Document:

Exhibit 10.4

CODORUS VALLEY BANCORP, INC.

as Issuer

INDENTURE

Dated as of June 28, 2006

WELLS FARGO BANK, NATIONAL ASSOCIATION

As Trustee

JUNIOR SUBORDINATED DEBT SECURITIES

Due July 7, 2036

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
ARTICLE I

	
DEFINITIONS

	
 

	
SECTION
1.01.

	
Definitions

	
 

	
1

	
 

	
 

	
 

	
 

	
ARTICLE II

	
DEBT SECURITIES

	
 

	
 

	
 

	
 

	
SECTION
2.01.

	
Authentication
and Dating

	
 

	
8

	
 

	
 

	
 

	
 

	
SECTION
2.02.

	
Form of
Trustee’s Certificate of Authentication

	
 

	
9

	
 

	
 

	
 

	
 

	
SECTION
2.03.

	
Form and
Denomination of Debt Securities

	
 

	
9

	
 

	
 

	
 

	
 

	
SECTION
2.04.

	
Execution of
Debt Securities

	
 

	
9

	
 

	
 

	
 

	
 

	
SECTION
2.05.

	
Exchange and
Registration of Transfer of Debt Securities

	
 

	
10

	
 

	
 

	
 

	
 

	
SECTION
2.06.

	
Mutilated,
Destroyed, Lost or Stolen Debt Securities

	
 

	
12

	
 

	
 

	
 

	
 

	
SECTION
2.07.

	
Temporary
Debt Securities

	
 

	
13

	
 

	
 

	
 

	
 

	
SECTION
2.08.

	
Payment of
Interest

	
 

	
14

	
 

	
 

	
 

	
 

	
SECTION
2.09.

	
Cancellation
of Debt Securities Paid, etc

	
 

	
15

	
 

	
 

	
 

	
 

	
SECTION
2.10.

	
Computation
of Interest

	
 

	
15

	
 

	
 

	
 

	
 

	
SECTION
2.11.

	
Extension of
Interest Payment Period

	
 

	
17

	
 

	
 

	
 

	
 

	
SECTION
2.12.

	
CUSIP
Numbers

	
 

	
18

	
 

	
 

	
 

	
 

	
SECTION
2.13.

	
Global
Debentures

	
 

	
18

	
 

	
 

	
 

	
 

	
ARTICLE III

	
PARTICULAR COVENANTS OF THE COMPANY

	
 

	
 

	
 

	
 

	
SECTION
3.01.

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

	
 

	
20

	
 

	
 

	
 

	
 

	
SECTION
3.02.

	
Offices for
Notices and Payments, etc

	
 

	
21

	
 

	
 

	
 

	
 

	
SECTION
3.03.

	
Appointments
to Fill Vacancies in Trustee’s Office

	
 

	
21

	
 

	
 

	
 

	
 

	
SECTION
3.04.

	
Provision as
to Paying Agent

	
 

	
21

	
 

	
 

	
 

	
 

	
SECTION
3.05.

	
Certificate
to Trustee

	
 

	
22

	
 

	
 

	
 

	
 

	
SECTION
3.06.

	
Additional
Interest

	
 

	
23

	
 

	
 

	
 

	
 

	
SECTION
3.07.

	
Compliance
with Consolidation Provisions

	
 

	
23

	
 

	
 

	
 

	
 

	
SECTION
3.08.

	
Limitation
on Dividends

	
 

	
23

	
 

	
 

	
 

	
 

	
SECTION
3.09.

	
Covenants as
to the Trust

	
 

	
24

	
 

	
 

	
 

	
 

	
ARTICLE IV

	
LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

	
 

	
 

	
 

	
 

	
SECTION
4.01.

	
Securityholders’
Lists

	
 

	
24

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TABLE OF CONTENTS
(CONTINUED)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
SECTION
4.02.

	
Preservation
and Disclosure of Lists

	
 

	
25

	
 

	
 

	
 

	
 

	
ARTICLE V

	
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF 

DEFAULT

	
 

	
 

	
 

	
 

	
SECTION
5.01.

	
Events of
Default

	
 

	
26

	
 

	
 

	
 

	
 

	
SECTION
5.02.

	
Payment of
Debt Securities on Default; Suit Therefor

	
 

	
28

	
 

	
 

	
 

	
 

	
SECTION
5.03.

	
Application
of Moneys Collected by Trustee

	
 

	
30

	
 

	
 

	
 

	
 

	
SECTION
5.04.

	
Proceedings
by Securityholders

	
 

	
30

	
 

	
 

	
 

	
 

	
SECTION
5.05.

	
Proceedings
by Trustee

	
 

	
30

	
 

	
 

	
 

	
 

	
SECTION
5.06.

	
Remedies
Cumulative and Continuing

	
 

	
31

	
 

	
 

	
 

	
 

	
SECTION
5.07.

	
Direction of
Proceedings and Waiver of Defaults by Majority of Securityholders

	
 

	
31

	
 

	
 

	
 

	
 

	
SECTION
5.08.

	
Notice of
Defaults

	
 

	
32

	
 

	
 

	
 

	
 

	
SECTION
5.09.

	
Undertaking
to Pay Costs

	
 

	
32

	
 

	
 

	
 

	
 

	
ARTICLE VI

	
CONCERNING THE TRUSTEE

	
 

	
 

	
 

	
 

	
SECTION
6.01.

	
Duties and
Responsibilities of Trustee

	
 

	
33

	
 

	
 

	
 

	
 

	
SECTION
6.02.

	
Reliance on
Documents, Opinions, etc

	
 

	
34

	
 

	
 

	
 

	
 

	
SECTION
6.03.

	
No
Responsibility for Recitals, etc

	
 

	
35

	
 

	
 

	
 

	
 

	
SECTION
6.04.

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

	
 

	
35

	
 

	
 

	
 

	
 

	
SECTION
6.05.

	
Moneys to be
Held in Trust

	
 

	
35

	
 

	
 

	
 

	
 

	
SECTION
6.06.

	
Compensation
and Expenses of Trustee

	
 

	
36

	
 

	
 

	
 

	
 

	
SECTION
6.07.

	
Officers’
Certificate as Evidence

	
 

	
36

	
 

	
 

	
 

	
 

	
SECTION
6.08.

	
Eligibility
of Trustee

	
 

	
37

	
 

	
 

	
 

	
 

	
SECTION
6.09.

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

	
 

	
37

	
 

	
 

	
 

	
 

	
SECTION
6.10.

	
Acceptance
by Successor

	
 

	
38

	
 

	
 

	
 

	
 

	
SECTION
6.11.

	
Succession
by Merger, etc

	
 

	
39

	
 

	
 

	
 

	
 

	
SECTION
6.12.

	
Authenticating
Agents

	
 

	
40

	
 

	
 

	
 

	
 

	
ARTICLE VII

	
CONCERNING THE SECURITYHOLDERS

	
 

	
 

	
 

	
 

	
SECTION
7.01.

	
Action by
Securityholders

	
 

	
41

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TABLE OF CONTENTS
(CONTINUED)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
SECTION
7.02.

	
Proof of
Execution by Securityholders

	
 

	
42

	
 

	
 

	
 

	
 

	
SECTION
7.03.

	
Who Are
Deemed Absolute Owners

	
 

	
42

	
 

	
 

	
 

	
 

	
SECTION
7.04.

	
Debt
Securities Owned by Company Deemed Not Outstanding

	
 

	
42

	
 

	
 

	
 

	
 

	
SECTION
7.05.

	
Revocation
of Consents; Future Securityholders Bound

	
 

	
43

	
 

	
 

	
 

	
 

	
ARTICLE VIII

	
SECURITYHOLDERS’ MEETINGS

	
 

	
 

	
 

	
 

	
SECTION
8.01.

	
Purposes of
Meetings

	
 

	
43

	
 

	
 

	
 

	
 

	
SECTION
8.02.

	
Call of
Meetings by Trustee

	
 

	
44

	
 

	
 

	
 

	
 

	
SECTION
8.03.

