instrument transferring to  such successor all the  rights and powers  of
 the party so ceasing to act and  shall duly assign, transfer and deliver  to
 such successor all property and money held by such retiring party hereunder.
 Upon request of any  such successor, the Company  shall execute any and  all
 instruments  in  writing  for  more  fully  and  certainly  vesting  in  and
 confirming to such successor all such  rights and powers. Any party  ceasing
 to act shall, nevertheless, retain a lien upon all property or funds held or
 collected to secure any  amounts then due it  pursuant to the provisions  of
 Section 6.06.

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

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

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

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

    SECTION 6.11. Succession by Merger, etc.
                  --------------------------
           Any Person into which  the Trustee may be  merged or converted  or
 with which it may be consolidated, or any Person resulting from any  merger,
 conversion or consolidation to  which the Trustee shall  be a party, or  any
 Person succeeding  to  all  or substantially  all  of  the  corporate  trust
 business of the  Trustee, shall be  the successor of  the Trustee  hereunder
 without the execution or filing of any paper or any further act on the  part
 of any of the parties hereto; provided, that such Person shall be  otherwise
 eligible and qualified under this Article.

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

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

           Any Person into which  any Authenticating Agent  may be merged  or
 converted or with which it may be consolidated, or any Person resulting from
 any merger, consolidation  or conversion to  which any Authenticating  Agent
 shall be a party, or  any Person succeeding to  all or substantially all  of
 the corporate  trust business  of any  Authenticating  Agent, shall  be  the
 successor of such Authenticating Agent  hereunder, if such successor  Person
 is otherwise  eligible under  this Section  6.12  without the  execution  or
 filing of any paper or any further act on the part of the parties hereto  or
 such Authenticating Agent.

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

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

                                 ARTICLE VII

                        CONCERNING THE SECURITYHOLDERS

    SECTION 7.01.  Action by Securityholders.
                   --------------------------
           Whenever in this Indenture  it is provided that  the holders of  a
 specified percentage in aggregate principal amount of the Debt Securities or
 aggregate liquidation  amount  of Capital  Securities  may take  any  action
 (including the making of  any demand or request,  the giving of any  notice,
 consent or waiver or the taking of any  other action), the fact that at  the
 time of taking any such action the holders of such specified percentage have
 joined therein  may be  evidenced (a)  by any  instrument or  any number  of
 instruments of similar tenor executed by such Securityholders or holders  of
 Capital Securities, as  the case  may be,  in person  or by  agent or  proxy
 appointed in writing, (b) by the  record of such holders of Debt  Securities
 voting in favor thereof at any  meeting of such Securityholders duly  called
 and held  in accordance  with the  provisions  of Article  VIII or  of  such
 holders of Capital Securities  duly called and held  in accordance with  the
 provisions of the Declaration,  (c) by a combination  of such instrument  or
 instruments and any such record of such a meeting of such Securityholders or
 holders of Capital  Securities, as  the case  may be,  or (d)  by any  other
 method the Trustee deems satisfactory.

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

    SECTION 7.02.  Proof of Execution by Securityholders.
                   --------------------------------------
           Subject  to  the  provisions  of  Sections  6.01,  6.02  and 8.05,
 proof of  the  execution  of  any  instrument  by a Securityholder  or  such
 Securityholder's agent or proxy  shall be sufficient  if made in  accordance
 with such  reasonable rules  and regulations  as may  be prescribed  by  the
 Trustee or  in such  manner as  shall be  satisfactory to  the Trustee.  The
 ownership of Debt Securities shall be  proved by the Debt Security  Register
 or by a certificate of the Debt Security registrar. The Trustee may  require
 such additional proof of any matter referred to in this Section as it  shall
 deem necessary.

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

    SECTION 7.03.  Who Are Deemed Absolute Owners.
                   -------------------------------
           Prior to due presentment for registration of transfer of any  Debt
 Security, the Company,  the Trustee,  any Authenticating  Agent, any  Paying
 Agent, any  transfer agent  and any  Debt Security  registrar may  deem  the
 Person in whose name  such Debt Security shall  be registered upon the  Debt
 Security Register to be, and may treat such Person as, the absolute owner of
 such Debt Security (whether or not such Debt Security shall be overdue)  for
 the purpose  of receiving  payment of  or on  account of  the principal  of,
 premium, if  any, and  interest on  such  Debt Security  and for  all  other
 purposes; and none of  the Company, the  Trustee, any Authenticating  Agent,
 any Paying Agent, any transfer agent or any Debt Security registrar shall be
 affected by any notice  to the contrary.  All such payments  so made to  any
 holder for the time being or upon  such holder's order shall be valid,  and,
 to the extent of the sum or sums so paid, effectual to satisfy and discharge
 the liability for moneys payable upon any such Debt Security.

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

    SECTION 7.05.  Revocation of Consents; Future Holders Bound.
                   ---------------------------------------------
           At any  time  prior to  (but  not  after) the  evidencing  to  the
 Trustee, as provided in  Section 7.01, of  the taking of  any action by  the
 holders of  the  percentage  in  aggregate  principal  amount  of  the  Debt
 Securities specified in this Indenture in  connection with such action,  any
 holder (in cases where no record date has been set pursuant to Section 7.01)
 or any holder as of an applicable record date (in cases where a record  date
 has been set  pursuant to  Section 7.01)  of a  Debt Security  (or any  Debt
 Security issued in whole  or in part in  exchange or substitution  therefor)
 the serial number or number of which is shown by the evidence to be included
 in the Debt Securities  the holders of which  have consented to such  action
 may, by filing written  notice with the Trustee  at the Principal Office  of
 the Trustee and upon  proof of holding as  provided in Section 7.02,  revoke
 such action so far as concerns such Debt Security (or so far as concerns the
 principal amount represented by any exchanged or substituted Debt Security).
 Except as  aforesaid,  any such  action  taken by  the  holder of  any  Debt
 Security shall  be conclusive  and binding  upon such  holder and  upon  all
 future holders and owners  of such Debt Security,  and of any Debt  Security
 issued in exchange or substitution therefor  or on registration of  transfer
 thereof, irrespective of whether  or not any notation  in regard thereto  is
 made upon such  Debt Security  or any Debt  Security issued  in exchange  or
 substitution therefor.

                                ARTICLE VIII

                          SECURITYHOLDERS' MEETINGS

    SECTION 8.01.  Purposes of Meetings.
                   ---------------------
           A meeting of Securityholders  may be called at  any time and  from
 time to time pursuant to the provisions of this Article VIII for any of  the
 following purposes:

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

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

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

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

    SECTION 8.02.  Call of Meetings by Trustee.
                   ----------------------------
           The Trustee may, at any time, call a meeting of Securityholders to
 take any action specified in Section  8.01, to be held  at such time and  at
 such place in The City  of New York, the  Borough of Manhattan, or  Houston,
 Texas, as  the Trustee  shall  determine. Notice  of  every meeting  of  the
 Securityholders, setting forth the time and the place of such meeting and in
 general terms the  action proposed  to be taken  at such  meeting, shall  be
 mailed to holders  of Debt Securities  affected at their  addresses as  they
 shall appear on the  Debt Securities Register. Such  notice shall be  mailed
 not less than  20 nor more  than 180 days  prior to the  date fixed for  the
 meeting.

