Document:

ex10ooo.htm

    

      CREDIT
AGREEMENT

       

      Dated as
of April 11, 2008

       

      AT&T
INC., a Delaware corporation (the “Borrower”), the
banks, financial institutions and other institutional lenders (the “Initial Lenders”)
listed on the signature pages hereof, CITIGROUP GLOBAL MARKETS INC. and J.P.
MORGAN SECURITIES INC., as joint lead arrangers and joint bookrunners, JPMORGAN
CHASE BANK, N.A., as syndication agent, BANK OF AMERICA N.A., BARCLAYS BANK PLC,
DEUTSCHE BANK AG NEW YORK BRANCH, THE ROYAL BANK OF SCOTLAND PLC and UBS LOAN
FINANCE LLC, as co-documentation agents, and CITIBANK, N.A. (“Citibank”), as agent
(the “Agent”)
for the Lenders (as hereinafter defined), agree as follows:

       

      ARTICLE
I

       

      DEFINITIONS
AND ACCOUNTING TERMS

       

      SECTION 1.01.  Certain Defined
Terms.  As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

       

      “Advance” means an
advance by a Lender to the Borrower as part of a Borrowing and refers to a Base
Rate Advance or a Eurodollar Rate Advance (each of which shall be a “Type” of
Advance).

       

      “Affiliate” means, as
to any Person, any other Person that, directly or indirectly, controls, is
controlled by or is under common control with such Person or is a director or
officer of such Person.  For purposes of this definition, the term
“control” (including the terms “controlling”, “controlled by” and “under common
control with”) of a Person means the possession, direct or indirect, of the
power to vote 5% or more of the Voting Stock of such Person or to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by contract or otherwise.

       

      “Agent’s Account”
means the account of the Agent maintained by the Agent at Citibank at its office
at 388 Greenwich Street, New York, New York 10013, Account No. 36852248,
Attention:  Bank Loan Syndications.

       

      “Applicable Lending
Office” means, with respect to each Lender, such Lender’s Domestic
Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar
Lending Office in the case of a Eurodollar Rate Advance.

       

      “Applicable Margin”
means (a) for Base Rate Advances, 0% per annum and (b) for Eurodollar Rate
Advances, as of any date, an amount per annum expressed as a percentage of the
Index and determined by reference to the Public Debt Rating in effect on such
date as set forth below:

      

      
        	
                Public
      Debt Rating

                S&P/Moody’s

              	
                Applicable
      Margin for

                Eurodollar
      Rate Advances

              
	
                Level 1

                A+/
      A1

              	
                 

                50%
      of Index

              
	
                Level 2

                At
      least A/A2

              	
                 

                55%
      of Index

              
	
                Level 3

                Lower
      than Level 2

              	
                 

                75%
      of Index

              

      

      

      “Applicable
Percentage” means, as of any date a percentage per annum determined by
reference to the Public Debt Rating in effect on such date as set forth
below:

      

      
        	
                Public
      Debt Rating

                S&P/Moody’s

              	
                Applicable

                Percentage

              
	
                Level 1

                A+/
      A1

              	
                 

                0.040%

              
	
                Level 2

                At
      least A/A2

              	
                 

                0.050%

              
	
                Level 3

                Lower
      than Level 2

              	
                 

                0.060%

              

      

      

      “Assignment and
Acceptance” means an assignment and acceptance entered into by a Lender
and an Eligible Assignee, and accepted by the Agent, in substantially the form
of Exhibit C hereto.

       

      “Base Rate” means a
fluctuating interest rate per annum in effect from time to time, which rate per
annum shall at all times be equal to the highest of:

       

      (a)           the
rate of interest announced publicly by Citibank in New York, New York,
from time to time, as Citibank’s base rate;

       

      (b)           the
sum (adjusted to the nearest 1/4 of 1% or, if there is no nearest 1/4 of 1%, to
the next higher 1/4 of 1%) of (i) 1⁄2 of 1% per annum, plus (ii) the
rate obtained by dividing (A) the latest three-week moving average of
secondary market morning offering rates in the United States for three-month
certificates of deposit of major United States money market banks, such
three-week moving average (adjusted to the basis of a year of 360 days) being
determined weekly on each Monday (or, if such day is not a Business Day, on the
next succeeding Business Day) for the three-week period ending on the previous
Friday by Citibank on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank from three New York certificate of
deposit dealers of recognized standing selected by Citibank, by (B) a
percentage equal to 100% minus the average of the daily percentages specified
during such three-week period by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or other marginal
reserve requirement) for Citibank with respect to liabilities consisting of or
including (among other liabilities) three-month U.S. dollar non-personal time
deposits in the United States, plus (iii) the
average during such three-week period of the annual assessment rates estimated
by Citibank for determining the then current annual assessment payable by
Citibank to the Federal Deposit Insurance Corporation (or any successor) for
insuring U.S. dollar deposits of Citibank in the United States; and

       

      (c)           1⁄2
of one percent per annum above the Federal Funds Rate.