	
Call of
Meetings by Company or Securityholders

	
 

	
44

	
 

	
 

	
 

	
 

	
SECTION
8.04.

	
Qualifications
for Voting

	
 

	
44

	
 

	
 

	
 

	
 

	
SECTION
8.05.

	
Regulations

	
 

	
44

	
 

	
 

	
 

	
 

	
SECTION
8.06.

	
Voting

	
 

	
45

	
 

	
 

	
 

	
 

	
SECTION
8.07.

	
Quorum;
Actions

	
 

	
45

	
 

	
 

	
 

	
 

	
SECTION
8.08.

	
Written
Consent Without a Meeting

	
 

	
46

	
 

	
 

	
 

	
 

	
ARTICLE IX

	
SUPPLEMENTAL INDENTURES

	
 

	
 

	
 

	
 

	
SECTION
9.01.

	
Supplemental
Indentures without Consent of Securityholders

	
 

	
46

	
 

	
 

	
 

	
 

	
SECTION
9.02.

	
Supplemental
Indentures with Consent of Securityholders

	
 

	
48

	
 

	
 

	
 

	
 

	
SECTION
9.03.

	
Effect of
Supplemental Indentures

	
 

	
49

	
 

	
 

	
 

	
 

	
SECTION
9.04.

	
Notation on
Debt Securities

	
 

	
49

	
 

	
 

	
 

	
 

	
SECTION
9.05.

	
Evidence of
Compliance of Supplemental Indenture to be furnished to Trustee

	
 

	
49

	
 

	
 

	
 

	
 

	
ARTICLE X

	
REDEMPTION OF SECURITIES

	
 

	
 

	
 

	
 

	
SECTION
10.01.

	
Optional
Redemption

	
 

	
49

	
 

	
 

	
 

	
 

	
SECTION
10.02.

	
Special
Event Redemption

	
 

	
50

	
 

	
 

	
 

	
 

	
SECTION
10.03.

	
Notice of
Redemption; Selection of Debt Securities

	
 

	
50

	
 

	
 

	
 

	
 

	
SECTION
10.04.

	
Payment of Debt
Securities Called for Redemption

	
 

	
51

	
 

	
 

	
 

	
 

	
ARTICLE XI

	
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

	
 

	
 

	
 

	
 

	
SECTION
11.01.

	
Company May
Consolidate, etc., on Certain Terms

	
 

	
51

	
 

	
 

	
 

	
 

	
SECTION
11.02.

	
Successor
Entity to be Substituted

	
 

	
52

	
 

	
 

	
 

	
 

	
SECTION
11.03.

	
Opinion of
Counsel to be Given to Trustee

	
 

	
53

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TABLE OF CONTENTS
(CONTINUED)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
ARTICLE XII

	
SATISFACTION AND DISCHARGE OF INDENTURE

	
 

	
 

	
 

	
 

	
SECTION
12.01.

	
Discharge of
Indenture

	
 

	
53

	
 

	
 

	
 

	
 

	
SECTION
12.02.

	
Deposited
Moneys to be Held in Trust by Trustee

	
 

	
53

	
 

	
 

	
 

	
 

	
SECTION
12.03.

	
Paying Agent
to Repay Moneys Held

	
 

	
54

	
 

	
 

	
 

	
 

	
SECTION
12.04.

	
Return of
Unclaimed Moneys

	
 

	
54

	
 

	
 

	
 

	
 

	
ARTICLE XIII

	
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

	
 

	
 

	
 

	
 

	
SECTION
13.01.

	
Indenture and
Debt Securities Solely Corporate Obligations

	
 

	
54

	
 

	
 

	
 

	
 

	
ARTICLE XIV

	
MISCELLANEOUS PROVISIONS

	
 

	
 

	
 

	
 

	
SECTION
14.01.

	
Successors

	
 

	
55

	
 

	
 

	
 

	
 

	
SECTION
14.02.

	
Official
Acts by Successor Entity

	
 

	
55

	
 

	
 

	
 

	
 

	
SECTION
14.03.

	
Surrender of
Company Powers

	
 

	
55

	
 

	
 

	
 

	
 

	
SECTION
14.04.

	
Addresses
for Notices, etc

	
 

	
55

	
 

	
 

	
 

	
 

	
SECTION
14.05.

	
Governing
Law

	
 

	
56

	
 

	
 

	
 

	
 

	
SECTION
14.06.

	
Evidence of
Compliance with Conditions Precedent

	
 

	
56

	
 

	
 

	
 

	
 

	
SECTION
14.07.

	
Non-Business
Days

	
 

	
56

	
 

	
 

	
 

	
 

	
SECTION
14.08.

	
Table of
Contents, Headings, etc

	
 

	
56

	
 

	
 

	
 

	
 

	
SECTION
14.09.

	
Execution in
Counterparts

	
 

	
57

	
 

	
 

	
 

	
 

	
SECTION
14.10.

	
Severability

	
 

	
57

	
 

	
 

	
 

	
 

	
SECTION
14.11.

	
Assignment

	
 

	
57

	
 

	
 

	
 

	
 

	
SECTION
14.12.

	
Acknowledgment
of Rights

	
 

	
57

	
 

	
 

	
 

	
 

	
ARTICLE XV

	
SUBORDINATION OF DEBT SECURITIES

	
 

	
 

	
 

	
 

	
SECTION
15.01.

	
Agreement to
Subordinate

	
 

	
58

	
 

	
 

	
 

	
 

	
SECTION
15.02.

	
Default on
Senior Indebtedness

	
 

	
58

	
 

	
 

	
 

	
 

	
SECTION
15.03.

	
Liquidation;
Dissolution; Bankruptcy

	
 

	
58

	
 

	
 

	
 

	
 

	
SECTION
15.04.

	
Subrogation

	
 

	
60

	
 

	
 

	
 

	
 

	
SECTION
15.05.

	
Trustee to
Effectuate Subordination

	
 

	
61

	
 

	
 

	
 

	
 

	
SECTION
15.06.

	
Notice by
the Company

	
 

	
61

	
 

	
 

	
 

	
 

	
SECTION
15.07.

	
Rights of
the Trustee, Holders of Senior Indebtedness

	
 

	
61

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TABLE OF CONTENTS
(CONTINUED)

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
SECTION
15.08.

	
Subordination
May Not Be Impaired

	
 

	
62

	
 

	
 

	
 

	
 

	
EXHIBITS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
EXHIBIT A

	
FORM OF DEBT
SECURITY

	
 

	
 

-v-

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

W I T N E S S E T H:

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

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

ARTICLE I

DEFINITIONS

          SECTION
1.01. Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

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

-2-

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

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

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

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

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

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

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

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

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

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

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

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

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

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

-3-

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

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

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

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

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

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

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

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

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

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

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

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

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

-4-

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

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

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

                    “Maturity
Date” means July 7, 2036.

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

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

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

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

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

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

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

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

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

-5-

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

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

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

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

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

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

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

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

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

-6-

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

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

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

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

	
 

	
 

	
 

	
Special Redemption During the 

12-Month Period Beginning July 7 

	
 

	
Percentage of Principal Amount 

	
 

	
 

	
 

	
2007

	
 

	
103%

	
2008

	
 

	
102%

	
2009

	
 

	
101%

	
2010 and thereafter

	
 

	
100%

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

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

-7-

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

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

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

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

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

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

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

ARTICLE II

DEBT SECURITIES

          SECTION
2.01. Authentication and Dating.

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

-8-

Chief Financial Officer or one of its Vice Presidents, without any
further action by the Company hereunder. In authenticating such Debt
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Debt Securities, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon a copy
of any Board Resolution or Board Resolutions relating thereto and, if
applicable, an appropriate record of any action taken pursuant to such
resolution, in each case certified by the Secretary or an Assistant Secretary
or other officers with appropriate delegated authority of the Company as the
case may be.

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

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

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

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

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

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

	
 

	
 

	
 

	
 

	
 

	
By

	
 

	
 

	
 

	
 

	
Authorized Officer

	
 

          SECTION
2.03. Form and Denomination of Debt Securities.

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

          SECTION
2.04. Execution of Debt Securities.