    SECTION 8.03.  Call of Meetings by Company or Securityholders.
                   -----------------------------------------------
           In case at any time the Company pursuant to a Board Resolution, or
 the holders  of at  least 10%  in  aggregate principal  amount of  the  Debt
 Securities, as the case may be,  then outstanding, shall have requested  the
 Trustee to call  a meeting of  Securityholders, by  written request  setting
 forth in reasonable detail the action  proposed to be taken at the  meeting,
 and the Trustee shall not have mailed  the notice of such meeting within  20
 days after receipt of such request, then the Company or such Securityholders
 may determine the time and the place in  for such meeting and may call  such
 meeting to take  any action authorized  in Section 8.01,  by mailing  notice
 thereof as provided in Section 8.02.

    SECTION 8.04.  Qualifications for Voting.
                   --------------------------
           To be entitled to vote at any meeting of Securityholders a  Person
 shall be (a) a holder of one or  more Debt Securities with respect to  which
 the meeting is  being held or  (b) a Person  appointed by  an instrument  in
 writing as proxy by a holder of one  or more such Debt Securities. The  only
 Persons who shall be entitled to  be present or to  speak at any meeting  of
 Securityholders shall be the  Persons entitled to vote  at such meeting  and
 their counsel and any representatives of the Trustee and its counsel and any
 representatives of the Company and its counsel.

    SECTION 8.05.  Regulations.
                   ------------
           Notwithstanding  any  other  provisions  of  this  Indenture,  the
 Trustee may make such  reasonable regulations as it  may deem  advisable for
 any meeting of Securityholders,  in regard to proof  of the holding of  Debt
 Securities and  of  the  appointment  of  proxies,  and  in  regard  to  the
 appointment  and  duties  of  inspectors   of  votes,  the  submission   and
 examination of  proxies, certificates  and other  evidence of  the  right to
 vote, and such  other matters concerning  the conduct of  the meeting as  it
 shall deem appropriate.

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

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

    SECTION 8.06.  Voting.
                   -------
           The vote upon any resolution submitted  to any meeting of  holders
 of Debt Securities with respect to which such meeting is being held shall be
 by written  ballots on  which shall  be subscribed  the signatures  of  such
 holders or  of their  representatives  by proxy  and  the serial  number  or
 numbers of the Debt  Securities held or represented  by them. The  permanent
 chairman of the  meeting shall  appoint two  inspectors of  votes who  shall
 count all votes cast at  the meeting for or  against any resolution and  who
 shall make and file with the secretary of the meeting their verified written
 reports in  triplicate  of  all votes  cast  at  the meeting.  A  record  in
 duplicate of the  proceedings of each  meeting of  Securityholders shall  be
 prepared by the secretary of the meeting and there shall be attached to said
 record the original reports of the inspectors of votes on any vote by ballot
 taken thereat and affidavits by one or more Persons having knowledge of  the
 facts setting forth a  copy of the  notice of the  meeting and showing  that
 said notice was mailed  as provided in Section  8.02. The record shall  show
 the serial numbers or numbers of the  Debt Securities voting in favor of  or
 against any  resolution. The  record shall  be signed  and verified  by  the
 affidavits of the permanent chairman and secretary of the meeting and one of
 the duplicates  shall be  delivered to  the  Company and  the other  to  the
 Trustee to be preserved by the Trustee, the latter to have attached  thereto
 the ballots voted at the  meeting.  Any record so signed and verified  shall
 be conclusive evidence of the matters therein stated.

    SECTION 8.07.  Quorum; Actions.
                   ----------------
           The Persons entitled to vote  a majority in outstanding  principal
 amount of the  Debt Securities shall  constitute a quorum  for a meeting  of
 Securityholders; provided, however,  that if any  action is to  be taken  at
 such meeting with  respect to a  consent, waiver,  request, demand,  notice,
 authorization, direction or other action which  may be given by the  holders
 of not less than a specified  percentage in outstanding principal amount  of
 the Debt  Securities, the  Persons holding  or representing  such  specified
 percentage in  outstanding  principal amount  of  the Debt  Securities  will
 constitute a quorum. In  the absence of  a quorum within  30 minutes of  the
 time appointed for any such meeting,  the meeting shall, if convened at  the
 request of Securityholders, be dissolved. In any other case the meeting  may
 be adjourned for  a period of  not less than  10 days as  determined by  the
 permanent chairman of the meeting prior to the adjournment of such  meeting.
 In the absence  of a quorum  at any such  adjourned meeting, such  adjourned
 meeting may be further adjourned for  a period of not  less than 10 days  as
 determined by the permanent chairman of the meeting prior to the adjournment
 of such  adjourned  meeting. Notice  of  the reconvening  of  any  adjourned
 meeting shall be given as provided in Section 8.02, except that such  notice
 need be given only once not less than five  days prior to the date on  which
 the meeting is scheduled to be  reconvened. Notice of the reconvening of  an
 adjourned meeting shall state expressly  the percentage, as provided  above,
 of the  outstanding principal  amount of  the  Debt Securities  which  shall
 constitute a quorum.

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

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

    SECTION 8.08.  Written Consent Without a Meeting.
                   ----------------------------------
           Whenever under  this  Indenture Securityholders  are  required  or
 permitted to take any  action by vote,  such action may  be taken without  a
 meeting on written consent, setting forth the action so taken, signed by the
 Securityholders of all outstanding Debt Securities entitled to vote thereon.
 No consent shall be effective to take the action referred to therein unless,
 within sixty days  of the  earliest dated  consent delivered  in the  manner
 required by this  paragraph to  the Trustee,  written consents  signed by  a
 sufficient number of  Securityholders to take  action are  delivered to  the
 Trustee at  its Principal  Office.  Delivery  made  to  the Trustee  at  its
 Principal Office, shall be  by hand or by  certificated or registered  mail,
 return receipt requested.  Written consent thus given by the Securityholders
 of such number of  Debt Securities as is  required hereunder shall have  the
 same effect  as a  valid vote  of  Securityholders of  such number  of  Debt
 Securities.

                                 ARTICLE IX

                           SUPPLEMENTAL INDENTURES

    SECTION 9.01. Supplemental Indentures without Consent of Securityholders.
                  -----------------------------------------------------------
           The Company,  when  authorized  by a  Board  Resolution,  and  the
 Trustee may, from time to time, and at  any time enter into an indenture  or
 indentures supplemental hereto, without the consent of the  Securityholders,
 for one or more of the following purposes:

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

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

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

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

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

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

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

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

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

    SECTION 9.02.  Supplemental Indentures with Consent of Securityholders.
                   --------------------------------------------------------
           With the consent (evidenced  as provided in  Section 7.01) of  the
 holders of not  less than a  majority in aggregate  principal amount of  the
 Debt Securities  at  the  time outstanding  affected  by  such  supplemental
 indenture, the  Company, when  authorized by  a  Board Resolution,  and  the
 Trustee may, from time to time, and at  any time enter into an indenture  or
 indentures supplemental hereto (which shall conform to the provisions of the
 Trust Indenture  Act, then  in effect,  applicable to  indentures  qualified
 thereunder) for the purpose of adding  any provisions to or changing in  any
 manner or eliminating  any of  the provisions of  this Indenture  or of  any
 supplemental indenture  or of  modifying in  any manner  the rights  of  the
 holders of the Debt Securities; provided, however, that no such supplemental
 indenture shall without such  consent of the holders  of each Debt  Security
 then outstanding and affected  thereby (i) change the  Maturity Date of  any
 Debt Security,  or  reduce  the principal  amount  thereof  or  any  premium
 thereon, or reduce the rate (or manner of calculation of the rate) or extend
 the time of  payment of interest  thereon, or reduce  any amount payable  on
 redemption thereof or make the principal thereof or any interest or  premium
 thereon payable in any coin or currency other than United States Dollars  or
 impair or  affect the  right of  any Securityholder  to institute  suit  for
 payment thereof or impair the right of  repayment, if any, at the option  of
 the holder, or (ii) reduce the  aforesaid percentage of Debt Securities  the
 holders of which are required to consent to any such supplemental indenture;
 and provided, further, that if the Debt Securities are held by the Trust  or
 a trustee of such trust, such supplemental indenture shall not be  effective
 until the  holders of  a majority  in aggregate  liquidation amount  of  the
 outstanding Capital  Securities shall  have consented  to such  supplemental
 indenture; provided, further, that if the  consent of the Securityholder  of
 each outstanding  Debt Security  is  required, such  supplemental  indenture
 shall not  be  effective  until  each  holder  of  the  outstanding  Capital
 Securities shall have consented to such supplemental indenture.

