Document:

EX-10(x)

    STATE
      OF NORTH CAROLINA

    COUNTY
      OF BUNCOMBE

    EMPLOYMENT
      AGREEMENT

     

    THIS
      AGREEMENT
      entered
      into as of February 18, 2005 by and between THE
      BANK OF ASHEVILLE (hereinafter
      referred to as the “Bank”) and JOHN
      R. HAMRICK (hereinafter
      referred to as “Employee”).

     

    W
      I T N E S S E T H:

     

    WHEREAS,
      the
      expertise and experience of Employee and his relationships and reputation in
      the
      financial institutions industry are extremely valuable to the Bank;
      and

     

    WHEREAS,
      it is
      in the best interests of the Bank and the shareholders of its parent bank
      holding company, Weststar Financial Services Corporation (“Weststar”) to
      maintain an experienced and sound executive management team to manage the Bank
      and to further the Bank’s overall strategies to protect and enhance the value of
      its shareholders’ investments; and

     

    WHEREAS,
      the
      Bank and Employee desire to enter into this Agreement to establish the scope,
      terms and conditions of Employee’s employment by the Bank; and

     

    WHEREAS,
      the
      Bank and Employee desire to enter into this Agreement also to provide Employee
      with security in the event of a change of control of the Bank or Weststar and
      to
      ensure the continued loyalty of Employee during any such change of control
      in
      order to maximize shareholder value as well as the continued safe and sound
      operation of the Bank.

     

    NOW,
      THEREFORE,
      for and
      in consideration of the premises and mutual promises, covenants and conditions
      hereinafter set forth, and other good and valuable consideration, the receipt
      and sufficiency of which hereby are acknowledged, the Bank and Employee hereby
      agree as follows:

     

    1. Employment.
      The
      Bank hereby agrees to employ Employee, and Employee hereby agrees to serve
      as an
      officer of the Bank, all upon the terms and conditions stated herein. As an
      officer of the Bank, Employee will (i) serve as Senior Vice President and Senior
      Credit Officer of the Bank, and (ii) have such other duties and
      responsibilities, and render to the Bank such other management services, as
      are
      customary for persons in Employee’s position with the Bank or as shall otherwise
      be reasonably assigned to him from time to time by the Bank. Employee shall
      faithfully and diligently discharge his duties and responsibilities under this
      Agreement and shall use his best efforts to implement the policies established
      by the Bank. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Employee
      hereby agrees to devote such number of hours of his working time and endeavors
      to the employment granted hereunder as Employee and the Bank shall deem to
      be
      necessary to discharge his duties hereunder, and, for so long as employment
      hereunder shall exist, Employee shall not engage in any other occupation which
      requires a significant amount of Employee’s personal attention during the Bank’s
      regular business hours or which otherwise interferes with Employee’s attention
      to or performance of his duties and responsibilities as an officer of the Bank
      hereunder except with the prior written consent of the Bank. However, nothing
      herein contained shall restrict or prevent Employee from personally, and for
      Employee’s own account, trading in stocks, bonds, securities, real estate or
      other forms of investment for Employee’s own benefit so long as said activities
      do not interfere with Employee’s attention to or performance of his duties and
      responsibilities as an officer of the Bank hereunder.

     

    During
      the term of this Agreement, Employee shall be allowed, in his sole discretion,
      to maintain his primary work location in Asheville, North Carolina.

     

    2. Compensation.
      For all
      services rendered by Employee to the Bank under this Agreement, the Bank shall
      pay Employee a base salary at a rate of Ninety-Five Thousand Dollars and
      00/100’s ($95,000.00) per annum; provided that the rate of such salary shall be
      reviewed by the President of the Bank not less often than annually. Salary
      paid
      under this Agreement shall be payable in cash not less frequently than monthly.
      All compensation hereunder shall be subject to customary withholding taxes
      and
      such other employment taxes as are required by law. In the event of a Change
      in
      Control (as defined in Paragraph 8), Employee’s base salary shall be increased
      not less than six percent (6%) annually during the term of this
      Agreement.

     

    3. Participation
      in Retirement and Employee Benefit Plans; Fringe
      Benefits.
      Subject
      to the terms and conditions of this Agreement, Employee shall be entitled to
      participate in any and all employee benefit programs and compensation plans
      from
      time to time maintained by the Bank and available to all employees of the Bank,
      all in accordance with the terms and conditions (including eligibility
      requirements) of such programs and plans of the Bank, resolutions of the Bank’s
      Board of Directors establishing such programs and plans, and the Bank’s normal
      practices and established policies regarding such programs and plans.

    
      
        
        

      

      
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    The
      Bank
      shall reimburse Employee for all reasonable expenses incurred by him in the
      performance of his duties under this Agreement and documented to the reasonable
      satisfaction of the Bank pursuant to established policies. 

     

    4. Term.
      Unless
      sooner terminated as provided in this Agreement and subject to the right of
      either Employee or the Bank to terminate Employee’s employment at any time as
      provided herein, the term of this Agreement and Employee’s employment with the
      Bank hereunder shall be for a period commencing on the date hereof and
      continuing for a period of one (1) year. Within thirty (30) days prior to the
      first anniversary of this Agreement, and within thirty (30) days of each
      anniversary thereafter, the President and Chief Executive Officer of the Bank
      shall determine whether the term shall be extended. Should the President and
      Chief Executive Officer of the Bank make such an affirmative decision to extend
      the Agreement, one additional year to the term of this Agreement shall be added
      at the end of the first anniversary of this Agreement and, with subsequent
      affirmative decisions to extend, on each anniversary date thereafter.

     

    5. Confidentiality
      and Non-Competition.
      Employee hereby acknowledges and agrees that (i) in the course of his service
      as
      an officer of the Bank, he will gain substantial knowledge of and familiarity
      with the Bank’s customers and its dealings with them, and other information
      concerning the Bank’s business, all of which constitutes valuable assets and
      privileged information that is particularly sensitive due to the fiduciary
      responsibilities inherent in the banking business; and, (ii) in order to protect
      the Bank’s interest in and to assure it the benefit of its business, it is
      reasonable and necessary to place certain restrictions on Employee’s ability to
      compete against the Bank and on his disclosure of information about the Bank’s
      business and customers. For that purpose, and in consideration of the Bank’s
      agreements contained herein, Employee covenants and agrees as provided
      below.

     

    For
      the
      purposes of this Paragraph 5, the following terms shall have the meanings set
      forth below:

     

    Customer.
      The term
“Customer” means any Person with whom, as of the effective date of termination
      of this Agreement or Employee’s employment with the Bank for any reason, the
      Bank has or has had a depository, loan and/or other banking
      relationship.

     

    Financial
      Institution.
      The term
“Financial Institution” means any federal or state chartered bank, savings bank,
      savings and loan association or credit union, or any

    
      
        
        

      

      
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    holding
      company for or corporation that owns or controls any such entity, or any other
      Person engaged in the business of making loans of any type or receiving
      deposits, other than the Bank.

     

    Person.
      The
      term “Person” means any natural person or any corporation, partnership,
      proprietorship, joint venture, limited liability company, trust, estate,
      governmental agency or instrumentality, fiduciary, unincorporated association
      or
      other entity.

     

    (a) Confidentiality
      Covenant.
      Employee covenants and agrees that any and all data, figures, projections,
      estimates, lists, files, records, documents, manuals or other such materials
      or
      information (financial or otherwise) relating to the Bank and its banking
      business, regulatory examinations, financial results and condition, lending
      and
      deposit operations, customers (including lists of the Bank’s customers and
      information regarding their accounts and business dealings with the Bank),
      policies and procedures, computer systems and software, shareholders, employees,
      officers and directors (herein referred to as “Confidential Information”) are
      proprietary to the Bank and are valuable, special and unique assets of the
      Bank’s business to which Employee will have access during his employment with
      the Bank. Employee agrees that (i) all such Confidential Information shall
      be
      considered and kept as the confidential, private and privileged records and
      information of the Bank, and (ii) at all times during the term of his employment
      with the Bank and following the termination of this Agreement or his employment
      for any reason, and except as shall be required in the course of the performance
      by Employee of his duties on behalf of the Bank or otherwise pursuant to the
      direct, written authorization of the Bank, Employee will not: divulge any such
      Confidential Information to any other Person or Financial Institution; remove
      any such Confidential Information in written or other recorded form from the
      Bank’s premises; or make any use of any Confidential Information for his own
      purposes or for the benefit of any Person or Financial Institution other than
      the Bank. However, following the termination of Employee’s employment with the
      Bank, this subparagraph (a) shall not apply to any Confidential Information
      which then is in the public domain (provided that Employee was not responsible,
      directly or indirectly, for permitting such Confidential Information to enter
      the public domain without the Bank’s consent), or which is obtained by Employee
      from a third party which or who is not obligated under an agreement of
      confidentiality with respect to such information.