                    The
Debt Securities shall be signed in the name and on behalf of the Company by the
manual or facsimile signature of its Chairman of the Board of Directors, Vice
Chairman, President or Chief Financial Officer or one of its Executive Vice
Presidents, Senior Vice Presidents or Vice Presidents, by facsimile or
otherwise, and which need not be attested. Only such Debt Securities as shall
bear thereon a certificate of authentication substantially in the form herein
before recited, executed by the Trustee or the Authenticating Agent by the
manual 

-9-

signature of an authorized officer, shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate
by the Trustee or the Authenticating Agent upon any Debt Security executed by
the Company shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.

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

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

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

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

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

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

-10-

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

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

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

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

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

-11-

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

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

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

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

-12-

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

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

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

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

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

-13-

          SECTION
2.07. Temporary Debt Securities.

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

          SECTION
2.08. Payment of Interest.

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

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

-14-

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

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

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

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

          SECTION
2.09. Cancellation of Debt Securities Paid, etc.

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

-15-

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

          SECTION
2.10. Computation of Interest.

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

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

-16-

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

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

          SECTION
2.11. Extension of Interest Payment Period.

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

-17-

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

          SECTION
2.12. CUSIP Numbers.

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

          SECTION
2.13. Global Debentures.

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

-18-

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

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

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

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

-19-

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

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

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

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

-20-

ARTICLE III

PARTICULAR COVENANTS OF THE COMPANY

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

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

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

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

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

          SECTION
3.02. Offices for Notices and Payments, etc.

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

-21-

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

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

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

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

          SECTION
3.04. Provision as to Paying Agent.

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

-22-

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

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

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

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

          SECTION
3.05. Certificate to Trustee.

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

          SECTION
3.06. Additional Interest.

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

-23-

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

          SECTION
3.07. Compliance with Consolidation Provisions.

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

          SECTION
3.08. Limitation on Dividends.

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

-24-

          SECTION
3.09. Covenants as to the Trust.

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

ARTICLE IV

LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

          SECTION
4.01. Securityholders’ Lists.

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

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

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

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

          SECTION
4.02. Preservation and Disclosure of Lists.

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

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

-25-

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

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

          SECTION
4.03. Financial and Other Information.

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

-26-

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

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

ARTICLE V

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
DEFAULT

          SECTION
5.01. Events of Default.

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

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

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

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

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

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

-27-

insolvency or other similar law now or hereafter in effect, or appoints
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property, or orders
the winding-up or liquidation of its affairs and such decree or order shall
remain unstayed and in effect for a period of 90 consecutive days; or

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

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

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

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

-28-

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

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

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

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

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

-29-

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 

-30-

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.

-31-

          SECTION
5.05. Proceedings by Trustee.

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

          SECTION
5.06. Remedies Cumulative and Continuing.

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

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

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

-32-

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

          SECTION
5.08. Notice of Defaults.

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

          SECTION
5.09. Undertaking to Pay Costs.

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

-33-

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

ARTICLE VI

CONCERNING THE TRUSTEE

          SECTION
6.01. Duties and Responsibilities of Trustee.

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

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

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

-34-

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

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

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

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

          SECTION
6.02. Reliance on Documents, Opinions, etc.

                    Except
as otherwise provided in Section 6.01:

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

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

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

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

-35-

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

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

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

          SECTION
6.03. No Responsibility for Recitals, etc.

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

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

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

          SECTION
6.05. Moneys to be Held in Trust.

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

-36-

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

          SECTION
6.06. Compensation and Expenses of Trustee.

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

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

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

          SECTION
6.07. Officers’ Certificate as Evidence.

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

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

          SECTION
6.08. Eligibility of Trustee.

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

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

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

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

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

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

-38-

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

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

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

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

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

-39-

          SECTION
6.10. Acceptance by Successor.

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

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

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

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

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

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          SECTION
6.11. Succession by Merger, etc.

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

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

          SECTION
6.12. Authenticating Agents.

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

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

-41-

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

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

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

ARTICLE VII

CONCERNING THE SECURITYHOLDERS

          SECTION
7.01. Action by Securityholders.

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

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

-42-

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

          SECTION
7.02. Proof of Execution by Securityholders.

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

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

          SECTION
7.03. Who Are Deemed Absolute Owners.

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

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

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

-43-

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

          SECTION
7.05. Revocation of Consents; Future Securityholders Bound.

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

ARTICLE VIII

SECURITYHOLDERS’ MEETINGS

          SECTION
8.01. Purposes of Meetings.

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

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

-44-

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

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

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

          SECTION
8.02. Call of Meetings by Trustee.

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

          SECTION
8.03. Call of Meetings by Company or Securityholders.

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

          SECTION
8.04. Qualifications for Voting.

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

          SECTION
8.05. Regulations.

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

-45-

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

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

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

          SECTION
8.06. Voting.

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

          SECTION
8.07. Quorum; Actions.

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

-46-

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.

-47-

ARTICLE IX

SUPPLEMENTAL INDENTURES

          SECTION
9.01. Supplemental Indentures without Consent of Securityholders.

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

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

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

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

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

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

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

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

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

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

          SECTION
9.02. Supplemental Indentures with Consent of Securityholders.

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

-49-

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

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

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

          SECTION
9.03. Effect of Supplemental Indentures.

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

          SECTION
9.04. Notation on Debt Securities.

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

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

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

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

ARTICLE X

REDEMPTION OF SECURITIES

          SECTION
10.01. Optional Redemption.

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

          SECTION
10.02. Special Event Redemption.

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

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

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

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

-51-

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

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

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

          SECTION
10.04. Payment of Debt Securities Called for Redemption.

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

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

ARTICLE XI

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

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

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

-52-

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

          SECTION
11.02. Successor Entity to be Substituted.

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

-53-

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

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

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

ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE

          SECTION
12.01. Discharge of Indenture.

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

-54-

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 

-55-

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

ARTICLE XIV

MISCELLANEOUS PROVISIONS

          SECTION
14.01. Successors.

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

          SECTION
14.02. Official Acts by Successor Entity.

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

          SECTION
14.03. Surrender of Company Powers.

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

          SECTION
14.04. Addresses for Notices, etc.

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

Codorus Valley Bancorp, Inc.

105 Leader Heights Road

York, PA 17403

Attention: Jann Allen Weaver

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

919 Market Street

Suite 700

Wilmington, DE 19801

Attention: Corporate Trust Division

-56-

          SECTION
14.05. Governing Law.

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

          SECTION
14.06. Evidence of Compliance with Conditions Precedent.

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

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

          SECTION
14.07. Non-Business Days.

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

          SECTION
14.08. Table of Contents, Headings, etc.

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

-57-

          SECTION
14.09. Execution in Counterparts.

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

          SECTION
14.10. Severability.

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

          SECTION
14.11. Assignment.

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

          SECTION
14.12. Acknowledgment of Rights.

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

-58-

ARTICLE XV

SUBORDINATION OF DEBT SECURITIES

          SECTION
15.01. Agreement to Subordinate.

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

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

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

          SECTION
15.02. Default on Senior Indebtedness.

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

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

          SECTION
15.03. Liquidation; Dissolution; Bankruptcy.

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

-59-

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

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

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

-60-

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.

-61-

          SECTION
15.05. Trustee to Effectuate Subordination.

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

          SECTION
15.06. Notice by the Company.

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

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

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

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

-62-

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

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

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

          SECTION
15.08. Subordination May Not Be Impaired.

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

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

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

-63-

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

	
 

	
 

	
 

	
 

	
 

	
 

	
Codorus Valley Bancorp, Inc.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
Name: 

	
 

	
 

	
Title: 

	
 

	
 

	
 

	
 

	
 

	
Wells Fargo Bank, National Association, as 

Trustee

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
Name:

	
 

	
 

	
Title:

	
 

-64-

EXHIBIT A

FORM OF JUNIOR SUBORDINATED DEBT SECURITY

DUE 2036

[FORM OF FACE OF SECURITY]

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

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

A-1

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

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

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

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

A-2

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

A-3

Form of Junior Subordinated Debt Security due
2036

of

Codorus Valley Bancorp, Inc.