       

      “Base Rate Advance”
means an Advance that bears interest as provided in
Section 2.06(a)(i).

       

      “Borrowing” means a
borrowing consisting of simultaneous Advances of the same Type made by each of
the Lenders pursuant to Section 2.01.

       

      “Business Day” means a
day of the year on which banks are not required or authorized by law to close in
New York City and, if the applicable Business Day relates to any Eurodollar
Rate Advances, on which dealings are carried on in the London interbank
market.

       

      “Commitment” means as
to any Lender (a) the amount set forth opposite such Lender’s name on
Schedule I hereto or (b) if such Lender has entered into any Assignment and
Acceptance, the amount set forth for such Lender in the Register maintained by
the Agent pursuant to Section 8.06(d), as such amount may be reduced
pursuant to Section 2.04.

       

      “Consolidated” refers
to the consolidation of accounts in accordance with GAAP.

       

      “Consolidated EBITDA”
means, for any period, Consolidated Net Income for such period plus, to the extent
deducted in determining Consolidated Net Income for such period, the aggregate
amount of (a) interest expense, (b) income tax expense, (c) depreciation,
amortization and other similar non-cash charges and (d) extraordinary non-cash
losses and minus, to the extent
included in determining such Consolidated Net Income, the aggregate amount of
(i) interest income, (ii) income tax benefit and (iii) extraordinary non-cash
gains.  For the purpose of calculating Consolidated EBITDA for any
period, if during such period the Company or any Subsidiary shall have made a
Material Acquisition or Material Disposition, Consolidated EBITDA for such
period shall be calculated after giving pro forma effect to such Material
Acquisition or Material Disposition as if such Material Acquisition or Material
Disposition occurred on the first day of such period.  “Material Acquisition”
means any acquisition or series of related acquisitions that involves a
consideration (including non-cash consideration) with a fair market value in
excess of $1,000,000,000.  “Material Disposition”
means any disposition of property or series of related dispositions of property
that involves consideration (including non-cash consideration) with a fair
market value in excess of $1,000,000,000.

       

      “Consolidated Net
Income” means, for any period, the net income of the Borrower and its
Consolidated Subsidiaries, determined on a Consolidated basis for such period in
accordance with GAAP, adjusted to (a) exclude the effect of (i) equity gains or
losses in unconsolidated Persons, (ii) any extraordinary or other non-recurring
non-cash gain or loss (including non-cash restructuring charges and non-cash
charges for discontinued operations), (iii) any gain or loss on the disposition
of investments or (iv) any changes to Financial Accounting Standards Nos. 87 and
106 (or any subsequently adopted standards relating to pension and
postretirement benefits) adopted by the Financial Accounting Standards Board
after the Effective Date and (b) include the effects of any business or
businesses acquired as indicated on the pro forma financial statements prepared
in accordance with Regulation S-X of the Securities and Exchange
Commission.

       

      “Convert”, “Conversion” and
“Converted”
each refers to a conversion of Advances of one Type into Advances of the other
Type pursuant to Section 2.07 or 2.08.

       

      “Debt” of any Person
means, without duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments and (c) all guarantees by such Person of Debt of
others.

       

      “Debt for Borrowed
Money” of any Person means all items that, in accordance with GAAP, would
be  classified as indebtedness on a Consolidated balance sheet of such
Person.

       

      “Default” means any
Event of Default or any event that would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.

       

      “Domestic Lending
Office” means, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it became a Lender,
or such other office of such Lender as such Lender may from time to time specify
to the Borrower and the Agent.

       

      “Effective Date” has
the meaning specified in Section 3.01.

       

      “Eligible Assignee”
means (i) a Lender; (ii) an Affiliate of a Lender; and (iii) any
other Person approved by the Agent and, unless an Event of Default has occurred
and is continuing at the time any assignment is effected in accordance with
Section 8.06, the Borrower, such approvals not to be unreasonably withheld or
delayed; provided, however, that neither
the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee.

       

      “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and the regulations promulgated and rulings issued thereunder.

       

      “ERISA Affiliate”
means any Person that for purposes of Title IV of ERISA is a member of the
Borrower’s controlled group, or under common control with the Borrower, within
the meaning of Section 414 of the Internal Revenue Code.

       

      “Eurocurrency
Liabilities” has the meaning assigned to that term in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.

       

      “Eurodollar Lending
Office” means, with respect to any Lender, the office of such Lender
specified as its “Eurodollar Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.