     

    (b) Non-Competition
      Covenant.
      During
      the term of this Agreement and for a period of two years after termination,
      Employee agrees that he will not, within

    
      
        
        

      

      
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     Buncombe
      County, North Carolina, directly or indirectly own, manage, operate, join,
      control or participate in the organization, management, operation or control
      of
      or be employed by or connected in any manner with, any financial institution
      which competes with the Bank without the prior written consent of the President
      and Chief Executive Officer of the Bank and provided, however, that the
      provisions of this Section 5(b) shall not apply in the event that Employee’s
      employment hereunder is terminated by the President and Chief Executive Officer
      of the Bank without “Cause” as such term is defined in Section 6(d) hereof, and
      in the event that no additional non-competition agreement is made as part of
      a
      separate severance agreement giving rise to Employee’s termination of this
      Agreement. 

     

    (c) Remedies
      for Breach.
      Employee understands and agrees that a breach or violation by him of the
      covenants contained in Paragraph 5 of this Agreement will be deemed a material
      breach of this Agreement and will cause irreparable injury to the Bank, and
      that
      it would be difficult to ascertain the amount of monetary damages that would
      result from any such violation. In the event of Employee’s actual or threatened
      breach or violation of the covenants contained in Paragraph 5, the Bank shall
      be
      entitled to bring a civil action seeking an injunction restraining Employee
      from
      violating or continuing to violate those covenants or from any threatened
      violation thereof, or for any other legal or equitable relief relating to the
      breach or violation of such covenant. Employee agrees that, if the Bank
      institutes any action or proceeding against Employee seeking to enforce any
      of
      such covenants or to recover other relief relating to an actual or threatened
      breach or violation of any of such covenants, Employee shall be deemed to have
      waived the claim or defense that the Bank has an adequate remedy at law and
      shall not urge in any such action or proceeding the claim or defense that such
      a
      remedy at law exists. However, the exercise by the Bank of any such right,
      remedy, power or privilege shall not preclude the Bank or its successors or
      assigns from pursuing any other remedy or exercising any other right, power
      or
      privilege available to it for any such breach or violation, whether at law
      or in
      equity, including the recovery of damages, all of which shall be cumulative
      and
      in addition to all other rights, remedies, powers or privileges of the
      Bank.

     

    Notwithstanding
      anything contained herein to the contrary, Employee agrees that the provisions
      of Paragraph 5(a) above and the remedies provided in this Paragraph 5(c) for
      a
      breach by Employee shall be in addition to, and shall not be deemed to supersede
      or to otherwise restrict, limit or impair the rights of the Bank under the
      Trade
      Secrets Protection Act 

    
      
        
        

      

      
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    contained
      in Article 24, Chapter 66 of the North Carolina General Statutes, or any other
      state or federal law or regulation dealing with or providing a remedy for the
      wrongful disclosure, misuse or misappropriation of trade secrets or other
      proprietary or confidential information.

     

    (d) Survival
      of Covenants.
      Employee’s covenants and agreements and the Bank’s rights and remedies provided
      for in this Paragraph 5 shall survive any termination of this Agreement or
      Employee’s employment with the Bank.

     

    6. Termination
      and Termination Pay.

     

    (a) Employee’s
      employment under this Agreement may be terminated at any time by Employee upon
      sixty (60) days written notice to the Bank. Upon such termination, Employee
      shall be entitled to receive compensation through the effective date of such
      termination; provided, however, that the Bank, in its sole discretion, may
      elect
      for Employee not to serve out part or all of said notice period.

     

    (b) Employee’s
      employment under this Agreement shall be terminated upon the death of Employee
      during the term of this Agreement. Upon any such termination, Employee’s estate
      shall be entitled to receive any compensation due to Employee computed through
      the last day of the calendar month in which his death shall have occurred but
      which remains unpaid.

     

    (c) In
      the
      event Employee becomes disabled during the term of his employment hereunder
      and
      it is determined by the Bank that Employee is permanently unable to perform
      his
      duties under this Agreement, the Bank shall continue to compensate Employee
      at
      the level of compensation described in Paragraph 2 above, and shall continue
      to
      provide Employee each of the other benefits set forth or described in this
      Agreement, for the remaining term of this Agreement, less any other payments
      provided under any disability income plan of the Bank which is applicable to
      Employee. In the event of any disagreement between Employee and the Bank as
      to
      whether Employee is physically or mentally incapacitated such as will result
      in
      the termination of Employee’s employment pursuant to this Paragraph 6(c), the
      question of such incapacity shall be submitted to an impartial and reputable
      physician for determination, selected by mutual agreement of Employee and the
      Bank or, failing such agreement, by two (2) physicians (one (1) of whom shall
      be
      selected by the Bank and the other by Employee), and such determination of
      the
      question of such incapacity by such physician or physicians shall be
      final

    
      
        
        

      

      
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     and
      binding on Employee and the Bank. The Bank shall pay the reasonable fees and
      expenses of such physician or physicians in making any determination required
      under this Paragraph 6(c).

     

    (d) The
      Bank
      may terminate Employee’s employment at any time for any reason with or without
“Cause” (as defined below), but any termination by the Bank other than
      termination for “Cause” (as defined below) shall not prejudice Employee’s right
      to compensation or other benefits under this Agreement for its remaining term.
      Following any termination of Employee’s employment by the Bank for “Cause” (as
      defined below), Employee shall have no further rights under this Agreement
      (including any right to receive compensation or other benefits for any period
      after such termination).

     

    For
      purposes of this Paragraph 6(d) , the Bank shall have “Cause” to terminate
      Employee’s employment upon:

     

    (i) A
      determination by the Bank, in good faith, that Employee
      (A)
      has
      breached in any material respect any of the terms or conditions of this
      Agreement, or (B)
      is
      engaging or has engaged in willful misconduct or conduct which is detrimental
      to
      the business prospects of the Bank or which has had or likely will have a
      material adverse effect on the Bank’s business or reputation. Prior to any
      termination by the Bank of Employee’s employment for a breach, failure to
      perform or conduct described in this subparagraph (i), the Bank shall give
      Employee written notice which describes such breach, failure to perform or
      conduct and if during a period of five business (5) days following such notice
      Employee cures or corrects the same to the reasonable satisfaction of the Bank,
      then this Agreement shall remain in full force and effect. However,
      notwithstanding the above, if the Bank has given written notice to Employee
      on a
      previous occasion of the same or a substantially similar breach, failure to
      perform or conduct, or of a breach, failure to perform or conduct which the
      Bank
      determines in good faith to be of substantially similar import, or if the Bank
      determines in good faith that the then current breach, failure to perform or
      conduct is not reasonably curable, then termination under this subparagraph
      (i)
      shall be effective immediately and Employee shall have no right to cure such
      breach, failure to perform or conduct.

    (ii) The
      violation by Employee of any applicable federal or state law, or any applicable
      rule, regulation, order or statement of policy promulgated by any governmental
      agency or authority having jurisdiction over the Bank or any of its affiliates
      or subsidiaries (a “Regulatory Authority”, including without limitation the
      Federal Deposit 

    
      
        
        

      

      
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    Insurance
      Corporation, the North Carolina Commissioner of Banks or any other banking
      regulator having legal jurisdiction over the Bank), which results from
      Employee’s gross negligence, willful misconduct or intentional disregard of such
      law, rule, regulation, order or policy statement and results in any substantial
      damage, monetary or otherwise, to the Bank or any of its affiliates or
      subsidiaries or to the Bank’s reputation;

     

    (iii) The
      commission in the course of Employee’s employment with the Bank of an act of
      fraud, embezzlement, theft or proven personal dishonesty (whether or not
      resulting in criminal prosecution or conviction);

     

    (iv) The
      conviction of Employee of any felony or any criminal offense involving
      dishonesty or breach of trust, or the occurrence of any event described in
      Section 19 of the Federal Deposit Insurance Act or any other event or
      circumstance which disqualifies Employee from serving as an employee or
      executive officer of, or a party affiliated with, the Bank or its bank holding
      company;

     

    (v) Employee
      becomes unacceptable to, or is removed, suspended or prohibited from
      participating in the conduct of the Bank’s affairs (or if proceedings for that
      purpose are commenced) by any Regulatory Authority; or

     

    (vi) The
      occurrence of any event believed by the Bank, in good faith, to have resulted
      in
      Employee being excluded from coverage, or having coverage limited as to Employee
      as compared to other covered officers or employees, under the Bank’s then
      current “blanket bond” or other fidelity bond or insurance policy covering its
      directors, officers or employees.