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

A-4

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

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

A-5

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

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

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

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

A-6

                    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.

A-7

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

	
 

	
 

	
 

	
 

	
 

	
 

	
Codorus Valley Bancorp, Inc.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
Name: 

	
 

	
 

	
Title: 

	
 

Dated:__________________, 2006

CERTIFICATE OF AUTHENTICATION

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	
Authorized Officer

Dated:__________________, 2006

A-8

[FORM OF REVERSE OF SECURITY]

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

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

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

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

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

A-9

	
 

	
 

	
 

	
Special Redemption During the 

12-Month Period Beginning July 7 

	
 

	
Percentage of Principal Amount 

	
 

	
 

	
 

	
2007

	
 

	
103%

	
2008

	
 

	
102%

	
2009

	
 

	
101%

	
2010 and thereafter

	
 

	
100%

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

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

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

A-10

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

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

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

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

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

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

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

A-11Exhibit 10.5

GUARANTEE AGREEMENT

CODORUS VALLEY BANCORP, INC.

Dated as of June 28, 2006

TABLE OF CONTENTS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 
	
 ARTICLE I

 DEFINITIONS AND INTERPRETATION

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 1.1.

 	
  

 	
 Definitions
 and Interpretation

 	
  

 	
 1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II

 POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 2.1.

 	
  

 	
 Powers and
 Duties of the Guarantee Trustee

 	
  

 	
 4

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 2.2.

 	
  

 	
 Certain
 Rights of the Guarantee Trustee

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 2.3.

 	
  

 	
 Not
 Responsible for Recitals or Issuance of Guarantee

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 2.4.

 	
  

 	
 Events of
 Default; Waiver

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 2.5.

 	
  

 	
 Events of
 Default; Notice

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 THE GUARANTEE TRUSTEE

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 3.1.

 	
  

 	
 The
 Guarantee Trustee; Eligibility

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 3.2.

 	
  

 	
 Appointment,
 Removal and Resignation of the Guarantee Trustee

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 GUARANTEE

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 4.1.

 	
  

 	
 Guarantee

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 4.2.

 	
  

 	
 Waiver of
 Notice and Demand

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 4.3.

 	
  

 	
 Obligations
 Not Affected

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 4.4.

 	
  

 	
 Rights of
 Holders

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 4.5.

 	
  

 	
 Guarantee of
 Payment

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 4.6.

 	
  

 	
 Subrogation

 	
  

 	
 11

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 4.7.

 	
  

 	
 Independent
 Obligations

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 4.8.

 	
  

 	
 Enforcement

 	
  

 	
 12

 

-i-

TABLE OF CONTENTS
(continued)

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 
	
 ARTICLE V

 LIMITATION OF TRANSACTIONS; SUBORDINATION

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 5.1.

 	
  

 	
 Limitation
 of Transactions

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 5.2.

 	
  

 	
 Ranking

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 TERMINATION

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 6.1.

 	
  

 	
 Termination

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII

 INDEMNIFICATION

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 7.1.

 	
  

 	
 Exculpation

 	
  

 	
 14

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 7.2.

 	
  

 	
 Indemnification

 	
  

 	
 14

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 7.3.

 	
  

 	
 Compensation;
 Reimbursement of Expenses

 	
  

 	
 15

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII

 MISCELLANEOUS

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 8.1.

 	
  

 	
 Successors
 and Assigns

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 8.2.

 	
  

 	
 Amendments

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 8.3.

 	
  

 	
 Notices

 	
  

 	
 16

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 8.4.

 	
  

 	
 Benefit

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 8.5.

 	
  

 	
 Governing
 Law

 	
  

 	
 17

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SECTION 8.6.

 	
  

 	
 Counterparts

 	
  

 	
 17

 

-ii-

GUARANTEE AGREEMENT

                    This
GUARANTEE AGREEMENT (the “Guarantee”), dated as of June 28, 2006, is executed
and delivered by Codorus Valley Bancorp, Inc., incorporated in Pennsylvania
(the “Guarantor”), and Wells Fargo Bank, National Association, a national
banking association with its principal place of business in the State of
Delaware, as trustee (the “Guarantee Trustee”), for the benefit of the Holders
(as defined herein) from time to time of the Capital Securities (as defined
herein) of CVB Statutory Trust No. 2, a Delaware statutory trust (the
“Issuer”).

                    WHEREAS,
pursuant to an Amended and Restated Declaration of Trust (the “Declaration”),
dated as of June 28, 2006, among the administrators and trustees named therein
of the Issuer, Codorus Valley Bancorp, Inc., as sponsor, and the Holders from
time to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof securities, having an aggregate
liquidation amount of up to $7,000,000, designated the Capital Securities (the
“Capital Securities”); and

                    WHEREAS,
as incentive for the Holders to purchase the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Guarantee, to pay to the Holders of Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms
and conditions set forth herein.

                    NOW,
THEREFORE, in consideration of the purchase by each Holder of the Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit
of the Holders.

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1. Definitions and Interpretation.

                    In
this Guarantee, unless the context otherwise requires:

	
  

 	
  

 
	
  

 	
           (a)          capitalized
 terms used in this Guarantee but not defined in the preamble above have the
 respective meanings assigned to them in this Section 1.1;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (d)          all
 references in this Guarantee to Articles and Sections are to Articles and
 Sections of this Guarantee, unless otherwise specified;

 
	
  

 	
  

 
	
  

 	
           (e)          terms
 defined in the Declaration as of the date of execution of this Guarantee have
 the same meanings when used in this Guarantee, unless otherwise defined in
 this Guarantee or unless the context otherwise requires; and

 

	
  

 	
  

 
	
  

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

 

                    “Beneficiaries”
means any Person to whom the Issuer is or hereafter becomes indebted or liable.

                    “Corporate
Trust Office” means the office of the Guarantee Trustee at which the corporate
trust business of the Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Guarantee is located at 919 Market Street, Suite 700, Wilmington, DE 19801.

                    “Covered
Person” means any Holder of Capital Securities.

                    “Debentures”
means the junior subordinated debentures of Codorus Valley Bancorp, Inc.,
designated the Junior Subordinated Debt Securities due 2036, held by the
Institutional Trustee (as defined in the Declaration) of the Issuer.

                    “Event
of Default” has the meaning set forth in Section 2.4.

                    “Guarantee
Payments” means the following payments or distributions, without duplication,
with respect to the Capital Securities, to the extent not paid or made by the
Issuer: (i) any accrued and unpaid Distributions (as defined in the
Declaration) which are required to be paid on such Capital Securities to the
extent the Issuer has funds available in the Property Account (as defined in
the Declaration) therefor at such time, (ii) the Redemption Price (as defined
in the Indenture) to the extent the Issuer has funds available in the Property
Account therefor at such time, with respect to any Capital Securities called
for redemption by the Issuer, (iii) the Special Redemption Price (as defined in
the Indenture) to the extent the Issuer has funds available in the Property
Account therefor at such time, with respect to Capital Securities called for
redemption upon the occurrence of a Special Event (as defined in the
Indenture), and (iv) upon a voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Issuer (other than in connection
with the distribution of Debentures to the Holders of the Capital Securities in
exchange therefor as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Capital Securities to the date of payment, to the extent the Issuer has
funds available in the Property Account therefor at such time, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer after satisfaction of liabilities to creditors of
the Issuer as required by applicable law (in either case, the “Liquidation
Distribution”).

                    “Guarantee
Trustee” means Wells Fargo Bank, National Association, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.

                    “Holder”
means any holder, as registered on the books and records of the Issuer, of any
Capital Securities; provided, however, that, in determining whether the holders
of the requisite percentage of Capital Securities have given any request,
notice, consent or waiver hereunder, “Holder” shall not include the Guarantor
or any Affiliate of the Guarantor.

                    “Indemnified
Person” means the Guarantee Trustee (including in its individual capacity), any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders, 

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members, partners, employees, representatives, nominees, custodians or
agents of the Guarantee Trustee.