       

      “Eurodollar Rate”
means, for any Interest Period for each Eurodollar Rate Advance comprising part
of the same Borrowing, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the rate per annum (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum) appearing on Reuters Screen LIBOR01 Page (or
any successor page) as the London interbank offered rate for deposits in U.S.
dollars at approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period
or, if for any reason such rate is not available, the average (rounded
upward to the nearest whole multiple of 1/16 of 1% per annum, if such average is
not such a multiple) of the rate per annum at which deposits in U.S. dollars are
offered by the principal office of each of the Reference Banks in London,
England to prime banks in the London interbank market at 11:00 A.M. (London
time) two Business Days before the first day of such Interest Period in an
amount substantially equal to such Reference Bank’s Eurodollar Rate Advance
comprising part of such Borrowing to be outstanding during such Interest Period
and for a period equal to such Interest Period by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest
Period.  If the Reuters Screen LIBOR01 Page (or any successor page) is
unavailable, the Eurodollar Rate for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing shall be determined by the
Agent on the basis of applicable rates furnished to and received by the Agent
from the Reference Banks two Business Days before the first day of such Interest
Period, subject, however, to the
provisions of Section 2.07.

       

      “Eurodollar Rate
Advance” means an Advance that bears interest as provided in
Section 2.06(a)(ii).

       

      “Eurodollar Rate Reserve
Percentage” for any Interest Period for all Eurodollar Rate Advances
comprising part of the same Borrowing means the reserve percentage applicable
two Business Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities
that includes deposits by reference to which the interest rate on Eurodollar
Rate Advances is determined) having a term equal to such Interest
Period.

       

      “Events of Default”
has the meaning specified in Section 6.01.

       

      “Existing Credit
Agreement” means the Five Year Credit Agreement dated as of July 12, 2006
among the Borrower, the lenders parties thereto and Citibank, N.A., as
administrative agent.

       

      “Federal Funds Rate”
means, for any period, a fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it.

       

      “GAAP” has the meaning
specified in Section 1.03.

       

      “Hedge Agreements”
means interest rate swap, cap or collar agreements, interest rate future or
option contracts, currency swap agreements, currency future or option contracts
and other similar agreements.

       

      “Index” means an
amount determined on the date of the initial Borrowing and thereafter on the
first day of July 2008 and October 2008 as the average of the Markit CDX.NA.IG
Series 10 or any successor series (5 Year Period) for the preceding 30 days or,
if fewer, the number of days for which the then current series is in
effect.

       

      “Information” has the
meaning specified in Section 8.07.

       

      “Interest Period”
means, for each Eurodollar Rate Advance comprising part of the same Borrowing,
the period commencing on the date of such Eurodollar Rate Advance or the date of
the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions
below.  The duration of each such Interest Period shall be one, two,
three or six months as the Borrower may, upon notice received by the Agent not
later than 11:00 A.M. (New York City time) on the third Business Day
prior to the first day of such Interest Period, select; provided, however,
that:

       

      (a)           the
Borrower may not select any Interest Period that ends after the Termination
Date;

       

      (b)           Interest
Periods commencing on the same date for Eurodollar Rate Advances comprising part
of the same Borrowing shall be of the same duration;

       

      (c)           whenever
the last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period shall occur
on the next preceding Business Day; and

       

      (d)           whenever
the first day of any Interest Period occurs on a day of an initial calendar
month for which there is no numerically corresponding day in the calendar month
that succeeds such initial calendar month by the number of months equal to the
number of months in such Interest Period, such Interest Period shall end on the
last Business Day of such succeeding calendar month.

       

      “Internal Revenue
Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued
thereunder.

       

      “Lenders” means the
Initial Lenders and each Person that shall become a party hereto pursuant to
Section 8.06.

       

      “Lien” means any lien,
security interest or other charge or encumbrance of any kind, or any other type
of preferential arrangement, including, without limitation, the lien or retained
security title of a conditional vendor.

       

      “Material Adverse
Change” means any material adverse change in the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrower or the Borrower and its Subsidiaries taken as a whole.

       

      “Material Adverse
Effect” means a material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower and its Subsidiaries taken as a whole, (b) the
rights and remedies of the Agent or any Lender under this Agreement or any Note
or (c) the ability of the Borrower to perform its obligations under this
Agreement or any Note.

       

      “Moody’s” means
Moody’s Investors Service, Inc.

       

      “Multiple Employer
Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Borrower or any ERISA Affiliate and at least one Person other than the
Borrower and the ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.

       

      “Net Tangible Assets”
means, at any date, with respect to the Borrower, the total assets appearing on
the most recently prepared Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the most recent fiscal quarter of the Borrower for
which such balance sheet is available, prepared in accordance with GAAP, less
(a) all current liabilities as shown on such balance sheet and (b) the value
(net of any applicable reserves), as shown on such balance sheet of (i) all
trade names, trademarks, licenses, patents, copyrights and goodwill, (ii)
organizational costs and (iii) deferred charges (other than prepaid items such
as insurance, taxes, interest, commissions, rents and similar items and tangible
assets being amortized).