     

    7. Additional
      Regulatory Requirements.
      Notwithstanding anything contained in this Agreement to the contrary, it is
      understood and agreed that the Bank (or its successor in interest) shall not
      be
      required to make any payment or take any action under this Agreement if
(a)
      the Bank
      is declared by any Regulatory Authority to be insolvent, in default or operating
      in an unsafe or unsound manner, or if (b)
      in the
      opinion of counsel to the Bank such payment or action (i)
      would be
      prohibited by or would violate any provision of state or federal law applicable
      to the Bank, including without limitation the Federal Deposit Insurance Act
      and
      Chapter 53 of the North Carolina General Statutes as now in effect or hereafter
      amended, (ii)
      would be
      prohibited by or would violate any applicable rules, regulations, orders or
      statements of

    
      
        
        

      

      
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    policy,
      whether now existing or hereafter promulgated, of any Regulatory Authority,
      or
(iii)
      otherwise
      would be prohibited by any Regulatory Authority.

     

    8. Change
      in Control

     

    (a) In
      the
      event of a “Change in Control” (as defined in Subparagraph (d) below), of the
      Bank, Employee shall be entitled to terminate this Agreement upon the occurrence
      within twenty-four (24) months following a change in control of any Termination
      Event as defined in Subparagraph (b) below. 

     

    (b) A
      Termination Event shall mean the occurrence of any of the following events:
      

     

    (i) Employee
      is assigned any duties and/or responsibilities that are inconsistent with his
      position, duties, responsibilities, or status at the time of the Change in
      Control or with his reporting responsibilities or titles with the Bank in effect
      at such time;

    

    (ii) Employee’s
      annual base salary is reduced below the amount in effect as of the effective
      date of a Change in Control or as the same shall have been increased from time
      to time following such Change in Control;

    

    (iii) Employee’s
      life insurance, medical or hospitalization insurance, disability insurance,
      dental insurance, stock option plans, stock purchase plans, deferred
      compensation plans, management retention plans, retirement plans, or similar
      plans or benefits being provided by the Bank to Employee as of the effective
      date of the Change in Control are reduced in their level, scope, or coverage,
      or
      any such insurance, plans, or benefits are eliminated, unless such reduction
      or
      elimination applies proportionately to all salaried employees of the Bank who
      participated in such benefits prior to such Change in Control; or

     

     

    
 

    
      
        
        

      

      
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    (iv) Employee
      is transferred to a location outside of Asheville, North Carolina without
      Employee’s express written consent.

    

    A
      Termination Event shall be deemed to have occurred on the date such action
      or
      event is implemented or takes effect.

     

    (c) In
      the
      event that Employee terminates this Agreement or the Bank terminates this
      Agreement pursuant to this Paragraph 8, the Bank will be obligated to pay or
      cause to be paid to Employee the greater of (i) all amounts due and owing to
      the
      end of the term of this Agreement, or (ii) an amount equal to two hundred
      ninety-nine percent (299%) of Employee’s “base amount” as defined in Section
      28OG(b) (3) (A) of the Internal Revenue Code of 1986, as amended (the
“Code”).

     

    (d) For
      the
      purposes of this Agreement, the term Change in Control shall mean any of the
      following events:

     

    (i) After
      the
      effective date of this Agreement, any “person” (as such term is defined in
      Section 7 (j) (8) (A) of the Change in Bank Control Act of 1978), directly
      or
      indirectly, acquires beneficial ownership of voting stock, or acquires
      irrevocable proxies or any combination of voting stock and irrevocable proxies,
      representing thirty-five percent (35%) or more of any class of voting securities
      of the Bank or Weststar or acquires control of in any manner the election of
      a
      majority of the directors of the Bank or Weststar;

    

    (ii) The
      Bank
      or Weststar consolidates or merges with or into another corporation,
      association, or entity, or is otherwise reorganized, where neither the Bank
      nor
      Weststar is the surviving corporation in such transaction; or

    

    (iii) All
      or
      substantially all of the assets of the Bank or Weststar are sold or otherwise
      transferred to or are acquired by any other corporation, association, or other
      person, entity, or group.

     

     

    
 

    
      
        
        

      

      
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    Notwithstanding
      the other provisions of this Paragraph 8, a transaction or event shall not
      be
      considered a Change in Control if, prior to the consummation or occurrence
      of
      such transaction or event, Employee and the Bank agree in writing that the
      same
      shall not be treated as a Change in Control for purposes of this
      Agreement.

     

    (e) Amounts
      payable pursuant to this Paragraph 8 shall be paid, at the option of Employee
      either in one lump sum or in equal monthly payments over the remaining term
      of
      this Agreement.

     

    (f) Following
      a Termination Event which gives rise to Employee’s rights hereunder, Employee
      shall have twenty-four (24) months from the date of occurrence of the
      Termination Event to terminate this Agreement pursuant to this Paragraph 8.
      Any
      such termination shall be deemed to have occurred only upon delivery to the
      Bank
      or any successor thereto, of written notice of termination which describes
      the
      Change in Control and Termination Event. If Employee does not so terminate
      this
      Agreement within such twenty-four month period, Employee shall thereafter have
      no further rights hereunder with respect to that Termination Event, but shall
      retain rights, if any, hereunder with respect to any other Termination Event
      as
      to which such period has not expired.

     

    (g) It
      is the
      intent of the parties hereto that all payments made pursuant to this Agreement
      be deductible by the Bank for federal income tax purposes and not result in
      the
      imposition of an excise tax on Employee. However, if any payments to be made
      to
      or for the benefit of Employee are deemed to be “parachute payments” as that
      term is defined in Section 28OG(b)(2) of the Code, the Bank shall pay to
      Employee the amount of any excise taxes imposed on Employee as well as any
      additional tax imposed on Employee as a result of such payment. 

     

    (h) In
      the
      event any dispute shall arise between Employee and the Bank as to the terms
      or
      interpretation of this Agreement, including this Paragraph 8, whether instituted
      by formal legal proceedings or otherwise, including any action taken by Employee
      to enforce the terms of this Paragraph 8 or in defending against any action
      taken by the Bank, the Bank shall reimburse Employee for all costs and expenses,
      proceedings or actions, in the event Employee prevails in any such
      action. 

     

    9. Successors
      and Assigns.

     

     

     

    
      
        
        

      

      
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    (a) This
      Agreement shall inure to the benefit of and be binding upon any corporate or
      other successor of the Bank which shall acquire, directly or indirectly, by
      conversion, merger, consolidation, purchase or otherwise, all or substantially
      all of the assets of the Bank.

     

    (b) The
      Bank
      is contracting for the unique and personal skills of Employee. Therefore,
      Employee shall be precluded from assigning or delegating his rights or duties
      hereunder without first obtaining the written consent of the Bank.

     

    10. Modification;
      Waiver; Amendments.
      No
      provision of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing and signed by the
      parties hereto. No waiver by either party hereto, at any time, of any breach
      by
      the other party hereto of, or compliance with, any condition or provision of
      this Agreement to be performed by such other party shall be deemed a waiver
      of
      similar or dissimilar provisions or conditions at the same or at any prior
      or
      subsequent time. No amendments or additions to this Agreement shall be binding
      unless in writing and signed by both parties, except as herein otherwise
      provided.

     

    11. Applicable
      Law.
      This
      Agreement shall be governed in all respects whether as to validity,
      construction, capacity, performance or otherwise, by the laws of North Carolina,
      except to the extent that federal law shall be deemed to apply.

     

    12. Severability.
      The
      provisions of this Agreement shall be deemed severable and the invalidity or
      unenforceability of any provision shall not affect the validity or
      enforceability of the other provisions hereof.

     

    
 

    
      
        
        

      

      
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    IN WITNESS
      WHEREOF,
      the
      parties have executed this Agreement under seal and in such form as to be
      binding as of the day and year first hereinabove written.