                    “Indenture”
means the Indenture, dated as of June 28, 2006, between the Guarantor and Wells
Fargo Bank, National Association, not in its individual capacity but solely as
trustee, and any indenture supplemental thereto pursuant to which the
Debentures are to be issued to the Institutional Trustee of the Issuer.

                    “Liquidation
Distribution” has the meaning set forth in the definition of “Guarantee Payments”
herein.

                    “Majority
in liquidation amount of the Capital Securities” means Holder(s) of outstanding
Capital Securities, voting together as a class, but separately from the holders
of Common Securities, of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to, but excluding, the date
upon which the voting percentages are determined) of all Capital Securities then
outstanding.

                    “Obligations”
means any costs, expenses or liabilities (but not including liabilities related
to taxes) of the Issuer, other than obligations of the Issuer to pay to holders
of any Trust Securities the amounts due such holders pursuant to the terms of
the Trust Securities.

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (c)          a
 statement that each such officer has made such examination or investigation
 as, in such officer’s opinion, is necessary to enable such officer to express
 an informed opinion as to whether or not such covenant or condition has been
 complied with; and

 
	
  

 	
  

 
	
  

 	
           (d)          a
 statement as to whether, in the opinion of each such officer, such condition
 or covenant has been complied with.

 

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

                    “Responsible
Officer” means, with respect to the Guarantee Trustee, any officer within the
Corporate Trust Office of the Guarantee Trustee with direct responsibility for
the administration of any matters relating to this Guarantee, including any
vice president, any 

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assistant vice president, any secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or other officer of the
Corporate Trust Office of the Guarantee 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.

                    “Successor
Guarantee Trustee” means a successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 3.1.

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

ARTICLE II

POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 2.1. Powers and Duties of the Guarantee Trustee.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (a)          This
 Guarantee shall be held by the Guarantee Trustee for the benefit of the
 Holders of the Capital Securities, and the Guarantee Trustee shall not
 transfer this Guarantee to any Person except a Holder of Capital Securities
 exercising his or her rights pursuant to Section 4.4(b) or to a Successor
 Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
 appointment to act as Successor Guarantee Trustee. The right, title and
 interest of the Guarantee Trustee shall automatically vest in any Successor
 Guarantee Trustee, and such vesting and cessation of title shall be effective
 whether or not conveyancing documents have been executed and delivered
 pursuant to the appointment of such Successor Guarantee Trustee.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (b)          If
 an Event of Default actually known to a Responsible Officer of the Guarantee
 Trustee has occurred and is continuing, the Guarantee Trustee shall enforce
 this Guarantee for the benefit of the Holders of the Capital Securities.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (c)          The
 Guarantee Trustee, before the occurrence of any Event of Default and after
 the curing or waiving of all Events of Default that may have occurred, shall
 undertake to perform only such duties as are specifically set forth in this
 Guarantee, and no implied covenants shall be read into this Guarantee against
 the Guarantee Trustee. In case an Event of Default has occurred (that has not
 been cured or waived pursuant to Section 2.4(b)) and is actually known to a
 Responsible Officer of the Guarantee Trustee, the Guarantee Trustee shall
 exercise such of the rights and powers vested in it by this Guarantee, and
 use the same degree of care and skill in its exercise thereof, as a prudent
 person would exercise or use under the circumstances in the conduct of his or
 her own affairs.

 
	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (i)          prior
 to the occurrence of any Event of Default and after the curing or waiving of
 all Events of Default that may have occurred:

 

- 4 -

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
                (B)          in
 the absence of bad faith on the part of the Guarantee Trustee, the Guarantee
 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 Guarantee Trustee and conforming to the
 requirements of this Guarantee; but in the case of any such certificates or
 opinions furnished to the Guarantee Trustee, the Guarantee Trustee shall be
 under a duty to examine the same to determine whether or not on their face
 they conform to the requirements of this Guarantee;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (iii)          the
 Guarantee 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 written
 direction of the Holders of not less than a Majority in liquidation amount of
 the Capital Securities relating to the time, method and place of conducting
 any proceeding for any remedy available to the Guarantee Trustee, or
 exercising any trust or power conferred upon the Guarantee Trustee under this
 Guarantee; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (iv)          no
 provision of this Guarantee shall require the Guarantee Trustee to expend or
 risk its own funds or otherwise incur personal financial liability in the
 performance of any of its duties or in the exercise of any of its rights or
 powers, if the Guarantee Trustee shall have reasonable grounds for believing
 that the repayment of such funds is not reasonably assured to it under the
 terms of this Guarantee, or security and indemnity, reasonably satisfactory
 to the Guarantee Trustee, against such risk or liability is not reasonably
 assured to it.

 
	
  

 	
  

 	
  

 
	
 SECTION 2.2.
 Certain Rights of the Guarantee Trustee.

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)          Subject
 to the provisions of Section 2.1:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (i)          The
 Guarantee 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, direction, consent,
 order, bond, debenture, note, other evidence of indebtedness or other paper
 or document believed by it to be genuine and to have been signed, sent or
 presented by the proper party or parties.

 

- 5 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (ii)          Any
 direction or act of the Guarantor contemplated by this Guarantee shall be
 sufficiently evidenced by an Officer’s Certificate.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (iii)          Whenever,
 in the administration of this Guarantee, the Guarantee Trustee shall deem it
 desirable that a matter be proved or established before taking, suffering or
 omitting any action hereunder, the Guarantee Trustee (unless other evidence
 is herein specifically prescribed) may, in the absence of bad faith on its
 part, request and conclusively rely upon an Officer’s Certificate of the
 Guarantor which, upon receipt of such request, shall be promptly delivered by
 the Guarantor.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (iv)          The
 Guarantee Trustee shall have no duty to see to any recording, filing or
 registration of any instrument or other writing (or any rerecording, refiling
 or reregistration thereof).

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (v)          The
 Guarantee Trustee may consult with counsel of its selection, and the advice
 or opinion of such counsel with respect to legal matters 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. Such counsel may be counsel to the Guarantor or any of its
 Affiliates and may include any of its employees. The Guarantee Trustee shall
 have the right at any time to seek instructions concerning the administration
 of this Guarantee from any court of competent jurisdiction.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (vi)          The
 Guarantee Trustee shall be under no obligation to exercise any of the rights
 or powers vested in it by this Guarantee at the request or direction of any
 Holder, unless such Holder shall have provided to the Guarantee Trustee such
 security and indemnity, reasonably satisfactory to the Guarantee Trustee,
 against the costs, expenses (including attorneys’ fees and expenses and the
 expenses of the Guarantee Trustee’s agents, nominees or custodians) and
 liabilities that might be incurred by it in complying with such request or
 direction, including such reasonable advances as may be requested by the
 Guarantee Trustee; provided, however, that nothing contained in
 this Section 2.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon
 the occurrence of an Event of Default, of its obligation to exercise the
 rights and powers vested in it by this Guarantee.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (vii)          The
 Guarantee 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, direction, consent, order, bond, debenture,
 note, other evidence of indebtedness or other paper or document, but the
 Guarantee Trustee, in its discretion, may make such further inquiry or
 investigation into such facts or matters as it may see fit.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (viii)         The
 Guarantee Trustee may execute any of the trusts or powers hereunder or
 perform any duties hereunder either directly or by or through agents,
 nominees, custodians or attorneys, and the Guarantee Trustee shall not be 

 

- 6 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 responsible for any misconduct or negligence on the part of any agent
 or attorney appointed with due care by it hereunder.

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (x)          Whenever
 in the administration of this Guarantee the Guarantee Trustee shall deem it
 desirable to receive instructions with respect to enforcing any remedy or
 right or taking any other action hereunder, the Guarantee Trustee (A) may
 request instructions from the Holders of a Majority in liquidation amount of
 the Capital Securities, (B) may refrain from enforcing such remedy or right
 or taking such other action until such instructions are received and (C)
 shall be protected in conclusively relying on or acting in accordance with
 such instructions.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (xi)          The
 Guarantee Trustee shall not be liable for any action taken, suffered, or
 omitted to be taken 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 Guarantee.

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 SECTION 2.3. Not Responsible for Recitals or Issuance of Guarantee.