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

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

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

    SECTION 9.03.  Effect of Supplemental Indentures.
                   ----------------------------------
           Upon the execution of any  supplemental indenture pursuant to  the
 provisions of this Article IX, this Indenture  shall be and be deemed to  be
 modified and  amended in  accordance therewith  and the  respective  rights,
 limitations  of  rights,  obligations,  duties  and  immunities  under  this
 Indenture of the  Trustee, the Company  and the holders  of Debt  Securities
 shall thereafter be determined, exercised and enforced hereunder subject  in
 all respects to  such modifications  and amendments  and all  the terms  and
 conditions of any such supplemental indenture  shall be and be deemed to  be
 part of the terms and conditions of this Indenture for any and all purposes.

    SECTION 9.04.  Notation on Debt Securities.
                   ----------------------------
           Debt Securities authenticated and delivered after the execution of
 any supplemental indenture pursuant to the provisions of this Article IX may
 bear a  notation  as  to  any  matter  provided  for  in  such  supplemental
 indenture.  If the Company  or  the Trustee  shall  so determine,  new  Debt
 Securities so  modified  as to  conform,  in the  opinion  of the  Board  of
 Directors, to any  modification  of this  Indenture  contained in  any  such
 supplemental  indenture  may  be  prepared  and  executed  by  the  Company,
 authenticated by the Trustee  or the Authenticating  Agent and delivered  in
 exchange for the Debt Securities then outstanding.

    SECTION  9.05. Evidence of Compliance of Supplemental Indenture to be
                   ------------------------------------------------------
 Furnished to Trustee.
 ---------------------
           The Trustee, subject to the provisions of Sections 6.01 and  6.02,
 shall, in addition to  the documents required by  Section 14.06, receive  an
 Officers' Certificate and an Opinion of Counsel as conclusive evidence  that
 any supplemental  indenture  executed  pursuant  hereto  complies  with  the
 requirements of this  Article IX. The  Trustee shall receive  an Opinion  of
 Counsel as  conclusive evidence  that  any supplemental  indenture  executed
 pursuant to this Article IX is authorized or permitted by, and conforms  to,
 the terms of this Article IX and that it is proper for the Trustee under the
 provisions of this Article IX to join in the execution thereof.

                                  ARTICLE X

                           REDEMPTION OF SECURITIES

    SECTION 10.01.  Optional Redemption.
                    --------------------
           The Company shall have the right to redeem the Debt Securities, in
 whole or, provided that all accrued and unpaid interest has been paid on all
 Debt Securities for  all Interest Periods  terminating on or  prior to  such
 date, from time to time in  part, on any Interest  Payment Date on or  after
 June 15, 2010 (each, a "Redemption Date") at the Redemption Price.

    SECTION 10.02.  Special Event Redemption
                    ------------------------
           If a  Special Event  shall occur  and be  continuing, the  Company
 shall have the  right to redeem  the Debt Securities,  in whole  but not  in
 part, at any time  within 90 days following  the occurrence of such  Special
 Event (the "Special Redemption  Date") at the  Special Redemption Price.  In
 the event that the Special Redemption Date falls on a day prior to the LIBOR
 Determination Date  for  any Interest  Period,  then the  Company  shall  be
 required to pay to Securityholders, on the Business Day following such LIBOR
 Determination Date, any additional amount of  interest that would have  been
 payable on the Special Redemption Date had the amount of interest determined
 on such  LIBOR  Determination Date  been  known on  the  first day  of  such
 Interest Period

    SECTION 10.03.  Notice of Redemption; Selection of Debt Securities.
                    ---------------------------------------------------
           In case the Company shall desire  to exercise the right to  redeem
 all or, as the case may be, any part of the Debt Securities, it shall fix  a
 date for redemption and  shall mail, or  cause the Trustee  to mail (at  the
 expense of the Company),  a notice of  such redemption at  least 30 and  not
 more than 60 days prior to the date  fixed for redemption to the holders  of
 Debt Securities  so to  be redeemed  as a  whole or  in part  at their  last
 addresses as the  same appear on  the Debt Security  Register. Such  mailing
 shall be by first  class mail. The  notice, if mailed  in the manner  herein
 provided, shall be conclusively presumed to have been duly given, whether or
 not the  holder receives  such notice.  In any  case, failure  to give  such
 notice by  mail or  any defect  in the  notice  to the  holder of  any  Debt
 Security designated for redemption  as a whole or  in part shall not  affect
 the validity  of  the proceedings  for  the  redemption of  any  other  Debt
 Security.

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

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

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

    SECTION 10.04.  Payment of Debt Securities Called for Redemption.
                    -------------------------------------------------
           If notice  of redemption  has been  given as  provided in  Section
 10.03, the Debt Securities  or portions of Debt  Securities with respect  to
 which such notice has been given shall become due and payable on the related
 Redemption Date or the Special Redemption Date  (as the case may be) and  at
 the place  or places  stated in  such notice  at the  applicable  redemption
 price, together with unpaid interest accrued thereon to said Redemption Date
 or the Special Redemption Date (as the case  may be), and on and after  said
 Redemption Date or the Special Redemption Date (as the case may be)  (unless
 the Company shall  default in  the payment of  such Debt  Securities at  the
 redemption price, together with  unpaid  interest  accrued thereon  to  said
 date) interest on  the Debt  Securities or  portions of  Debt Securities  so
 called for redemption shall cease to  accrue. On presentation and  surrender
 of such Debt Securities at a place of payment specified in said notice, such
 Debt Securities or the specified portions thereof shall be paid and redeemed
 by the  Company at  the applicable  redemption price,  together with  unpaid
 interest accrued thereon to said Redemption  Date or the Special  Redemption
 Date (as the case may be).