     

    
      	 	
              THE
                BANK OF ASHEVILLE

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:
                

            	
              /s/
                G. Gordon Greenwood

            	 
	 	
               

            	
              G.
                Gordon Greenwood, President

            	 
	 	 	 	 
	
              ATTEST:

            	 	 	 
	 	 	 	 
	
              /s/
                Randall C. Hall

            	 	 	 
	
              Randall
                C. Hall, Secretary

            	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
              /s/
                John R. Hamrick

            	 
	 	 	
              John
                R. Hamrick

            	 

    

     

    
13Exhibit 4.1

HARTFORD LIFE INSURANCE COMPANY
PRINCIPAL PROTECTED MEDIUM-TERM NOTES LINKED TO THE DOW JONES INDUSTRIAL
AVERAGE(SM) (80%) AND THE MSCI EAFE(R) INDEX (20%)

THIS NOTE IS A GLOBAL  NOTE  WITHIN THE  MEANING OF THE  INDENTURE  (HEREINAFTER
DEFINED)  AND IS  REGISTERED  IN THE NAME OF A  DEPOSITARY  (AS  DEFINED  IN THE
INDENTURE) OR A NOMINEE OF A DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED  IN THE NAME OF A PERSON  OTHER THAN THE  DEPOSITARY  OR ITS  NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,  AND NO TRANSFER
OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE  DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE  DEPOSITARY)  MAY BE REGISTERED  EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED  REPRESENTATIVE OF THE DEPOSITORY
TRUST  COMPANY,  A NEW YORK  CORPORATION  ("DTC"),  TO THE COMPANY  (HEREINAFTER
DEFINED) OR ITS AGENT FOR  REGISTRATION  OF TRANSFER,  EXCHANGE OR PAYMENT,  AND
UNLESS ANY  CERTIFICATE  ISSUED IS  REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED  REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH  OTHER  ENTITY AS IS  REQUESTED  BY AN  AUTHORIZED
REPRESENTATIVE  OF DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

REGISTERED NO.: 407344 CUSIP NO.: 4165X2AL0 PRINCIPAL AMOUNT: U.S. $7,952,000.00

                         HARTFORD LIFE INSURANCE COMPANY

                        EQUITY INDEXED MEDIUM-TERM NOTES

<TABLE>
<S>                                                        <C>
Issuance Date:  March 6, 2006                              Note Linked to Securities of One or More Issuers, One or More
Issue Price:  100%                                         Currencies, One or More Commodities, One or More Indices, or
Stated Maturity Date:  September 20, 2012                  any Other Instrument(s) or Measure(s) or Baskets of any of the
Settlement Date:  March 6, 2006                            Foregoing:  [X] Yes [ ] No
Securities Exchange Listing:  [ ] Yes [X] No. If yes,        Supplemental Payment(s):  [X] Yes [ ] No
indicate name(s) of Securities Exchange(s):                  Relevant Index or Indices:  Dow Jones Industrial Average(SM) (80%) (the
__________________________________________.                    "Dow Index") and the MSCI EAFE(R) Index (20%) (the "EAFE Index")
Depositary:  The Depository Trust Company                      Initial Index Level(s):  Dow Index:  12,216.24
Authorized Denominations:  $1,000 and integrals thereof                                 EAFE Index:  2,150.11
Specified Currency:   U.S. Dollars                             Index Valuation Date(s):  Each September 20th from 2007 through 2011
Amortizing Note:  [ ] Yes [X] No. If yes,                        and September 13, 2012.
  Amortization schedule or formula:                            Off-Set Amount:  N/A
  Additional/Other Terms                                       Participation Rate:  105%
Discount Note:  [ ] Yes [X] No. If yes,                        Maximum Supplemental Payment, if any:  N/A
  Total Amount of Discount:                                    Minimum Supplemental Payment:  20% of the principal amount
  Initial Accrual Period of Discount:                          Periodic Interest Note:  [ ] Yes [X] No. If yes,
  Interest Payment Dates:                                        Interest Rate:  N/A
  Additional/Other Terms:                                        Interest Payment Dates: N/A
Redemption Provisions:  [ ] Yes [X] No. If yes,                  Day Count Convention:  N/A
  Initial Redemption Date:                                       Regular Records Date(s):  N/A
  Redemption Dates:                                          Calculation Agent:  Wachovia Bank, National Association
  Initial Redemption Percentage:                             Additional/Other Terms:  See attached Supplemental Payment Schedule
  Annual Redemption Percentage Reduction, if any:          Sinking Fund:  None
  Additional/Other Terms:                                  Survivor's Option:  [ ] Yes [X] No. If yes, Survivor's Option Rider is
Aggregate Principal Amount of the Series:  $7,952,000.00       attached and is incorporated into this Note.
</TABLE>

                                      1-1           Issuance Date: March 6, 2007
<PAGE>

HARTFORD LIFE INSURANCE COMPANY
PRINCIPAL PROTECTED MEDIUM-TERM NOTES LINKED TO THE DOW JONES INDUSTRIAL
AVERAGE(SM) (80%) AND THE MSCI EAFE(R) INDEX (20%)

         Hartford Life Insurance Company (the "COMPANY"), for value received,
hereby promises to pay to Cede & Co., or its registered assigns, the Principal
Amount specified above plus the Supplemental Payment, if any, specified below on
the Stated Maturity Date specified above and, if so specified above, to pay
interest thereon from the Issuance Date specified above or from the most recent
Interest Payment Date specified above to which interest has been paid or duly
provided for at the rate per annum as specified above, until the principal
hereof is paid or made available for payment. Unless otherwise set forth above
under "Specified Currency," payments of principal, premium, if any, and interest
hereon will be made in the lawful currency of the United States of America
("U.S. DOLLARS" or "UNITED STATES DOLLARS"). The "PRINCIPAL AMOUNT" of this Note
at any time means (1) if this Note is a Discount Note (as hereinafter defined),
the Amortized Face Amount (as hereinafter defined) at such time (as defined in
Section 3(c) on the reverse hereof) and (2) in all other cases, the Principal
Amount hereof. Capitalized terms not otherwise defined herein shall have their
meanings set forth in the Indenture, dated as of September 8, 2006, (the
"INDENTURE"), between The Bank of New York Trust Company, N.A. (successor to
JPMorgan Chase Bank, N.A.), as the indenture trustee (the "INDENTURE TRUSTEE"),
and the Company, as amended or supplemented from time to time, or on the face
hereof.

         This Note is one of a duly authorized issue of securities of the
Company (herein called the "Notes"), issued and to be issued in one or more
series under the Indenture and reference is hereby made to the Indenture for a
statement of the respective rights, limitation of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Notes and of the
terms upon which the Notes are, and are to be, authenticated and delivered.

This Note will mature on the Stated Maturity Date, unless its principal (or any
installment of its principal) becomes due and payable prior to the Stated
Maturity Date, whether, as applicable, by the declaration of acceleration of
maturity, notice of redemption by the Company or otherwise; provided, that if
the Stated Maturity Date is not a Business Day, then the Maturity Date will be
the next succeeding Business Day following such Stated Maturity Date and any
payment of interest due on the Stated Maturity Date will be made on the Maturity
Date as adjusted, with the same force and effect as if made on the Stated
Maturity Date, but no additional interest shall accrue or be payable as a result
of the delayed payment; provided, further, that if due to a Market Disruption
Event or otherwise, the final Index Valuation Date is postponed so that it falls
less than three Business Days prior to or following the Stated Maturity Date,
the Maturity Date will be the third Business Day following the final Index
Valuation Date. (Any date on which this Note becomes due and payable, whether
prior or subsequent to the Stated Maturity Date is referred to as the "MATURITY
DATE").

If the Stated Maturity Date is postponed due to postponement of the Index
Valuation Date as described above, the Company shall give written notice of such
postponement and, once it has been determined, of the date to which the Maturity
Date has been rescheduled to the Indenture Trustee and the Paying Agent at their
New York offices, on which notices the Indenture Trustee and the Paying Agent
may conclusively rely. These notices shall be given no later than (i) with
respect to notice of the postponement of the Stated Maturity Date, the Business
Day immediately following the scheduled Index Valuation Date; and (ii) with
respect to notice of the date to which the Maturity Date has been rescheduled,
the Business Day immediately following the actual Index Valuation Date for
determining the Ending Index Level.

                                      1-2           Issuance Date: March 6, 2007
<PAGE>

HARTFORD LIFE INSURANCE COMPANY
PRINCIPAL PROTECTED MEDIUM-TERM NOTES LINKED TO THE DOW JONES INDUSTRIAL
AVERAGE(SM) (80%) AND THE MSCI EAFE(R) INDEX (20%)

A "DISCOUNT NOTE" is any Note that has an Issue Price that is less than 100% of
the Principal Amount thereof by more than a percentage equal to the product of
0.25% and the number of full years to the Stated Maturity Date.

         Unless otherwise specified above, the interest payable on each Interest
Payment Date or the Maturity Date will be the amount of interest accrued from
and including the Issuance Date or from and including the last Interest Payment
Date to which interest has been paid or duly provided for, as the case may be,
to, but excluding, such Interest Payment Date or the Maturity Date, as the case
may be.