 
	
  

 	
  

 	
  

 
	
                     The
 recitals contained in this Guarantee shall be taken as the statements of the Guarantor,
 and the Guarantee Trustee does not assume any responsibility for their
 correctness. The Guarantee Trustee makes no representation as to the validity
 or sufficiency of this Guarantee.

 
	
  

 	
  

 	
  

 
	
 SECTION 2.4. Events of Default; Waiver.

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)          An
 Event of Default under this Guarantee will occur upon the failure of the
 Guarantor to perform any of its payment or other obligations hereunder.

 
	
  

 	
  

 	
  

 
	
  

 	
           (b)          The
 Holders of a Majority in liquidation amount of the Capital Securities may,
 voting or consenting as a class, on behalf of the Holders of all of the
 Capital Securities, waive any past Event of Default and its consequences.
 Upon such waiver, any 

 

- 7 -

	
  

 	
  

 	
  

 
	
  

 	
 such Event of Default shall cease to exist, and shall be deemed to
 have been cured, for every purpose of this Guarantee, but no such waiver
 shall extend to any subsequent or other default or Event of Default or impair
 any right consequent thereon.

 
	
  

 	
  

 	
  

 
	
 SECTION 2.5. Events of Default; Notice.

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)          The
 Guarantee Trustee shall, within 90 days after the occurrence of an Event of
 Default, transmit by mail, first class postage prepaid, to the Holders of the
 Capital Securities, notices of all Events of Default actually known to a
 Responsible Officer of the Guarantee Trustee, unless such defaults have been
 cured before the giving of such notice, provided, however, that
 the Guarantee Trustee shall be protected in withholding such notice if and so
 long as a Responsible Officer of the Guarantee Trustee in good faith
 determines that the withholding of such notice is in the interests of the
 Holders of the Capital Securities.

 
	
  

 	
  

 	
  

 
	
  

 	
           (b)          The
 Guarantee Trustee shall not be charged with knowledge of any Event of Default
 unless the Guarantee Trustee shall have received written notice thereof from
 the Guarantor or a Holder of the Capital Securities, or a Responsible Officer
 of the Guarantee Trustee charged with the administration of this Guarantee
 shall have actual knowledge thereof.

 

ARTICLE III

THE GUARANTEE TRUSTEE

SECTION 3.1. The Guarantee
Trustee; Eligibility.

	
  

 	
  

 	
  

 
	
  

 	
           (a)          There
 shall at all times be a Guarantee Trustee which shall:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (i)          not
 be an Affiliate of the Guarantor; and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
                (ii)         be
 a corporation or national association organized and doing business under the
 laws of the United States of America or any state or territory thereof or of
 the District of Columbia, or Person 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, territorial or District of Columbia authority.
 If such corporation or national association publishes reports of condition at
 least annually, pursuant to law or to the requirements of the supervising or
 examining authority referred to above, then, for the purposes of this Section
 3.1(a)(ii), the combined capital and surplus of such corporation or national
 association shall be deemed to be its combined capital and surplus as set
 forth in its most recent report of condition so published.

 
	
  

 	
  

 	
  

 
	
  

 	
           (b)          If
 at any time the Guarantee Trustee shall cease to be eligible to so act under
 Section 3.1(a), the Guarantee Trustee shall immediately resign in the manner
 and with the effect set forth in Section 3.2(c).

 

- 8 -

	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
 SECTION 3.2. Appointment, Removal and Resignation of the Guarantee
 Trustee.

 
	
  

 	
  

 	
  

 
	
  

 	
           (a)          Subject
 to Section 3.2(b), the Guarantee Trustee may be appointed or removed without
 cause at any time by the Guarantor except during an Event of Default.

 
	
  

 	
  

 	
  

 
	
  

 	
           (b)          The
 Guarantee Trustee shall not be removed in accordance with Section 3.2(a)
 until a Successor Guarantee Trustee has been appointed and has accepted such
 appointment by written instrument executed by such Successor Guarantee
 Trustee and delivered to the Guarantor.

 
	
  

 	
  

 	
  

 
	
  

 	
           (c)          The
 Guarantee Trustee appointed to office shall hold office until a Successor
 Guarantee Trustee shall have been appointed or until its removal or
 resignation. The Guarantee Trustee may resign from office (without need for
 prior or subsequent accounting) by an instrument in writing executed by the
 Guarantee Trustee and delivered to the Guarantor, which resignation shall not
 take effect until a Successor Guarantee Trustee has been appointed and has
 accepted such appointment by an instrument in writing executed by such
 Successor Guarantee Trustee and delivered to the Guarantor and the resigning
 Guarantee Trustee.

 
	
  

 	
  

 	
  

 
	
  

 	
           (d)          If
 no Successor Guarantee Trustee shall have been appointed and accepted
 appointment as provided in this Section 3.2 within 60 days after delivery of
 an instrument of removal or resignation, the Guarantee Trustee resigning or
 being removed may petition any court of competent jurisdiction for
 appointment of a Successor Guarantee Trustee. Such court may thereupon, after
 prescribing such notice, if any, as it may deem proper, appoint a Successor
 Guarantee Trustee.

 
	
  

 	
  

 	
  

 
	
  

 	
           (e)          No
 Guarantee Trustee shall be liable for the acts or omissions to act of any
 Successor Guarantee Trustee.

 
	
  

 	
  

 	
  

 
	
  

 	
           (f)          Upon
 termination of this Guarantee or removal or resignation of the Guarantee
 Trustee pursuant to this Section 3.2, the Guarantor shall pay to the
 Guarantee Trustee all amounts owing to the Guarantee Trustee under Sections
 7.2 and 7.3 accrued to the date of such termination, removal or resignation.

 

ARTICLE IV

GUARANTEE

SECTION 4.1. Guarantee.

	
  

 	
  

 
	
  

 	
           (a)          The
 Guarantor irrevocably and unconditionally agrees to pay in full to the
 Holders the Guarantee Payments (without duplication of amounts theretofore
 paid by the Issuer), as and when due, regardless of any defense (except as
 defense of payment by the Issuer), right of set-off or counterclaim that the
 Issuer may have or assert. The 

 

- 9 -

	
  

 	
  

 
	
  

 	
 Guarantor’s obligation to make a Guarantee Payment may be satisfied
 by direct payment of the required amounts by the Guarantor to the Holders or
 by causing the Issuer to pay such amounts to the Holders.

 
	
  

 	
  

 
	
  

 	
           (b)          The
 Guarantor hereby also agrees to assume any and all Obligations of the Issuer
 and in the event any such Obligation is not so assumed, subject to the terms
 and conditions hereof, the Guarantor hereby irrevocably and unconditionally
 guarantees to each Beneficiary the full payment, when and as due, of any and
 all Obligations to such Beneficiaries. This Guarantee is intended to be for
 the Beneficiaries who have received notice hereof.

 
	
  

 	
  

 
	
 SECTION 4.2. Waiver of Notice and Demand.

 
	
  

 	
  

 
	
                     The
 Guarantor hereby waives notice of acceptance of this Guarantee and of any
 liability to which it applies or may apply, presentment, demand for payment,
 any right to require a proceeding first against the Issuer or any other
 Person before proceeding against the Guarantor, protest, notice of
 nonpayment, notice of dishonor, notice of redemption and all other notices
 and demands.

 
	
  

 	
  

 
	
 SECTION 4.3. Obligations Not Affected.