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

                                 ARTICLE XI

              CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

    SECTION 11.01.  Company May Consolidate, etc., on Certain Terms.
                    ------------------------------------------------
           Nothing contained  in this  Indenture or  in the  Debt  Securities
 shall prevent any consolidation  or merger of the  Company with or into  any
 other corporation  or  corporations  (whether or  not  affiliated  with  the
 Company) or successive consolidations or mergers in which the Company or its
 successor or successors shall  be a party or  parties, or shall prevent  any
 sale, conveyance, transfer or other disposition of all or substantially  all
 of the  property  or  capital stock  of  the  Company or  its  successor  or
 successors to  any other  corporation (whether  or not  affiliated with  the
 Company, or its successor or successors)  authorized to acquire and  operate
 the same; provided, however,  that the Company  hereby covenants and  agrees
 that, (i) upon any such consolidation, merger (where the Company is not  the
 surviving corporation), sale, conveyance, transfer or other disposition, the
 successor entity shall  be a corporation  organized and  existing under  the
 laws of the United States or any  state thereof or the District of  Columbia
 (unless such corporation has (1) agreed to make all payments due in  respect
 of the Debt  Securities or,  if outstanding,  the Trust  Securities and  the
 Capital Securities Guarantee  without withholding  or deduction  for, or  on
 account of, any  taxes, duties,  assessments or  other governmental  charges
 under the  laws  or  regulations of  the  jurisdiction  of  organization  or
 residence (for  tax  purposes)  or of  such  corporation  or  any  political
 subdivision or  taxing  authority  thereof or  therein  unless  required  by
 applicable law, in which case such corporation shall have agreed to pay such
 additional amounts as shall be required so that the net amounts received and
 retained by the  holders of such  Debt Securities Trust  Securities, as  the
 case may  be, after  payment of  all  taxes (including  withholding  taxes),
 duties, assessments  or other  governmental charges,  will be  equal to  the
 amounts that such holders would have received and retained had no such taxes
 (including withholding  taxes,  duties, assessments  or  other  governmental
 charges been  imposed, (2)  irrevocably  and unconditionally  consented  and
 submitted to the jurisdiction of any United States federal court or New York
 state court, in each case located  in the City of  New York, the Borough  of
 Manhattan, in respect of any action,  suit or proceeding against it  arising
 out of  or in  connection  with this  Indenture,  the  Debt  Securities, the
 Capital  Securities  Guarantee  or  the  Declaration  and  irrevocably   and
 unconditionally  waived,  to  the  fullest  extent  permitted  by  law,  any
 objection to the laying of venue in any such court or that any such  action,
 suit or  proceeding  has been  brought  in  an inconvenient  forum  and  (3)
 irrevocably appointed  an agent  in The  City  of New  York for  service  of
 process in any action, suit or  proceeding referred to in clause (2)  above)
 and such corporation expressly assumes all of the obligations of the Company
 under the Debt Securities, this Indenture, the Capital Securities  Guarantee
 and the Declaration and (ii) after giving effect to any such  consolidation,
 merger, sale, conveyance, transfer or other disposition, no Default or Event
 of Default shall have occurred and be continuing.

    SECTION 11.02.  Successor Entity to be Substituted.
                    -----------------------------------
           In case  of  any  such consolidation,  merger,  sale,  conveyance,
 transfer or  other disposition  and upon  the  assumption by  the  successor
 entity, by supplemental indenture, executed and delivered to the Trustee and
 reasonably satisfactory in  form to  the Trustee,  of the  due and  punctual
 payment of the principal of and premium, if any, and interest on all of  the
 Debt Securities and the due and  punctual performance and observance of  all
 of the  covenants  and conditions  of  this  Indenture to  be  performed  or
 observed by  the Company,  such successor  entity shall  succeed to  and  be
 substituted for the Company, with  the same effect as  if it had been  named
 herein as  the  Company,  and thereupon  the  predecessor  entity  shall  be
 relieved of any further liability or  obligation hereunder or upon the  Debt
 Securities. Such successor entity thereupon may cause to be signed, and  may
 issue either in its own name  or in the name of the  Company, any or all  of
 the Debt Securities issuable hereunder which theretofore shall not have been
 signed by the  Company and delivered  to the Trustee  or the  Authenticating
 Agent; and, upon the order of  such successor entity instead of the  Company
 and subject to all the terms,  conditions and limitations in this  Indenture
 prescribed, the Trustee or the  Authenticating Agent shall authenticate  and
 deliver  any  Debt  Securities  which  previously  shall  have  been  signed
 and delivered  by  the  officers  of  the   Company,  to the  Trustee or the
 Authenticating Agent for authentication, and any Debt Securities which  such
 successor entity thereafter shall  cause to be signed  and delivered to  the
 Trustee  or  the  Authenticating  Agent  for  that  purpose.  All  the  Debt
 Securities so issued  shall in  all respects have  the same  legal rank  and
 benefit  under  this  Indenture  as  the  Debt  Securities  theretofore   or
 thereafter issued in accordance with the  terms of this Indenture as  though
 all of such Debt  Securities had been  issued at the  date of the  execution
 hereof.

    SECTION 11.03.  Opinion of Counsel to be Given to Trustee.
                    ------------------------------------------
           The Trustee, subject to the provisions of Sections 6.01 and  6.02,
 shall receive, in  addition to the  Opinion of Counsel  required by  Section
 9.05, an Opinion of Counsel as  conclusive evidence that any  consolidation,
 merger, sale, conveyance, transfer or other disposition, and any assumption,
 permitted or required  by the  terms of this  Article XI  complies with  the
 provisions of this Article XI.

                                 ARTICLE XII

                   SATISFACTION AND DISCHARGE OF INDENTURE

    SECTION 12.01.  Discharge of Indenture.
                    -----------------------
           When (a) the Company shall deliver to the Trustee for cancellation
 all  Debt  Securities  theretofore   authenticated  (other  than  any   Debt
 Securities which shall have been destroyed,  lost or stolen and which  shall
 have been replaced or paid as provided in Section 2.06) and not  theretofore
 canceled, or  (b)  all  the Debt  Securities  not  theretofore  canceled  or
 delivered to the Trustee for cancellation shall have become due and payable,
 or are by their terms to become due and payable within one year or are to be
 called for redemption within one year under arrangements satisfactory to the
 Trustee for  the giving  of  notice of  redemption,  and the  Company  shall
 deposit with the Trustee,  in trust, funds, which  shall be immediately  due
 and payable, sufficient  to pay at  maturity or upon  redemption all of  the
 Debt Securities  (other  than any  Debt  Securities which  shall  have  been
 destroyed, lost or  stolen and  which shall have  been replaced  or paid  as
 provided in  Section 2.06)  not theretofore  canceled  or delivered  to  the
 Trustee for  cancellation,  including principal  and  premium, if  any,  and
 interest due or to become  due to the Maturity  Date, any Redemption or  the
 Special Redemption Date,  as the case  may be, but  excluding, however,  the
 amount of any moneys for the payment  of principal of, and premium, if  any,
 or interest on the Debt Securities (1) theretofore repaid to the Company  in
 accordance with the provisions of Section 12.04, or (2) paid to any state or
 to the District of  Columbia pursuant to its  unclaimed property or  similar
 laws, and if  in the case  of either clause  (a) or clause  (b) the  Company
 shall also pay or cause to be paid  all other sums payable hereunder by  the
 Company, then this Indenture shall cease to be of further effect except  for
 the provisions of  Sections 2.05,  2.06, 3.01,  3.02, 3.04,  6.06, 6.09  and
 12.04 hereof, which shall survive until such Debt Securities shall mature or
 are redeemed, as the case may be, and are paid in full. Thereafter, Sections
 6.06, 6.09  and 12.04  shall survive,  and  the Trustee,  on demand  of  the
 Company accompanied by an Officers' Certificate  and an Opinion of  Counsel,
 each stating that all conditions precedent  herein provided for relating  to
 the satisfaction and discharge  of this Indenture  have been complied  with,
 and at the cost and expense of the Company, shall execute proper instruments
 acknowledging satisfaction of and  discharging this Indenture, the  Company,
 however, hereby agreeing to reimburse the Trustee for any costs or  expenses
 thereafter reasonably and  properly incurred  by the  Trustee in  connection
 with this Indenture or the Debt Securities.

    SECTION 12.02.  Deposited Moneys to be Held in Trust by Trustee.
                    ------------------------------------------------
           Subject to the provisions of  Section 12.04, all moneys  deposited
 with the  Trustee pursuant  to Section  12.01  shall be  held in  trust  and
 applied by it to  the payment, either directly  or through any Paying  Agent
 (including the Company if acting as its own Paying Agent), to the holders of
 the particular Debt  Securities for the  payment of which  such moneys  have
 been deposited with the Trustee  of all sums due  and to become due  thereon
 for principal, and premium, if any, and interest.