         Unless otherwise specified above, the interest payable on any Interest
Payment Date will be paid to the Holder on the Regular Record Date for such
Interest Payment Date, which Regular Record Date shall be the fifteenth (15th)
calendar day, whether or not a Business Day, immediately preceding the related
Interest Payment Date; provided that, notwithstanding any provision of the
Indenture to the contrary, interest payable on any Maturity Date shall be
payable to the Person to whom principal shall be payable; and provided, further,
that unless otherwise specified above, in the case of a Note initially issued
between a Regular Record Date and the Interest Payment Date relating to such
Regular Record Date, interest for the period beginning on the Issuance Date and
ending on such Interest Payment Date shall be paid on the Interest Payment Date
following the next succeeding Regular Record Date to the Holder on such next
succeeding Regular Record Date.

         Payments of principal of, and premium, if any, and interest and other
amounts due and owing, if any, will be made through the Indenture Trustee to the
account of DTC or its nominee and will be made in accordance with depositary
arrangements with DTC.

         Unless otherwise specified on the face hereof, the Holder hereof will
not be obligated to pay any administrative costs imposed by banks in making
payments in immediately available funds by the Company. Unless otherwise
specified on the face hereof, any tax assessment or governmental charge imposed
upon payments hereunder, including, without limitation, any withholding tax,
will be borne by the Holder hereof.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

         Unless the certificate of authentication hereon shall have been
executed by the Indenture Trustee pursuant to the Indenture, this Note shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

                                      1-3           Issuance Date: March 6, 2007
<PAGE>

HARTFORD LIFE INSURANCE COMPANY
PRINCIPAL PROTECTED MEDIUM-TERM NOTES LINKED TO THE DOW JONES INDUSTRIAL
AVERAGE(SM) (80%) AND THE MSCI EAFE(R) INDEX (20%)

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, by manual or facsimile signature.

                                        HARTFORD LIFE INSURANCE COMPANY

Dated: March 6, 2007
                                        By: /s/ Jeffrey L. Johnson
                                            ------------------------------
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Notes of Hartford Life Insurance Company referred to
in the within-mentioned Indenture.

                                        THE BANK OF NEW YORK TRUST COMPANY, N.A.
                                        As Indenture Trustee

Dated: March 6, 2007
                                        By: /s/ Richard C. Tarnas
                                            ------------------------------
                                            authorized signatory

                                      1-4           Issuance Date: March 6, 2007
<PAGE>

                                [REVERSE OF NOTE]

         Section 1. GENERAL. This Note is one of a duly authorized issue of
Notes of the Company. The Notes of this series are issued pursuant to the
Indenture.

         Section 2. CURRENCY. This Note is denominated in, and payments of
principal, premium, if any, and/or interest, if any, will be made in the
Specified Currency specified on the face hereof.

         Section 3. DETERMINATION OF INTEREST AMOUNTS AND CERTAIN OTHER TERMS.

         (a)      PERIODIC INTEREST NOTES. If this Note is designated on the
face hereof as a Periodic Interest Note:

                  (i)      This Note will bear interest at the rate per annum
         specified on the face hereof. Interest on this Note will be computed on
         the basis of a 360-day year of twelve 30-day months.

                  (ii)     Unless otherwise specified on the face hereof, the
         Interest Payment Dates for this Note will be as follows:

                           Interest
                           Payment Frequency   Interest Payment Dates
                           -----------------   ---------------------------------

                           Monthly             Fifteenth day of each calendar
                                               month, beginning in the first
                                               calendar month following the
                                               month this Note was issued.

                           Quarterly           Fifteenth day of every third
                                               calendar month, beginning in the
                                               third calendar month following
                                               the month this Note was issued.

                           Semi-annual         Fifteenth day of every sixth
                                               calendar month, beginning in the
                                               sixth calendar month following
                                               the month this Note was issued.

                           Annual              Fifteenth day of every twelfth
                                               calendar month, beginning in the
                                               twelfth calendar month following
                                               the month this Note was issued.

                  (iii)    If any Interest Payment Date or the Maturity Date of
         this Note falls on a day that is not a Business Day, the Company will
         make the required payment of principal, premium, if any, and/or
         interest or other amounts on the next succeeding Business Day, and no
         additional interest will accrue in respect of the payment made on that
         next succeeding Business Day.

                                      2-1           Issuance Date: March 6, 2007
<PAGE>

         (b)      SUPPLEMENTAL  PAYMENTS.  If this Note is specified on the face
hereof  as a "Note  Linked to  Securities  of One or More  Issuers,  One or More
Currencies,  One or More  Commodities,  Indices,  or any other  Instrument(s) or
Measure(s)  or  Baskets  of any of the  Foregoing"  and as having  "Supplemental
Payment(s)," a Supplemental Payment shall be payable on the Stated Maturity Date
or a later  Maturity Date and shall be determined  by the  Calculation  Agent by
reference  to the relevant  index or  indicies,  as specified on the face hereof
(the "Relevant Index"), and payment of principal, premium, if any, and interest,
if any, on this Note shall be made as set forth below.

                  (i)      DETERMINATION  OF THE  SUPPLEMENTAL  PAYMENT:  On the
         Index  Valuation  Date or  Dates  set  forth on the  face  hereof,  the
         Calculation  Agent will  determine  the closing  level of the  Relevant
         Index (each a "Periodic  Valuation Level").  If there is a single Index
         Valuation  Date, the Periodic  Valuation  Level as of that date will be
         the Ending Index Level. If there is more than one Index Valuation Date,
         the Calculation  Agent will determine the closing level of the Relevant
         Index for each such day and the  arithmetic  average  of the sum of the
         Periodic  Valuation  Levels,  divided by the number of Index  Valuation
         Dates.  This average  will be the "Ending  Index  Level".  The "closing
         level" of the Relevant  Index on any Trading Day means the level of the
         Relevant Index at the regular  official  weekday close of the principal
         trading  session(s)  of the  relevant  exchange(s)  or  market(s)  (the
         "Relevant Exchanges") for the stocks or other securities or instruments
         included  in the  Relevant  Index or any  Successor  Index (as  defined
         below).  (As used herein,  a "Trading Day" is a day on which trading is
         generally  conducted  on the New  York  Stock  Exchange  ("NYSE"),  the
         American  Stock  Exchange  LLC (the  "AMEX"),  the NASDAQ  Stock Market
         and/or any relevant  exchange or market for the Successor Index, all as
         determined  by the  Calculation  Agent.)  Prior to the Stated  Maturity
         Date, the  Calculation  Agent will determine the Index Return using the
         following formula:

                       (ENDING INDEX LEVEL - INITIAL INDEX LEVEL)
                       ------------------------------------------
                                   Initial Index Level

         If the Index Return multiplied by the  Participation  Rate is less than
         or equal to the Off-Set Amount,  if any,  specified on the face of this
         Note,  then the  Supplemental  Payment will equal $0.00 (or the Minimum
         Return,  if any,  specified  on the face of this  Note).  If the  Index
         Return multiplied by the Participation Rate is greater than the Off-Set
         Amount  specified  on the  face of this  Note,  then  the  Supplemental
         Payment  for each $1,000  principal  amount of this Note will equal the
         lesser of the Maximum  Return,  if any,  specified  on the face of this
         Note or the amount computed as follows:

             ($1,000 x Index Return x Participation Rate) -- Off-Set Amount

                  All calculations  with respect to the Initial Index Level, the
         Ending  Index  Level,  the Index  Return or any  closing  level will be
         rounded to the nearest one hundred-thousandth, with five one-millionths
         rounded upward (E.G.,  .876545 would be rounded to .87655);  all dollar
         amounts related to determination of the Supplemental  Payment,  if any,
         per $1,000 principal amount of this Note will be rounded to the nearest
         ten-thousandth, with five one hundred-thousandths rounded upward (E.G.,
         .76545  would be rounded up to .7655);  and all dollar  amounts paid on
         the  aggregate  principal  amount of this Note will be  rounded  to the
         nearest cent, with one-half cent rounded upward.

                                      2-2           Issuance Date: March 6, 2007
<PAGE>

                  The Company  shall  provide,  or shall  cause the  Calculation
         Agent to  provide,  written  notice to the  Indenture  Trustee  and the
         Paying Agent at their New York  offices,  on which notice the Indenture
         Trustee and the Paying Agent may  conclusively  rely,  of the amount of
         cash to be delivered  with respect to each $1,000  principal  amount of
         this Note,  on or prior to 10:30 a.m. on the Business Day preceding the
         Maturity Date.

                  (ii)     OTHER PROVISIONS PERTAINING TO SUPPLEMENTAL PAYMENTS:
         The following  additional  terms apply with respect to the Supplemental
         Payment:

                  (A)      RELEVANT INDEX. The entity that sponsors any Relevant
                  Index  (the   "Sponsor")   is  solely   responsible   for  the
                  computation of that Relevant Index.