 
	
  

 	
  

 
	
                     The
 obligations, covenants, agreements and duties of the Guarantor under this
 Guarantee shall in no way be affected or impaired by reason of the happening
 from time to time of any of the following:

 
	
  

 	
  

 
	
  

 	
           (a)          the
 release or waiver, by operation of law or otherwise, of the performance or
 observance by the Issuer of any express or implied agreement, covenant, term
 or condition relating to the Capital Securities to be performed or observed
 by the Issuer;

 
	
  

 	
  

 
	
  

 	
           (b)          the
 extension of time for the payment by the Issuer of all or any portion of the
 Distributions, Redemption Price, Special Redemption Price, Liquidation
 Distribution or any other sums payable under the terms of the Capital
 Securities or the extension of time for the performance of any other
 obligation under, arising out of, or in connection with, the Capital
 Securities (other than an extension of time for the payment of the
 Distributions, Redemption Price, Special Redemption Price, Liquidation
 Distribution or other sums payable that results from the extension of any
 interest payment period on the Debentures or any extension of the maturity
 date of the Debentures permitted by the Indenture);

 
	
  

 	
  

 
	
  

 	
           (c)          any
 failure, omission, delay or lack of diligence on the part of the Holders to
 enforce, assert or exercise any right, privilege, power or remedy conferred
 on the Holders pursuant to the terms of the Capital Securities, or any action
 on the part of the Issuer granting indulgence or extension of any kind;

 
	
  

 	
  

 
	
  

 	
           (d)          the
 voluntary or involuntary liquidation, dissolution, sale of any collateral,
 receivership, insolvency, bankruptcy, assignment for the benefit of
 creditors, reorganization, arrangement, composition or readjustment of debt
 of, or other similar proceedings affecting, the Issuer or any of the assets
 of the Issuer;

 

- 10 -

	
  

 	
  

 
	
  

 	
           (e)          any
 invalidity of, or defect or deficiency in, the Capital Securities;

 
	
  

 	
  

 
	
  

 	
           (f)          the
 settlement or compromise of any obligation guaranteed hereby or hereby
 incurred; or

 
	
  

 	
  

 
	
  

 	
           (g)          any
 other circumstance whatsoever that might otherwise constitute a legal or
 equitable discharge or defense of a guarantor, it being the intent of this
 Section 4.3 that the obligations of the Guarantor hereunder shall be absolute
 and unconditional under any and all circumstances.

 
	
  

 	
  

 
	
                     There
 shall be no obligation of the Holders to give notice to, or obtain consent
 of, the Guarantor with respect to the happening of any of the foregoing.

 
	
  

 	
  

 
	
 SECTION 4.4. Rights of Holders.

 
	
  

 	
  

 
	
  

 	
           (a)          The
 Holders of a Majority in liquidation amount of the Capital Securities have
 the right to direct the time, method and place of conducting any proceeding
 for any remedy available to the Guarantee Trustee in respect of this
 Guarantee or to direct the exercise of any trust or power conferred upon the
 Guarantee Trustee under this Guarantee; provided, however, that
 (subject to Sections 2.1 and 2.2) the Guarantee Trustee shall have the right
 to decline to follow any such direction if the Guarantee Trustee shall
 determine that the actions so directed would be unjustly prejudicial to the
 Holders not taking part in such direction or if the Guarantee Trustee being
 advised by legal counsel determines that the action or proceeding so directed
 may not lawfully be taken or if the Guarantee Trustee in good faith by its
 board of directors or trustees, executive committee or a trust committee of
 directors or trustees and/or Responsible Officers shall determine that the
 action or proceeding so directed would involve the Guarantee Trustee in
 personal liability.

 
	
  

 	
  

 
	
  

 	
           (b)          Any
 Holder of Capital Securities may institute a legal proceeding directly
 against the Guarantor to enforce the Guarantee Trustee’s rights under this
 Guarantee, without first instituting a legal proceeding against the Issuer,
 the Guarantee Trustee or any other Person. The Guarantor waives any right or
 remedy to require that any such action be brought first against the Issuer,
 the Guarantee Trustee or any other Person before so proceeding directly
 against the Guarantor.

 

SECTION 4.5. Guarantee of Payment.

                    This
Guarantee creates a guarantee of payment and not of collection.

SECTION 4.6. Subrogation.

                    The
Guarantor shall be subrogated to all (if any) rights of the Holders of Capital
Securities against the Issuer in respect of any amounts paid to such Holders by
the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by applicable provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee, if, after giving effect to any such
payment, any 

- 11 -

amounts are due and unpaid under this Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

SECTION 4.7. Independent Obligations.

                    The
Guarantor acknowledges that its obligations hereunder are independent of the
obligations of the Issuer with respect to the Capital Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 4.3 hereof.

SECTION 4.8. Enforcement.

                    A
Beneficiary may enforce the Obligations of the Guarantor contained in Section
4.1 (b) directly against the Guarantor, and the Guarantor waives any right or
remedy to require that any action be brought against the Issuer or any other
person or entity before proceeding against the Guarantor.

                    The
Guarantor shall be subrogated to all rights (if any) of any Beneficiary against
the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor
under this Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by applicable provisions of law) be entitled
to enforce or exercise any rights that it may acquire by way of subrogation or
any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee, if, after giving effect to such payment, any
amounts are due and unpaid under this Guarantee.

ARTICLE V

LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1. Limitation of Transactions.

                    So
long as any Capital Securities remain outstanding, if (a) there shall have
occurred and be continuing an Event of Default or (b) the Guarantor shall have
selected an Extension Period as provided in the Declaration and such period, or
any extension thereof, shall have commenced and be continuing, then the
Guarantor may not (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Guarantor’s capital stock or (y) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Guarantor that rank pari
passu in all respects with or junior in interest to the Debentures
(other than (i) payments under this Guarantee, (ii) repurchases, redemptions or
other acquisitions of shares of capital stock of the Guarantor (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 Guarantor (or securities convertible into or exercisable for such capital
stock), as consideration in an acquisition transaction entered into prior to
the occurrence of the Event of Default or the applicable Extension Period,
(iii) as a result of any exchange, reclassification, combination or 

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conversion of any class or series of the Guarantor’s capital stock (or
any capital stock of a subsidiary of the Guarantor) for any class or series of
the Guarantor’s capital stock or of any class or series of the Guarantor’s
indebtedness for any class or series of the Guarantor’s capital stock, (iv) the
purchase of fractional interests in shares of the Guarantor’s capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (v) 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 (vi) 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 5.2. Ranking.

                    This
Guarantee will constitute an unsecured obligation of the Guarantor and will
rank subordinate and junior in right of payment to all present and future
Senior Indebtedness (as defined in the Indenture) of the Guarantor. By their
acceptance thereof, each Holder of Capital Securities agrees to the foregoing
provisions of this Guarantee and the other terms set forth herein.

                    The
right of the Guarantor to participate in any distribution of assets of any of
its subsidiaries upon any such subsidiary’s liquidation or reorganization or
otherwise is subject to the prior claims of creditors of that subsidiary,
except to the extent the Guarantor may itself be recognized as a creditor of
that subsidiary. Accordingly, the Guarantor’s obligations under this Guarantee
will be effectively subordinated to all existing and future liabilities of the
Guarantor’s subsidiaries, and claimants should look only to the assets of the
Guarantor for payments thereunder. This Guarantee does not limit the incurrence
or issuance of other secured or unsecured debt of the Guarantor, including Senior
Indebtedness of the Guarantor, under any indenture or agreement that the
Guarantor may enter into in the future or otherwise.

ARTICLE VI

TERMINATION

SECTION 6.1. Termination.

                    This
Guarantee shall terminate as to the Capital Securities (i) upon full payment of
the Redemption Price or the Special Redemption Price, as the case may be, of
all Capital Securities then outstanding, (ii) upon the distribution of all of
the Debentures to the Holders of all of the Capital Securities or (iii) upon
full payment of the amounts payable in accordance with the Declaration upon
dissolution of the Issuer. This Guarantee will continue to be effective or will
be reinstated, as the case may be, if at any time any Holder of Capital
Securities must restore payment of any sums paid under the Capital Securities
or under this Guarantee.

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ARTICLE VII

INDEMNIFICATION

SECTION 7.1. Exculpation.

	
  

 	
  

 
	
  

 	
           (a)          No
 Indemnified Person shall be liable, responsible or accountable in damages or
 otherwise to the Guarantor or any Covered Person for any loss, damage or
 claim incurred by reason of any act or omission of such Indemnified Person in
 good faith in accordance with this Guarantee and in a manner that such
 Indemnified Person reasonably believed to be within the scope of the
 authority conferred on such Indemnified Person by this Guarantee or by law,
 except that an Indemnified Person shall be liable for any such loss, damage
 or claim incurred by reason of such Indemnified Person’s negligence or willful
 misconduct with respect to such acts or omissions.