    SECTION 12.03.  Paying Agent to Repay Moneys Held.
                    ----------------------------------
           Upon the satisfaction and discharge of this Indenture, all  moneys
 then held  by  any Paying  Agent  of the  Debt  Securities (other  than  the
 Trustee) shall, upon demand of the Company, be repaid to the Company or paid
 to the Trustee, and thereupon such  Paying Agent shall be released from  all
 further liability with respect to such moneys.

    SECTION 12.04.  Return of Unclaimed Moneys.
                    ---------------------------
           Any moneys deposited  with or paid  to the Trustee  or any  Paying
 Agent for payment of the principal of,  and premium, if any, or interest  on
 Debt Securities and not  applied but remaining unclaimed  by the holders  of
 Debt Securities for two  years after the date  upon which the principal  of,
 and premium, if any, or  interest on such Debt  Securities, as the case  may
 be, shall have become due and payable, shall be repaid to the Company by the
 Trustee or such Paying Agent on written demand; and the holder of any of the
 Debt Securities shall thereafter  look only to the  Company for any  payment
 which such  holder may  be entitled  to  collect and  all liability  of  the
 Trustee or such  Paying Agent with  respect to such  moneys shall  thereupon
 cease.

                                ARTICLE XIII

       IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

    SECTION 13.01.  Indenture and Debt Securities Solely Corporate
                    ----------------------------------------------
 Obligations.
 ------------
           No recourse for  the payment of  the principal of  or premium,  if
 any, or interest on  any Debt Security,  or for any  claim based thereon  or
 otherwise in respect thereof, and no recourse under or upon any  obligation,
 covenant  or  agreement  of  the  Company  in  this  Indenture  or  in   any
 supplemental indenture, or  in any  such Debt  Security, or  because of  the
 creation of any indebtedness represented thereby,  shall be had against  any
 incorporator, stockholder, officer,  director, employee or  agent, as  such,
 past, present or future, of the  Company or of any predecessor or  successor
 corporation of the Company,  either directly or through  the Company or  any
 successor corporation of the Company, whether by virtue of any constitution,
 statute or rule of law, or by  the enforcement of any assessment or  penalty
 or  otherwise;  it  being  expressly  understood  that  all  such  liability
 is hereby  expressly  waived  and  released  as  a condition  of, and  as  a
 consideration for, the execution of this Indenture and the issue of the Debt
 Securities.

                                 ARTICLE XIV

                           MISCELLANEOUS PROVISIONS

    SECTION 14.01.  Successors.
                    -----------
           All the covenants,  stipulations, promises and  agreements of  the
 Company contained in this  Indenture shall bind  its successors and  assigns
 whether so expressed or not.

    SECTION 14.02.  Official Acts by Successor Entity.
                    ----------------------------------
           Any  act  or  proceeding  by  any  provision  of  this   Indenture
 authorized or required to  be done or performed  by any board, committee  or
 officer of the Company shall and may  be done and performed with like  force
 and effect by the like board, committee, officer or other authorized  Person
 of any entity that shall at the time be the lawful successor of the Company.

    SECTION 14.03.  Surrender of Company Powers.
                    ----------------------------
           The Company by instrument in writing executed by authority of  2/3
 (two-thirds) of its  Board of  Directors and  delivered to  the Trustee  may
 surrender any of the powers reserved to the Company and thereupon such power
 so surrendered  shall  terminate  both as  to  the  Company and  as  to  any
 permitted successor.

    SECTION 14.04.  Addresses for Notices, etc.
                    ---------------------------
           Any notice or demand which by  any provision of this Indenture  is
 required or  permitted to  be given  or  served by  the  Trustee or  by  the
 Securityholders on the Company  may be given or  served in writing by  being
 deposited postage prepaid by registered or  certified mail in a post  office
 letter box addressed (until another address is filed by the Company with the
 Trustee for such purpose) to the Company at:

                       Hallmark Financial Services, Inc.
                          777 Main Street, Suite 1000
                             Fort Worth, TX  76102
                          Attention:  Mark J. Morrison

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

                          600 Travis Street, 50th Floor
                               Houston, TX 77002
                    Attention: Worldwide Securities Services

    SECTION 14.05.  Governing Law.
                    --------------
           This Indenture and  each Debt  Security shall  be deemed  to be  a
 contract made under the law of the State  of New York, and for all  purposes
 shall be governed by and construed in accordance with the law of said State,
 without regard  to conflict  of laws  principles of  said State  other  than
 Section 5-1401 of the New York General Obligations Law.

    SECTION 14.06.  Evidence of Compliance with Conditions Precedent.
                    -------------------------------------------------
           Upon any application or  demand by the Company  to the Trustee  to
 take any action under any of  the provisions of this Indenture, the  Company
 shall furnish to the  Trustee an Officers' Certificate  stating that in  the
 opinion of the  signers all conditions  precedent, if any,  provided for  in
 this Indenture relating to the proposed  action have been complied with  and
 an Opinion of Counsel stating that, in the opinion of such counsel, all such
 conditions precedent have been complied with (except that no such Opinion of
 Counsel is required to  be furnished to the  Trustee in connection with  the
 authentication and issuance of  Debt Securities issued on  the date of  this
 Indenture).

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

    SECTION 14.07.  Business Day Convention.
                    ------------------------
           Notwithstanding anything to the contrary contained herein, if  any
 Interest Payment Date, other than the Maturity Date, any Redemption Date  or
 the Special Redemption Date, falls on a day that is not a Business Day, then
 any interest payable will be paid on, and such Interest Payment Date will be
 moved to, the  next succeeding Business  Day, and  additional interest  will
 accrue for each day that such  payment is delayed as  a result  thereof.  If
 the Maturity Date, Redemption Date or the Special Redemption Date falls on a
 day that is not a Business Day, then the principal, premium, if any,  and/or
 interest payable on such date will  be paid on the next succeeding  Business
 Day (and no additional interest will accrue in respect of such payment  made
 on such next  succeeding Business Day),  except that, if  such Business  Day
 falls in the next succeeding calendar year, then such payment shall be  made
 on the immediately preceding Business Day with the same force and effect  as
 if such payment  had been  made on such  Maturity Date,  Redemption Date  or
 Special Redemption Date.

    SECTION 14.08.  Table of Contents, Headings, etc.
                    ---------------------------------
           The table of contents and the titles and headings of the  articles
 and sections  of  this  Indenture have  been  inserted  for  convenience  of
 reference only, are not to be considered a part hereof, and shall in no  way
 modify or restrict any of the terms or provisions hereof.

    SECTION 14.09.  Execution in Counterparts.
                    --------------------------
           This Indenture may be executed in any number of counterparts, each
 of which  shall  be  an  original,  but  such  counterparts  shall  together
 constitute but one and the same instrument.

    SECTION 14.10.  Severability.
                    -------------
           In case  any one  or  more of  the  provisions contained  in  this
 Indenture  or  in  the  Debt  Securities shall  for  any  reason be  held to
 be  invalid, illegal  or  unenforceable  in  any  respect,  such invalidity,
 illegality or unenforceability shall not affect any other provisions of this
 Indenture or  of such  Debt Securities,  but this  Indenture and  such  Debt
 Securities shall be construed as if such invalid or illegal or unenforceable
 provision had never been contained herein or therein.