                  If more  than  one  Relevant  Index is  specified  on the face
                  hereof, The determinations  specified above will be made using
                  the proportions listed next to the name of each Relevant Index
                  and by applying the procedures  specified in the  Supplemental
                  Payment Schedule, attached hereto.

                  (B)     MARKET DISRUPTION. Each of the following  is a "Market
                  Disruption Event" if the Calculation Agent determines that the
                  actual event materially affects the Relevant Index:

                  o   the  suspension,  absence or  material  limitation  of the
                      trading of stocks or other  securities or instruments then
                      constituting 20% or more of the stocks or other securities
                      or  instruments  which  then  comprise  the  Index (or any
                      Successor  Index)  on the  Relevant  Exchange(s)  for such
                      securities for more than two hours of trading  during,  or
                      during the one-half  hour period  preceding  the close of,
                      the principal  trading session on such Relevant  Exchange;
                      or

                  o   a  breakdown  or failure in the price and trade  reporting
                      systems of any Relevant  Exchange as a result of which the
                      reported  trading prices for stocks or other securities or
                      instruments  then  constituting  20% or more of the stocks
                      which then  comprise the Relevant  Index (or any Successor
                      Index)  during  the one hour  preceding  the  close of the
                      principal trading session on such Relevant Exchange(s) are
                      materially inaccurate; or

                  o   the  suspension,  absence,  limitation,   cancellation  or
                      repudiation  of trading for more than two hours of trading
                      during,  or during the one-half hour period  preceding the
                      close of trading on the  Relevant  Exchange in 20% or more
                      of any  options  contracts  relating  to  stocks  or other
                      securities which then comprise 20% or more of the value of
                      the Relevant Index; or

                  o   the  suspension,  absence or  material  limitation  of the
                      trading on the primary securities exchange,  as determined
                      by  the   Calculation   Agent,   for  trading  in  options
                      contracts, futures or exchange traded funds related to the
                      Relevant  Index or any  Successor  Index for more than two
                      hours of  trading  during,  or during  the  one-half  hour
                      period  preceding  the close  of,  the  principal  trading
                      session on such exchange; or

                                      2-3           Issuance Date: March 6, 2007
<PAGE>

                  o   a  decision  to  permanently  discontinue  trading  in the
                      relevant futures or options contracts;

                  in each case as  determined  by the  Calculation  Agent in its
                  sole discretion; and

                  o   the  Calculation  Agent's   determination,   in  its  sole
                      discretion,  that the event(s)  described above materially
                      interfered  with the  Company's  ability or the ability of
                      any of the Company's affiliates to adjust or unwind all or
                      a material portion of any hedge with respect to this Note.

                  For the purpose of this definition of Market Disruption Event,
                  unless otherwise specified on the face hereof:

                  o   a  limitation  on the  number of hours or days of  trading
                      will not  constitute  a Market o Disruption  Event,  if it
                      results from an announced  change in the regular  business
                      hours of the Relevant Exchange or market;

                  o   limitations pursuant to the rules of any relevant exchange
                      similar  to  NYSE  Rule  80A (or  any  applicable  rule or
                      regulation   enacted   or   promulgated   by   any   other
                      self-regulatory  organization or any government  agency of
                      scope  similar  to  NYSE  Rule  80A as  determined  by the
                      Calculation  Agent,  in its sole  discretion)  on  trading
                      during significant  market  fluctuations will constitute a
                      suspension, absence or material limitation of trading;

                  o   a suspension of trading in futures or options contracts on
                      the  Relevant  Index  by  the  primary  securities  market
                      trading in such contracts by reason of

                      o   a price change  exceeding  limits set by such exchange
                          or market,

                      o   an imbalance of orders relating to such contracts, or

                      o   a  disparity  in bid and ask quotes  relating  to such
                          contracts

                      will, in each such case, constitute a suspension,  absence
                      or  material  limitation  of trading in futures or options
                      contracts related to the Relevant Index; and

                  o   a "suspension of trading" on any Relevant Exchange or on
                      the primary market on which futures o or options contracts
                      related to the Relevant Index are traded will not include
                      any time when such market is itself closed for trading
                      under ordinary circumstances.

                  If an Index Valuation Date (i) is not a Trading Day or (ii) if
                  there is a Market Disruption Event on such day, the applicable
                  Index  Valuation  Date  will be  postponed  to, in the case of
                  clause (i), the immediately succeeding Trading Day and, in the
                  case of clause (ii) the next  succeeding  Trading Day,  during
                  which no Market  Disruption  Event  shall have  occurred or is
                  continuing;  PROVIDED that the Index Closing Level will not be
                  determined  on a date later than the tenth  scheduled  Trading
                  Day after the final Index  Valuation  Date, and if such day is
                  not

                                      2-4           Issuance Date: March 6, 2007
<PAGE>

                  a Trading  Day,  or if there is a Market  Disruption  Event on
                  such date,  the  Calculation  Agent will  determine  the Index
                  Closing Level on such date in accordance  with the formula for
                  and  method of  calculating  the Index  Closing  Level last in
                  effect prior to  commencement of the Market  Disruption  Event
                  (or prior to the  non-Trading  Day),  using the closing  price
                  (or, if trading in the relevant securities has been materially
                  suspended or materially limited,  the Calculation Agent's good
                  faith  estimate of the closing price that would have prevailed
                  but for such  suspension or limitation or non-trading  day) on
                  such  tenth  scheduled  Trading  Day  of  each  security  most
                  recently constituting the Relevant Index.

                           (C)      DISCONTINUANCE  OF THE  RELEVANT  INDEX.  If
                  publication of the Relevant Index is discontinued or otherwise
                  unavailable  and the Sponsor (or another  entity)  publishes a
                  successor or substitute  index that the Calculation  Agent, in
                  its  sole   discretion,   determines   is  comparable  to  the
                  discontinued  Relevant  Index (the new index being referred to
                  as a "Successor Index"), then the relevant closing levels will
                  be determined by reference to the Successor Index at the close
                  of trading on the Relevant Exchange(s) for the Successor Index
                  on each relevant Index Valuation Date.

                  If the  Calculation  Agent  selects  a  Successor  Index,  the
                  Calculation  Agent will cause  written  notice to be  promptly
                  furnished to the Company, the Indenture Trustee and the Holder
                  of this Note of the change to the Successor Index.

                  If publication of the Relevant Index is discontinued prior to,
                  and such  discontinuation  is continuing on an Index Valuation
                  Date and the  Calculation  Agent  determines that no Successor
                  Index is available, then the Calculation Agent will notify the
                  Company  and the  Indenture  Trustee  and will  calculate  the
                  appropriate   closing  levels.   These   calculations  by  the
                  Calculation  Agent will be in accordance  with the formula for
                  and method of  calculating  the Relevant  Index last in effect
                  prior to its  discontinuance  using the closing  price (or, if
                  trading  in  the  relevant   securities  has  been  materially
                  suspended or materially  limited,  its good faith  estimate of
                  the  closing  price  that would  have  prevailed  but for such
                  suspension  or  limitation)  at the  close  of  the  principal
                  trading  session on such date of each  security  most recently
                  composing   the  Relevant   Index  or  Successor   Index,   as
                  applicable.   If  a   Successor   Index  is  selected  or  the
                  Calculation  Agent  calculates a level as a substitute for the
                  Relevant  Index,   that  Successor  Index  or  level  will  be
                  substituted for the Relevant Index for all purposes.

                           (D)      ALTERATION  OF  METHOD  OF   CALCULATION  OF
                  INDEX.  If at any time the method of calculating  the Relevant
                  Index or a Successor  Index, or the level thereof,  is changed
                  in a material respect in the Calculation  Agent's  discretion,
                  or if the Relevant Index or a Successor  Index is in any other
                  way  modified  so that the  Relevant  Index or such  Successor
                  Index does not, in the reasonable  opinion of the  Calculation
                  Agent,  fairly  represent  the level of the Relevant  Index or
                  such  Successor  Index had such changes or  modifications  not
                  been made,  then the  Calculation  Agent will, at the close of
                  business  in New York  City on each  date on which  the  Index
                  Closing Level is to be determined,  make such calculations and

                                      2-5           Issuance Date: March 6, 2007
<PAGE>

                  adjustments  as, in the good faith judgment of the Calculation
                  Agent,  may be  necessary  in order to  arrive at a level of a
                  stock index comparable to the Relevant Index or such Successor
                  Index, as the case may be, as if such changes or modifications
                  had not been made,  and the  Calculation  Agent will calculate
                  the Index Closing Level with  reference to the Relevant  Index
                  or such Successor Index, as adjusted.