 
	
  

 	
  

 
	
  

 	
           (b)          An
 Indemnified Person shall be fully protected in relying in good faith upon the
 records of the Issuer or the Guarantor and upon such information, opinions,
 reports or statements presented to the Issuer or the Guarantor by any Person
 as to matters the Indemnified Person reasonably believes are within such
 other Person’s professional or expert competence and who, if selected by such
 Indemnified Person, has been selected with reasonable care by such
 Indemnified Person, including information, opinions, reports or statements as
 to the value and amount of the assets, liabilities, profits, losses, or any
 other facts pertinent to the existence and amount of assets from which Distributions
 to Holders of Capital Securities might properly be paid.

 
	
  

 	
  

 
	
 SECTION 7.2. Indemnification.

 
	
  

 	
  

 
	
  

 	
           (a)          The
 Guarantor agrees to indemnify each Indemnified Person for, and to hold each
 Indemnified Person harmless against, any and all loss, liability, damage,
 claim or expense incurred without negligence or willful misconduct on the
 part of the Indemnified Person, arising out of or in connection with the
 acceptance or administration of the trust or trusts hereunder, including but
 not limited to the costs and expenses (including reasonable legal fees and
 expenses) of the Indemnified Person defending itself against, or
 investigating, any claim or liability in connection with the exercise or
 performance of any of the Indemnified Person’s powers or duties hereunder.
 The obligation to indemnify as set forth in this Section 7.2 shall survive
 the resignation or removal of the Guarantee Trustee and the termination of
 this Guarantee.

 
	
  

 	
  

 
	
  

 	
           (b)          Promptly
 after receipt by an Indemnified Person under this Section 7.2 of notice of
 the commencement of any action, such Indemnified Person will, if a claim in
 respect thereof is to be made against the Guarantor under this Section 7.2,
 notify the Guarantor in writing of the commencement thereof; but the failure
 so to notify the Guarantor (i) will not relieve the Guarantor from liability
 under paragraph (a) above unless and to the extent that the Guarantor did not
 otherwise learn of such action and such failure results in the forfeiture by
 the Guarantor of substantial rights and defenses and (ii) will not, in any
 event, relieve the Guarantor from any obligations to any Indemnified Person
 other than the indemnification obligation provided in paragraph (a) above.
 The Guarantor shall be entitled to appoint counsel of the Guarantor’s choice
 at the Guarantor’s 

 

- 14 -

	
  

 	
  

 
	
  

 	
 expense to represent the Indemnified Person in any action for which
 indemnification is sought (in which case the Guarantor shall not thereafter
 be responsible for the fees and expenses of any separate counsel retained by
 the Indemnified Person or Persons except as set forth below); provided,
 however, that such counsel shall be satisfactory to the Indemnified
 Person. Notwithstanding the Guarantor’s election to appoint counsel to represent
 the Indemnified Person in any action, the Indemnified Person shall have the
 right to employ separate counsel (including local counsel), and the Guarantor
 shall bear the reasonable fees, costs and expenses of such separate counsel
 (and local counsel), if (i) the use of counsel chosen by the Guarantor to
 represent the Indemnified Person would present such counsel with a conflict
 of interest, (ii) the actual or potential defendants in, or targets of, any
 such action include both the Indemnified Person and the Guarantor and the
 Indemnified Person shall have reasonably concluded that there may be legal
 defenses available to it and/or other Indemnified Persons which are different
 from or additional to those available to the Guarantor, (iii) the Guarantor shall
 not have employed counsel satisfactory to the Indemnified Person to represent
 the Indemnified Person within a reasonable time after notice of the
 institution of such action or (iv) the Guarantor shall authorize the
 Indemnified Person to employ separate counsel at the expense of the
 Guarantor. The Guarantor will not, without the prior written consent of the
 Indemnified Persons, settle or compromise or consent to the entry of any
 judgment with respect to any pending or threatened claim, action, suit or proceeding
 in respect of which indemnification or contribution may be sought hereunder
 (whether or not the Indemnified Persons are actual or potential parties to
 such claim or action) unless such settlement, compromise or consent includes
 an unconditional release of each Indemnified Person from all liability
 arising out of such claim, action, suit or proceeding.

 
	
  

 	
  

 
	
 SECTION 7.3. Compensation; Reimbursement of Expenses.

 
	
  

 	
  

 
	
  

 	
              The Guarantor agrees:

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
              (b)          except
 as otherwise expressly provided herein, to reimburse the Guarantee Trustee
 upon request for all reasonable expenses, disbursements and advances incurred
 or made by it in accordance with any provision of this Guarantee (including
 the reasonable compensation and the expenses and disbursements of its agents
 and counsel), except any such expense, disbursement or advance as may be
 attributable to its negligence or willful misconduct.

 
	
  

 	
  

 
	
                        The
 provisions of this Section 7.3 shall survive the resignation or removal of
 the Guarantee Trustee and the termination of this Guarantee.

 

- 15 -

ARTICLE VIII

MISCELLANEOUS

SECTION 8.1. Successors and Assigns.

                    All
guarantees and agreements contained in this Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Capital Securities then
outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale, transfer or lease of the
Guarantor’s assets to another entity, in each case to the extent permitted
under the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Guarantee without the prior approval of the Holders of
not less than a Majority in liquidation amount of the Capital Securities.

SECTION 8.2. Amendments.

                    Except
with respect to any changes that do not adversely affect the rights of Holders
of the Capital Securities in any material respect (in which case no consent of
Holders will be required), this Guarantee may be amended only with the prior
approval of the Holders of not less than a Majority in liquidation amount of
the Capital Securities. The provisions of the Declaration with respect to
amendments thereof shall apply equally with respect to amendments of the
Guarantee.

SECTION 8.3. Notices.

                    All
notices provided for in this Guarantee shall be in writing, duly signed by the
party giving such notice, and shall be delivered, telecopied or mailed by first
class mail, as follows:

	
  

 	
  

 
	
  

 	
           (a)          If
 given to the Guarantee Trustee, at the Guarantee Trustee’s mailing address
 set forth below (or such other address as the Guarantee Trustee may give
 notice of to the Holders of the Capital Securities):

 

	
  

 	
  

 
	
  

 	
 Wells Fargo
 Bank, National Association

 919 Market Street

 Suite 700

 Wilmington, DE 19801

 Attention: Corporate Trust Division

 Telecopy: 302-575-2006

 Telephone: 302-575-2005

 

- 16 -

	
  

 	
  

 
	
  

 	
           (b)          If
 given to the Guarantor, at the Guarantor’s mailing address set forth below
 (or such other address as the Guarantor may give notice of to the Holders of
 the Capital Securities and to the Guarantee Trustee):

 

	
  

 	
  

 
	
  

 	
 Codorus
 Valley Bancorp, Inc.

 105 Leader Heights Road

 York, PA 17403

 Attention: Jann Allen Weaver

 Telecopy: (717) 747-9276

 Telephone: (717) 747-1502

 

	
  

 	
  

 
	
  

 	
           (c)          If
 given to any Holder of the Capital Securities, at the address set forth on
 the books and records of the Issuer.

 

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

SECTION 8.4. Benefit.

                    This
Guarantee is solely for the benefit of the Holders of the Capital Securities
and, subject to Section 2.1(a), is not separately transferable from the Capital
Securities.

SECTION 8.5. Governing Law.

                    THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

SECTION 8.6. Counterparts.

                    This
Guarantee may contain more than one counterpart of the signature page and this
Guarantee may be executed by the affixing of the signature of the Guarantor and
the Guarantee Trustee to any of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have
the same force and effect as though all of the signers had signed a single
signature page.

- 17 -

                    THIS
GUARANTEE is executed as of the day and year first above written.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 CODORUS VALLEY BANCORP, INC.,

 as Guarantor

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO BANK, NATIONAL

 ASSOCIATION, as Guarantee Trustee

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
 Title:

 	
   

 

- 18 -

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