    SECTION 14.11.  Assignment.
                    -----------
           Subject to Article  XI, the  Company will  have the  right at  all
 times to assign any  of its rights or  obligations under this Indenture  and
 the Debt Securities to a direct  or indirect wholly owned Subsidiary of  the
 Company, provided, that, in  the event of any  such assignment, the  Company
 will remain liable for all such obligations. Subject to the foregoing,  this
 Indenture is binding upon  and inures to the  benefit of the parties  hereto
 and  their  respective  successors  and  assigns.  This  Indenture  may  not
 otherwise be assigned by the parties thereto.

    SECTION 14.12.  Acknowledgment of Rights.
                    -------------------------
           The Company acknowledges that, with respect to any Debt Securities
 held by  the  Trust  or the  Institutional  Trustee  of the  Trust,  if  the
 Institutional Trustee of the  Trust fails to enforce  its rights under  this
 Indenture as the holder of Debt Securities  held as the assets of the  Trust
 after the  holders  of a  majority  in  Liquidation Amount  of  the  Capital
 Securities of  the Trust  have so  directed  in writing  such  Institutional
 Trustee, a holder of record of  such Capital Securities may to, the  fullest
 extent permitted by  law, institute legal  proceedings directly against  the
 Company to enforce such Institutional Trustee's rights under this  Indenture
 without first instituting any  legal proceedings against such  Institutional
 Trustee or any other Person. Notwithstanding  the foregoing, if an Event  of
 Default has occurred and is continuing and such event is attributable to the
 failure of the Company to pay interest (or premium, if any) or principal  on
 the Debt  Securities on  the date  such  interest (or  premium, if  any)  or
 principal is otherwise due and payable (or in the case of redemption, on the
 Redemption Date or the Special Redemption date, as applicable), the  Company
 acknowledges that a holder of record of Capital Securities of the Trust  may
 directly institute  a  proceeding against  the  Company for  enforcement  of
 payment to such holder directly of the principal of (or premium, if any)  or
 interest on the Debt Securities having  an aggregate principal amount  equal
 to the aggregate Liquidation Amount of the Capital Securities of such holder
 on or after the respective due date (or,  in the case of redemption, on  the
 Redemption Date or the Special Redemption Date, as applicable) specified  in
 the Debt Securities.

                                 ARTICLE XV

                       SUBORDINATION OF DEBT SECURITIES

    SECTION 15.01.  Agreement to Subordinate.
                    -------------------------
           The  Company  covenants  and  agrees,  and  each  holder  of  Debt
 Securities issued  hereunder  and  under  any  supplemental  indenture  (the
 "Additional  Provisions")  by   such  Securityholder's  acceptance   thereof
 likewise covenants  and agrees,  that all  Debt Securities  shall be  issued
 subject to the  provisions of this  Article XV; and  each holder  of a  Debt
 Security, whether  upon  original  issue  or  upon  transfer  or  assignment
 thereof, accepts and agrees to be bound by such provisions.

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

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

    SECTION 15.02.  Default on Senior Indebtedness.
                    -------------------------------
           In the event  and during the  continuation of any  default by  the
 Company in the payment of principal, premium, if any, interest or any  other
 payment due  on  any  Senior  Indebtedness  of  the  Company  following  any
 applicable grace period,  or in the  event that the  maturity of any  Senior
 Indebtedness of the Company has been  accelerated because of a default,  and
 such acceleration  has  not  been rescinded  or  canceled  and  such  Senior
 Indebtedness has not  been paid in  full, then, in  either case, no  payment
 shall be made by the Company  with respect to the  payments due on the  Debt
 Securities.

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

    SECTION 15.03.  Liquidation; Dissolution; Bankruptcy.
                    -------------------------------------
           Upon any payment by the Company  or distribution of assets of  the
 Company of any kind or character,  whether in cash, property or  securities,
 to  creditors  upon  any  dissolution  or  winding-  up  or  liquidation  or
 reorganization of  the  Company,  whether voluntary  or  involuntary  or  in
 bankruptcy, insolvency, receivership or  other proceedings, all amounts  due
 upon all Senior Indebtedness of the Company shall first be paid in full,  or
 payment thereof provided for in money  in accordance with its terms,  before
 any payment is made by the Company on the Debt Securities; and upon any such
 dissolution or winding-up or liquidation  or reorganization, any payment  by
 the  Company,  or  distribution  of  assets  of  the  Company  of  any  kind
 or character,  whether  in  cash,  property  or  securities,  to  which  the
 Securityholders or  the  Trustee  would  be  entitled  to  receive  from the
 Company, except for the provisions of this Article XV, shall be paid by  the
 Company, or by  any receiver,  trustee in  bankruptcy, liquidating  trustee,
 agent or  other  Person making  such  payment  or distribution,  or  by  the
 Securityholders or by the Trustee under  this Indenture if received by  them
 or it, directly to  the holders of Senior  Indebtedness of the Company  (pro
 rata to  such holders  on the  basis  of the  respective amounts  of  Senior
 Indebtedness held by such  holders, as calculated by  the Company) or  their
 representative or representatives, or to the  trustee or trustees under  any
 indenture  pursuant  to  which   any  instruments  evidencing  such   Senior
 Indebtedness may have been issued, as their respective interests may appear,
 to the extent necessary to pay such Senior Indebtedness in full, in money or
 money's worth, after giving effect to any concurrent payment or distribution
 to or for  the holders of  such Senior Indebtedness,  before any payment  or
 distribution is made to the Securityholders.

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

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

    SECTION 15.04.  Subrogation.
                    ------------
           Subject to the payment in full  of all Senior Indebtedness of  the
 Company, the  Securityholders  shall be  subrogated  to the  rights  of  the
 holders of such Senior Indebtedness to receive payments or distributions  of
 cash, property  or  securities of  the  Company applicable  to  such  Senior
 Indebtedness  until  all  payments due on the  Debt Securities shall be paid
 in full;  and,  for  the   purposes  of  such subrogation,  no  payments  or
 distributions to  the  holders of  such  Senior Indebtedness  of  any  cash,
 property or securities to which the Securityholders or the Trustee would  be
 entitled except for the provisions of  this Article XV, and no payment  over
 pursuant to the provisions of this Article XV  to or for the benefit of  the
 holders of  such  Senior Indebtedness  by  Securityholders or  the  Trustee,
 shall, as between the  Company, its creditors other  than holders of  Senior
 Indebtedness of  the Company  and the  holders of  the Debt  Securities,  be
 deemed to be a payment or  distribution by the Company  to or on account  of
 such Senior  Indebtedness. It  is understood  that  the provisions  of  this
 Article XV are  and are  intended solely for  the purposes  of defining  the
 relative rights of the holders of the Debt Securities, on the one hand,  and
 the holders of such Senior Indebtedness, on the other hand.

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

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

    SECTION 15.05.  Trustee to Effectuate Subordination.
                    ------------------------------------
           Each Securityholder  by such  Securityholder's acceptance  of  the
 Debt Securities authorizes and directs the Trustee on such  Securityholder's
 behalf to take such action as may be necessary or appropriate to  effectuate
 the subordination provided in this Article XV and appoints the Trustee  such
 Securityholder's attorney-in-fact for any and all such purposes.

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

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

    SECTION 15.07.  Rights of the Trustee. Holders of Senior Indebtedness.
                    ------------------------------------------------------
           The Trustee in its  individual capacity shall  be entitled to  all
 the  rights  set  forth  in  this  Article  XV  in  respect  of  any  Senior
 Indebtedness at any time held by it, to the same extent as any other  holder
 of Senior  Indebtedness, and  nothing in  this Indenture  or any  Additional
 Provisions shall deprive the Trustee of any of its rights as such holder.