                  (iii)    ALTERNATE SUPPLEMENTAL PAYMENT CALCULATION IN CASE OF
         AN EVENT OF DEFAULT.  In case an Event of Default  with respect to this
         Note shall have occurred and be continuing, the amount declared due and
         payable  for  each  $1,000  principal  amount  of this  Note  upon  any
         acceleration of this Note shall be determined by the Calculation  Agent
         and shall be an amount in cash  equal to $1,000  plus the  Supplemental
         Payment, calculated as if the date of acceleration were the final Index
         Valuation Date, plus, if applicable, any accrued and unpaid interest on
         this Note to the date the  principal  hereof is paid or made  available
         for payment.  If more than one Index Valuation Date is specified on the
         face of this Note,  then for each Index  Valuation  Date  scheduled  to
         occur  after the date of  acceleration,  the Trading  Days  immediately
         preceding the date of acceleration  (in such number equal to the number
         of Index Valuation  Dates in excess of one) shall be the  corresponding
         Index Valuation  Dates,  unless  otherwise  specified in the applicable
         pricing supplement. If the maturity of this Note is accelerated because
         of an Event of Default as described  above,  the Company shall provide,
         or shall cause the Calculation Agent to provide,  written notice to the
         Indenture Trustee at its New York office, on which notice the Indenture
         Trustee may conclusively rely, and to the Holder of the cash amount due
         with respect to each $1,000  principal  amount of this Note as promptly
         as possible and in no event later than two Business Days after the date
         of acceleration.

                  (iv)     CALCULATION  AGENT.  All  determinations  made by the
         Calculation Agent hereunder shall be made at the sole discretion of the
         Calculation  Agent and shall,  in the  absence of  manifest  error,  be
         conclusive for all purposes and binding on the Holder of this Note, the
         Indenture Trustee and the Company.  The Company may appoint a different
         Calculation Agent from time to time without notice to or consent of the
         Holder of this Note.

         (c)      DISCOUNT  NOTES.  If this Note is specified on the face hereof
as a "Discount Note":

                  (i)      PRINCIPAL AND INTEREST.  This Note will bear interest
         in the same manner as set forth in Section 3(a) above,  and payments of
         principal  and interest  shall be made as set forth on the face hereof.
         Discount Notes may not bear any interest currently or may bear interest
         at a rate  that is below  market  rates at the  time of  issuance.  The
         difference  between  the  Issue  Price  of a  Discount  Note and par is
         referred to as the "DISCOUNT".

                  (ii)     REDEMPTION;  REPAYMENT;  ACCELERATION. In the event a
         Discount Note is redeemed, repaid or accelerated, the amount payable to
         the Holder of such  Discount  Note will be equal to the sum of: (A) the
         Issue Price  (increased by any accruals of Discount)  and, in the event
         of any redemption of such Discount  Note, if applicable,  multiplied by
         the Initial Redemption Percentage (as adjusted by the Annual Redemption
         Percentage  Reduction,  if  applicable);  and (B) any  unpaid  interest
         accrued on such  Discount Note to the Maturity  Date  ("AMORTIZED  FACE
         AMOUNT").  Unless otherwise  specified on the face hereof, for purposes
         of  determining  the amount of Discount that has accrued as of any

                                      2-6           Issuance Date: March 6, 2007
<PAGE>

         date on which a  redemption,  repayment  or  acceleration  of  maturity
         occurs for a Discount Note, a Discount will be accrued using a constant
         yield  method.  The constant  yield will be  calculated  using a 30-day
         month,  360-day year convention,  a compounding period that, except for
         the Initial  Period (as defined  below),  corresponds  to the  shortest
         period between Interest Payment Dates for the applicable  Discount Note
         (with  ratable  accruals  within a compounding  period),  a coupon rate
         equal to the initial coupon rate applicable to the applicable  Discount
         Note and an assumption that the maturity of such Discount Note will not
         be  accelerated.  If the  period  from the  date of issue to the  first
         Interest  Payment Date for a Discount  Note (the  "INITIAL  PERIOD") is
         shorter  than  the  compounding   period  for  such  Discount  Note,  a
         proportionate amount of the yield for an entire compounding period will
         be  accrued.  If the  Initial  Period  is longer  than the  compounding
         period,  then the  period  will be divided  into a regular  compounding
         period  and a short  period  with the short  period  being  treated  as
         provided above.

         Section 4. REDEMPTION. Unless otherwise so indicated on the face hereof
and in a  Redemption  Schedule  attached  hereto,  this Note may not be redeemed
prior to the Stated Maturity Date, except as set forth in the Indenture.

         Section 5. SINKING FUNDS AND AMORTIZING NOTES.  Unless specified on the
face  hereof,  this Note will not be subject  to, or entitled to the benefit of,
any sinking fund. If this Note is specified on the face hereof as an "Amortizing
Note",  this Note will bear  interest in the same manner as set forth in Section
3(a) above,  and payments of  principal,  premium,  if any, and interest will be
made as set  forth on the face  hereof  and/or in  accordance  with  Schedule  I
attached hereto. The Company will make payments combining principal, premium (if
any) and interest,  if applicable,  on the dates and in the amounts set forth in
the table  appearing in Schedule I attached to this Note or in  accordance  with
the formula  specified on the face hereof.  Payments made hereon will be applied
first to interest due and payable hereon and then to the reduction of the unpaid
principal amount hereof.

         Section 6. MODIFICATIONS AND WAIVERS. The Indenture contains provisions
permitting  the Company and the Indenture  Trustee (1) at any time and from time
to time  without  notice to, or the consent of, the Holders of any Notes  issued
under  the  Indenture  to enter  into one or more  supplemental  indentures  for
certain  enumerated  purposes  and (2)  with the  consent  of the  Holders  of a
majority  in  aggregate  principal  amount  of the  Outstanding  Notes  affected
thereby,  to enter into one or more  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 modifying in any manner the rights of Holders
of Notes under the Indenture; provided, that, with respect to certain enumerated
provisions,  no such  supplemental  indenture  shall be entered into without the
consent of the Holder of each Note affected thereby.  Any such consent or waiver
by the Holder of this Note shall be conclusive  and binding upon such Holder and
upon  all  future  Holders  of  this  Note  and  of any  Note  issued  upon  the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not  notation of such  consent or waiver is made upon this Note or such other
Notes.

         Section  7.  OBLIGATIONS  UNCONDITIONAL.  No  reference  herein  to the
Indenture and no  provisions  of this Note or of the Indenture  shall impair the
right of each  Holder of any  Note,  which is  absolute  and  unconditional,  to
receive  payment of the principal of, and any interest on, and premium,  if any,
on, such Note on the respective  Stated Maturity Date or redemption date

                                      2-7           Issuance Date: March 6, 2007
<PAGE>

thereof and to institute suit for the enforcement of any such payment,  and such
rights shall not be impaired without the consent of such Holder.

         Section 8. EVENTS OF DEFAULT.  If an Event of Default  with  respect to
the Notes of this series shall occur and be  continuing,  the  principal of, and
all other  amounts  payable on, the Notes of this series may be declared due and
payable, or may be automatically accelerated,  as the case may be, in the manner
and with the effect  provided in the  Indenture In the event that this Note is a
Discount Note, the amount of principal of this Note that becomes due and payable
upon such  acceleration  shall be equal to the amount calculated as set forth in
Section 3(d) hereof.

         Section 9.  WITHHOLDING;  NO  ADDITIONAL  AMOUNTS.  All  amounts due in
respect of this Note will be made free and clear of any  applicable  withholding
or deduction for or on account of any present or future taxes,  duties,  levies,
assessments or other  governmental  charges of whatever nature imposed or levied
by or on  behalf of any  governmental  authority,  unless  such  withholding  or
deduction is required by law. The Company will not pay any additional amounts to
the Holder of this Note in respect of any such  withholding  or  deduction,  any
such  withholding  or deduction will not give rise to an Event of Default or any
independent  right or  obligation  to redeem  this Note and the  Holder  will be
deemed for all purposes to have  received cash in an amount equal to the portion
of such withholding or deduction that is attributable to such Holder's  interest
in this Note as equitably determined by the Company.

         Section 10.  LISTING.  Unless  otherwise  specified on the face hereof,
this Note will not be listed on any securities exchange.

         Section 11. NO RECOURSE AGAINST CERTAIN  PERSONS.  No recourse shall be
had for the  payment of any  principal,  interest  or any other sums at any time
owing under the terms of this Note, or for any claim based hereon,  or otherwise
in  respect  hereof,  or based on or in  respect of the  Indenture  against  the
Nonrecourse Parties,  whether by virtue of any constitution,  statute or rule of
law, or by the  enforcement of any assessment or penalty or otherwise,  all such
personal  liability  being,  by  the  acceptance  hereof  and  as  part  of  the
consideration for issue hereof, expressly waived and released.