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

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

    SECTION 15.08.  Subordination May Not Be Impaired.
                    ----------------------------------
           No  right  of  any  present  or   future  holder  of  any   Senior
 Indebtedness of  the Company  to enforce  subordination as  herein  provided
 shall at any time in any way be prejudiced or impaired by any act or failure
 to act on the part of the Company, or by any act or failure to act, in  good
 faith, by any such holder, or by any noncompliance by the Company, with  the
 terms, provisions  and  covenants  of  this  Indenture,  regardless  of  any
 knowledge thereof that  any such  holder may  have or  otherwise be  charged
 with.

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

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

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

                               Hallmark Financial Services, Inc.

                               By: ______________________________________
                               Name:____________________________________
                               Title:_____________________________________

                               JPMorgan Chase Bank, National Association, as
                               Trustee

                               By: ______________________________________
                               Name: ____________________________________
                               Title: _____________________________________

<PAGE>

                                  EXHIBIT A

                 FORM OF JUNIOR SUBORDINATED DEBT SECURITIES
                                   DUE 2035

                          [FORM OF FACE OF SECURITY]
                          --------------------------
           THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT  OF
 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
 OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST  OR
 PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
 ENCUMBERED OR OTHERWISE DISPOSED OF IN  THE ABSENCE OF SUCH REGISTRATION  OR
 UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE  REGISTRATION
 REQUIREMENTS OF  THE SECURITIES  ACT. THE  HOLDER OF  THIS SECURITY  BY  ITS
 ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH  SECURITY
 PRIOR TO THE  DATE WHICH  IS THE LATER  OF (i)  TWO YEARS  (OR SUCH  SHORTER
 PERIOD OF TIME AS PERMITTED BY  RULE 144(k) UNDER THE SECURITIES ACT)  AFTER
 THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST  DATE
 ON WHICH THE  COMPANY OR ANY  AFFILIATE (AS DEFINED  IN RULE  405 UNDER  THE
 SECURITIES ACT)  OF THE  COMPANY WAS  THE HOLDER  OF THIS  SECURITY OR  SUCH
 INTEREST OR PARTICIPATION (OR ANY PREDECESSOR  THERETO) AND (ii) SUCH  LATER
 DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW,
 ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES  ACT
 ("RULE 144A"), TO A  PERSON THE HOLDER REASONABLY  BELIEVES IS A  "QUALIFIED
 INSTITUTIONAL BUYER" AS  DEFINED IN  RULE 144A  THAT PURCHASES  FOR ITS  OWN
 ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
 IS GIVEN THAT  THE TRANSFER  IS BEING  MADE IN  RELIANCE ON  RULE  144A, (C)
 PURSUANT  TO  AN  EXEMPTION  FROM  THE  REGISTRATION  REQUIREMENTS  OF   THE
 SECURITIES  ACT  TO   AN  "ACCREDITED  INVESTOR"   WITHIN  THE  MEANING   OF
 SUBPARAGRAPH (a) (1), (2), (3), (7) or (8) OF RULE 501 UNDER THE  SECURITIES
 ACT THAT IS ACQUIRING THE SECURITY FOR  ITS OWN ACCOUNT, OR FOR THE  ACCOUNT
 OF AN "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO,
 OR FOR OFFER OR  SALE IN CONNECTION WITH,  ANY DISTRIBUTION IN VIOLATION  OF
 THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM  THE
 REGISTRATION REQUIREMENTS OF  THE SECURITIES ACT,  SUBJECT TO THE  COMPANY'S
 RIGHT PRIOR TO ANY SUCH OFFER, SALE  OR TRANSFER PURSUANT TO CLAUSES (C)  OR
 (D) TO REQUIRE THE DELIVERY OF  AN OPINION OF COUNSEL, CERTIFICATION  AND/OR
 OTHER INFORMATION SATISFACTORY  TO IT IN  ACCORDANCE WITH  THE INDENTURE,  A
 COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS  SECURITY
 BY ITS  ACCEPTANCE HEREOF  AGREES THAT  IT WILL  COMPLY WITH  THE  FOREGOING
 RESTRICTIONS.

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

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

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

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

<PAGE>

             Form of Junior Subordinated Debt Securities due 2035

                                      of

                      Hallmark Financial Services, Inc.

           Hallmark Financial  Services,  Inc.,  a  company  incorporated  in
 Nevada (the "Company"), for value received promises to pay to JPMorgan Chase
 Bank, National Association,  not in its  individual capacity  but solely  as
 Institutional Trustee for Hallmark Statutory  Trust I, a Delaware  statutory
 trust (the "Holder"),  or registered assigns,  the principal  sum of  Thirty
 Million Nine Hundred Twenty-Eight Thousand on June 15, 2035 (or earlier upon
 any Redemption Date or the Special  Redemption Date, or any earlier date  of
 acceleration of maturity of  this Debt Security and  to pay interest on  the
 outstanding principal amount of  this debt security from  June 21, 2005,  or
 from the most recent Interest Payment  Date to which interest has been  paid
 or duly provided for, quarterly (subject to deferral as set forth herein) in
 arrears on March  15,  June 15,  September 15 and December  15 of each  year
 commencing September 15, 2005 (each such date, an "Interest Payment  Date"),
 at the rate of 7.725% (the "Fixed Rate") per annum until June 15, 2015  (the
 "Fixed Rate Period") and  thereafter at a variable  per annum rate equal  to
 LIBOR (as  defined  in  the Indenture)  plus  3.25%  (the  "Variable  Rate")
 (provided, however, that  the Interest Rate,  defined to  include the  Fixed
 Rate and  Variable Rate,  as applicable,  for any  Interest Period  may  not
 exceed the  highest rate  permitted by  New York  law, as  the same  may  be
 modified by United States law of general applicability) until the  principal
 hereof shall have become due and  payable, and on any overdue principal  and
 (without duplication and  to the  extent that  payment of  such interest  is
 enforceable under applicable law) on any overdue installment of interest  at
 an annual rate equal to the Interest Rate in effect for each such  Extension
 Period compounded quarterly.  During the  Fixed Rate Period, interest  shall
 be computed on the basis of a 360-day  year of twelve 30-day months and  the
 amount payable for any partial period shall be computed on the basis of  the
 number of days  elapsed in a  360-day year of  twelve  30-day  months.  Upon
 expiration of the Fixed Rate Period, the amount of interest payable for  any
 Interest Period will  be computed on  the basis of  a 360-day  year and  the
 actual number of days elapsed in the relevant Interest Period.

           The interest so payable, and punctually paid or duly provided for,
 on any Interest Payment Date will, as provided in the Indenture, be paid  to
 the Person in  whose name  this Debt Security  (or one  or more  Predecessor
 Securities, as defined  in said  Indenture) is  registered at  the close  of
 business on  the  "regular  record date"  for  such  interest,  except  that
 interest and any  Deferred Interest payable  on the Maturity  Date shall  be
 paid to  the  Person  to whom  principal  is  paid. Any  such  interest  not
 punctually paid or duly provided for shall forthwith cease to be payable  to
 the registered holders on such  regular record date and  may be paid to  the
 Person in whose  name this Debt  Security (or one  or more Predecessor  Debt
 Securities) is registered at the close of business on a special record  date
 to be  fixed by  the Trustee  for the  payment of  such defaulted  interest,
 notice whereof  shall  be  given  to the  registered  holders  of  the  Debt
 Securities not less than 10 days prior  to such special record date, all  as
 more fully provided in the Indenture.

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

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

           Upon submission of  Notice (as defined  in the  Indenture) and  so
 long as no  Event of  Default has occurred  and is  continuing, the  Company
 shall have the  right, from time  to time and  without causing  an Event  of
 Default, to defer payments of interest  on the Debt Securities by  extending
 the Interest Period on the Debt Securities at any time and from time to time
 during the term of the Debt  Securities, for up to 20 consecutive  quarterly
 periods (each such extended Interest Period, together with all previous  and
 further  consecutive  extensions  thereof,  is  referred  to  herein  as  an
 "Extension Period"), during which Extension Period no interest shall be  due
 and payable (except any  Additional Interest that may  be due and  payable).
 During any Extension Period,  interest will continue to  accrue on the  Debt
 Securities, and interest on such accrued interest (such accrued interest and
 interest thereon referred to herein as  "Deferred Interest") will accrue  at
 an annual rate equal to the Interest Rate 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 an Interest Payment
 Date. At the  end of any  such Extension Period  the Company  shall pay  all
 Deferred Interest then accrued and unpaid on the Debt Securities;  provided,
 however, that no Extension Period may  extend beyond the Maturity Date,  any
 Redemption Date  or  the  Special Redemption  Date  and  provided,  further,
 however, during any such Extension Period,  the Company may not (i)  declare
 or pay any dividends or distributions  on, or redeem, purchase, acquire,  or
 make a liquidation  payment with respect  to, any of  the Company's  capital
 stock, (ii) make  any payment  on or repay,  repurchase or  redeem any  debt
 securities of  the Company  that rank  pari passu  in all  respects with  or
 junior in interest to  the Debt Securities or  (iii) make any payment  under
 any guarantees of the Company that rank  in all respects pari passu with  or
 junior in  interest to  the Capital  Securities  Guarantee (other  than  (a)
 repurchases, redemptions or other acquisitions of shares of capital stock of
 the Company (A) in connection with any employment contract, benefit plan  or
 other similar arrangement with or for the benefit of one or more  employees,
 officers, directors  or  consultants,  (B) in  connection  with  a  dividend
 reinvestment or stockholder stock  purchase plan or  (C) in connection  with
 the issuance of capital stock of the Company (or securities convertible into
 or exercisable for such capital stock),  as consideration in an  acquisition
 transaction entered into prior to the applicable Extension Period, (b) as  a
 result of any exchange, reclassification,  combination or conversion of  any
 class or series of the  Company's capital stock (or  any capital stock of  a
 subsidiary of the Company) for any class or series of the Company's  capital
 stock or of any class or series of the Company's indebtedness for any  class
 or series of  the Company's capital  stock, (c) the  purchase of  fractional
 interests  in  shares  of  the  Company's  capital  stock  pursuant  to  the
 conversion or  exchange provisions  of such  capital stock  or the  security
 being  converted  or  exchanged,  (d)  any  declaration  of  a  dividend  in
 connection with any stockholder's  rights plan, or  the issuance of  rights,
 stock or  other  property  under  any  stockholder's  rights  plan,  or  the
 redemption or repurchase of rights pursuant thereto, or (e) any dividend  in
 the form of  stock, warrants,  options or  other rights  where the  dividend
 stock or the stock issuable upon exercise of such warrants, options or other
 rights is the  same stock as  that on which  the dividend is  being paid  or
 ranks pari passu with or junior to such stock). Prior to the termination  of
 any Extension Period, the Company may further extend such Extension  Period,
 provided, that  such period  together with  all  such previous  and  further
 consecutive extensions  that are  part of  such Extension  Period shall  not
 exceed 20  consecutive  quarterly  periods.  Upon  the  termination  of  any
 Extension Period and upon the payment of all Deferred Interest, the  Company
 may commence a new Extension Period, subject to the foregoing  requirements.
 No interest  or  Deferred  Interest  shall be  due  and  payable  during  an
 Extension Period, except  at the end  thereof, but  Deferred Interest  shall
 accrue upon each installment of interest that would otherwise have been  due
 and payable during such Extension Period until such installment is paid. The
 Company must give the Trustee notice of its election to begin or extend  any
 Extension Period not later than the related regular record date for the next
 succeeding Interest Payment Date.

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

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

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

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

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

                                         Hallmark Financial Services, Inc.

                                         By _____________________________
                                         Name:___________________________
                                         Title:__________________________

 Dated:__________________, 2005

<PAGE>

                        CERTIFICATE OF AUTHENTICATION
                        -----------------------------

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

                                  JPMorgan Chase Bank, National Association,
                                  not in its individual capacity but solely
                                                as the Trustee

                                  By:
                                     --------------------------------------
                                      Authorized Officer

 Dated:__________________, 2005

<PAGE>

                        [FORM OF REVERSE OF SECURITY]

           This Debt Security  is one  of a  duly authorized  series of  Debt
 Securities of  the  Company, all  issued  or to  be  issued pursuant  to  an
 Indenture (the "Indenture"), dated  as of June 21,  2005, duly executed  and
 delivered between the Company and JPMorgan Chase Bank, National  Association
 as  Trustee  (the  "Trustee"),  to   which  Indenture  and  all   indentures
 supplemental thereto  reference is  hereby made  for  a description  of  the
 rights, limitations of rights, obligations, duties and immunities thereunder
 of the Trustee, the Company and the holders of the Debt Securities (referred
 to herein as the "Debt Securities") of  which this Debt Security is a  part.
 The summary of  the terms of  this Debt Security  contained herein does  not
 purport to be complete and is qualified by reference to the Indenture.

           Upon the  occurrence  and  continuation  of  a  Tax  Event  or  an
 Investment Company Event (each  a "Special Event"),  this Debt Security  may
 become due and payable,  in whole but not  in part, at  any time, within  90
 days following the  occurrence of such  Tax Event or  an Investment  Company
 Event (the "Special Redemption  Date"), as the case  may be, at the  Special
 Redemption Price. In the event that  the Special Redemption Date falls on  a
 day prior to the LIBOR Determination Date for any Interest Period, then  the
 Company shall be  required to pay  to Securityholders, on  the Business  Day
 following such LIBOR Determination Date,  any additional amount of  interest
 that would have been payable on  the Special Redemption Date had the  amount
 of interest determined on  such LIBOR Determination Date  been known on  the
 first day of such Interest Period.

           The Company shall also have the right to redeem this Debt Security
 at its option,  in whole or  from time to  time in part  (provided that  all
 accrued and unpaid  interest has been  paid on all  Debt Securities for  all
 Interest Periods terminating  on or  prior to  such date),  on any  Interest
 Payment Date on or after  June 15, 2010 (each,  a Redemption Date"), at  the
 Redemption Price (as defined herein).

           Any redemption pursuant to either of the preceding two  paragraphs
 will be made,  upon not  less than 30  days' nor  more than  60 days'  prior
 written notice.  If the Debt  Securities are only partially redeemed by  the
 Company, the Debt Securities will be redeemed pro  rata or by lot or by  any
 other method utilized by the Trustee.

           "Redemption Price" means 100% of the principal amount of the  Debt
 Securities being  redeemed plus  accrued and  unpaid interest  on such  Debt
 Securities to the Redemption Date.

           "Special Redemption  Price" means  (1) if  the Special  Redemption
 Date is before June 15, 2010, 107.5% of the principal amount to be  redeemed
 plus any accrued and unpaid interest thereon to the date of such  redemption
 and (2) if the  Special Redemption Date is  on or after  June 15, 2010,  the
 Redemption Price.

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

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

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

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

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

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

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

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

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

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

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