         Section 12. MISCELLANEOUS.

         (a)      This  Note is  issuable  only  as a  registered  Note  without
coupons in denominations of $1,000 and any integral multiple of $1,000 in excess
thereof,  or, if the specified  currency of this Note is Canadian  dollars,  the
approximate  Canadian dollar  equivalent of $1,000 and any integral  multiple of
such $1,000 equivalent in excess thereof, unless otherwise specified on the face
of this Note.

         (b)      Prior to due presentment for  registration of transfer of this
Note, the Company, the Indenture Trustee,  the Registrar,  the Paying Agent, any
Agent, and any other agent of the Company or the Indenture Trustee may treat the
Person in whose name this Note is registered as the owner hereof for the purpose
of receiving  payment as herein provided and for all other purposes,  whether or
not this Note shall be overdue,  and none of the Company, the Indenture Trustee,
the Registrar, the Paying Agent, any Agent, or any other agent of the Company or
the Indenture Trustee shall be affected by notice to the contrary.

                                      2-8           Issuance Date: March 6, 2007
<PAGE>

         (c)      The  Notes  of this  series  are  being  issued  by means of a
book-entry-only  system with no physical distribution of certificates to be made
except as provided in the  Indenture.  The book-entry  system  maintained by DTC
will evidence ownership of the Notes of this series, with transfers of ownership
effected  on the  records  of DTC and its  participants  pursuant  to rules  and
procedures  established  by DTC  and  its  participants.  The  Company  and  the
Indenture  Trustee  will  recognize  Cede &  Co.,  as  nominee  of  DTC,  as the
registered owner of the Notes of this series, as the Holder of the Notes of this
series for all purposes,  including  payment of principal,  premium (if any) and
interest,  notices  and  voting.  Transfer  of  principal,  premium (if any) and
interest to participants of DTC will be the  responsibility of DTC, and transfer
of principal,  premium (if any) and interest to beneficial  holders of the Notes
of  this  series  by  participants  of DTC  will be the  responsibility  of such
participants  and other  nominees  of such  beneficial  holders.  So long as the
book-entry  system is in effect,  the  selection  of any Notes to be redeemed or
repaid will be determined by DTC pursuant to rules and procedures established by
DTC and its participants.  Neither the Company nor the Indenture Trustee will be
responsible  or  liable  for such  transfers  or  payments  or for  maintaining,
supervising  or reviewing  the records  maintained by DTC, its  participants  or
persons acting through such participants.

         (d)      This  Note  or  portion   hereof  may  not  be  exchanged  for
Definitive  Notes,  except  in the  limited  circumstances  provided  for in the
Indenture.  The transfer or exchange of Definitive Notes shall be subject to the
terms of the Indenture.  No service charge will be made for any  registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         Section  13.  GOVERNING  LAW.  THIS  NOTE  SHALL BE  GOVERNED  BY,  AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                      2-9           Issuance Date: March 6, 2007
<PAGE>

                          SUPPLEMENTAL PAYMENT SCHEDULE

1.       Pursuant to Section 3(b)(ii)(A) of this Note, the procedures  described
in Section  3(b)(i) of this Note for determining  the  Supplemental  Payment are
hereby replaced in its entirety as follows:

DETERMINATION  OF THE  SUPPLEMENTAL  PAYMENT:  For each of the Dow Index and the
EAFE Index, the Calculation  Agent shall  separately  determine the Index Return
pursuant to this Section.  On each Index Valuation  Date, the Calculation  Agent
will  determine the closing level of the Relevant Index for such day, which will
be the "Ending  Index  Level" and will then  determine  the Index Return for the
Relevant Index for such Index Valuation Date using the following formula:

                   (ENDING INDEX LEVEL - INITIAL INDEX LEVEL)
                   ------------------------------------------
                               Initial Index Level

and will then determine for such Index Valuation Date the Basket Return for such
date using the following formula:

     Basket Return = (0.80 x Dow Index Return) + (0.20 x EAFE Index Return)

On the final Index  Valuation  Date,  the  Calculation  Agent will determine the
Final Basket Return by averaging each of the Basket  Returns  determined on each
Index Valuation Date.

If the Final Basket Return  multiplied by $1,000 multiplied by the Participation
Rate is less than or equal to the Minimum  Supplemental Payment ($200) specified
on the  face of this  Note,  then  the  Supplemental  Payment  for  each  $1,000
principal amount of this Note will equal the Minimum  Supplemental  Payment.  If
the Final Basket  Return  multiplied by $1,000  multiplied by the  Participation
Rate (the  "Basket-linked  Supplemental  Payment")  is greater  than the Minimum
Supplemental  Payment  specified on the face of this Note, then the Supplemental
Payment  for  each  $1,000   principal  amount  of  this  Note  will  equal  the
Basket-linked Supplemental Payment.

         The "closing  level" of the Relevant Index on any Trading Day means the
level  of the  Relevant  Index  at the  regular  official  weekday  close of the
principal  trading  session(s)  of the relevant  exchange(s)  or market(s)  (the
"Relevant Exchanges") for the stocks or other securities or instruments included
in the  Relevant  Index or any  Successor  Index (as  defined  below).  (As used
herein,  a "Trading Day" is a day, as determined by the  Calculation  Agent,  on
which trading is generally  conducted (i) with respect to the Dow Index,  on the
New York Stock Exchange ("NYSE"),  the American Stock Exchange LLC (the "AMEX"),
the NASDAQ Stock Market and/or any relevant exchange or market for the Successor
Index,  and (ii) with  respect to the EAFE Index,  the  relevant  exchanges  for
securities underlying the EAFE Index that constitute 20% or more of the value of
the EAFE Index and the exchanges on which futures or options  contracts  related
to the EAFE Index are traded.)

         All  calculations  with respect to the Initial Index Level,  the Ending
Index Level, the Index Return, the Basket Return, the Final Basket Return or any
closing level will be rounded to the nearest one  hundred-thousandth,  with five
one-millionths  rounded upward (E.G.,  .876545 would be rounded to .87655);  all
dollar amounts related to determination of the Supplemental Payment, if any, per
$1,000   principal   amount  of  this  Note  will  be  rounded  to  the  nearest
ten-thousandth,  with five one hundred-thousandths  rounded upward (E.G., .76545
would be rounded up to .7655);

                                      2-10          Issuance Date: March 6, 2007
<PAGE>

and all dollar amounts paid on the aggregate  principal amount of this Note will
be rounded to the nearest cent, with one-half cent rounded upward.

         The Company shall provide, or shall cause the Calculation Agent to
provide, written notice to the Indenture Trustee and the Paying Agent at their
New York offices, on which notice the Indenture Trustee and the Paying Agent may
conclusively rely, of the amount of cash to be delivered with respect to each
$1,000 principal amount of this Note, on or prior to 10:30 a.m. on the Business
Day preceding the Maturity Date.

2.       The below language is added to Section 3(b)(ii)(D):

         If the method of calculating the Relevant Index or a Successor Index is
         modified so that the level of the Relevant Index or such Successor
         Index is a fraction of what it would have been if there had been no
         such modification (E.G., due to a split in the Index), then the
         Calculation Agent will adjust its calculation of the Relevant Index or
         such Successor Index in order to arrive at a level of the Index or such
         Successor Index as if there had been no such modification (E.G., as if
         such split had not occurred).

3.       In determining when a "Market Disruption Event" affects the calculation
of the Supplemental Payment:

                  (i)      The Calculation Agent shall determine whether a
         Market Disruption Event has occurred separately with respect to the Dow
         Index and the EAFE Index, applying any percentage limitation with
         respect to a security included in such Relevant Index separately with
         respect to each such Relevant Index.

                  (ii)     In determining whether there has been a suspension in
         trading of in futures, options contracts or exchange traded funds
         related to a Relevant Index, the Calculation Agent shall treat as a
         Relevant Index any sub-index used as a component index of the EAFE
         Index (such sub-indexes being commonly referred to as "component
         country indexes or component region indexes or component securities").

                  (iii)    For the purpose of determining whether trading in a
         security included in a Relevant Index is materially suspended or
         materially limited at that time, then the relevant percentage
         contribution of that security to the level of the disrupted index shall
         be based on a comparison of: the portion of the level of the disrupted
         index, component country index or component region index, as the case
         may be, attributable to that security relative to the overall level of
         the disrupted index, component country index or component region index,
         as the case may be, in each case immediately before that suspension or
         limitation.

                                      2-11          Issuance Date: March 6, 2007

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