       

      “Note” means a
promissory note of the Borrower payable to the order of any Lender, delivered
pursuant to a request made under Section 2.15 in substantially the form of
Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to
such Lender resulting from the Advances made by such Lender.

       

      “Notice of Borrowing”
has the meaning specified in Section 2.02(a).

       

      “Patriot Act” means
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, as it may be
amended or otherwise modified from time to time.

       

      “PBGC” means the
Pension Benefit Guaranty Corporation (or any successor).

       

      “Permitted Liens”
means such of the following as to which no enforcement, collection, execution,
levy or foreclosure proceeding shall have been
commenced:  (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under
Section 5.01(b) hereof; (b) Liens imposed by law, such as
materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other
similar Liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than 30 days; (c) pledges or
deposits to secure obligations under workers’ compensation laws or similar
legislation or to secure public or statutory obligations; and
(d) easements, rights of way and other encumbrances on title to real
property that do not render title to the property encumbered thereby
unmarketable or materially adversely affect the use of such property for its
present purposes.

       

      “Person” means an
individual, partnership, corporation (including a business trust), joint stock
company, trust, unincorporated association, joint venture, limited liability
company or other entity, or a government or any political subdivision or agency
thereof.

       

      “Plan” means a Single
Employer Plan or a Multiple Employer Plan.

       

      “Public Debt Rating”
means, as of any date, the rating that has been most recently announced by
either S&P or Moody’s, as the case may be, for any class of non-credit
enhanced long-term senior unsecured debt issued by the Borrower or, if any such
rating agency shall have issued more than one such rating, the lowest such
rating issued by such rating agency.  For purposes of the foregoing,
(a) if only one of S&P and Moody’s shall have in effect a Public Debt
Rating, the Applicable Margin and the Applicable Percentage shall be determined
by reference to the available rating; (b) if neither S&P nor Moody’s
shall have in effect a Public Debt Rating, the Applicable Margin and the
Applicable Percentage will be set in accordance with Level 3 under the
definition of “Applicable Margin” or
“Applicable
Percentage”, as the case may be; (c) if the ratings established by
S&P and Moody’s fall within different levels, the Applicable Margin and the
Applicable Percentage shall be based upon the higher rating, unless the
difference between such ratings is two or more levels, in which case the
Applicable Margin and the Applicable Percentage shall be based upon the rating
that is one level above the lower of such ratings; (d) if any rating
established by S&P or Moody’s shall be changed, such change shall be
effective as of the date on which such change is first announced publicly by the
rating agency making such change; and (e) if S&P or Moody’s shall
change the basis on which ratings are established, each reference to the Public
Debt Rating announced by S&P or Moody’s, as the case may be, shall refer to
the then equivalent rating by S&P or Moody’s, as the case may
be.

       

      “Receivables
Securitization” means sales of accounts receivable of the Borrower or any
of its Subsidiaries in connection with agreements for limited recourse or
non-recourse sales by the Borrower or Subsidiary for cash, provided that (a) any
such agreement is of a type and on terms customary for comparable transactions
in the good faith judgment of the Board of Directors of the Borrower or
Subsidiary and (b) such agreement does not create any interest in any asset
other than accounts receivable (and property securing or otherwise supporting
accounts receivable) and proceeds of the foregoing.

       

      “Reference Banks”
means Citibank, JPMorgan Chase Bank, N.A., Bank of America, N.A., Deutsche Bank
AG New York Branch and Barclays Bank PLC.

       

      “Register” has the
meaning specified in Section 8.06(d).

       

      “Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.

       

      “Required Lenders”
means at any time Lenders owed at least a majority in interest of the then
aggregate unpaid principal amount of the Advances owing to Lenders, or, if no
such principal amount is then outstanding, Lenders having at least a majority in
interest of the Commitments.

       

      “S&P” means
Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc.

       

      “Single Employer Plan”
means a single employer plan, as defined in Section 4001(a)(15) of ERISA,
that (a) is maintained for employees of the Borrower or
any  ERISA Affiliate and no Person other than the Borrower and the
ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.

       

      “Subsidiary” of any
Person means any corporation, partnership, joint venture, limited liability
company, trust or estate of which (or in which) more than 50% of (a) the
issued and outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation (irrespective of whether
at the time capital stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such limited liability
company, partnership or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person’s other Subsidiaries, provided, for
purposes of this Agreement, Cingular Wireless shall be deemed not to be a
Subsidiary of the Borrower until the closing of the acquisition of 100 percent
of the common stock of BellSouth Corporation by the Borrower.

       

      “Termination Date”
means the earlier of (a) December 15, 2008 and (b) the date of termination in
whole of the Commitments pursuant to Section 2.04 or 6.01.

       

      “Voting Stock” means
capital stock issued by a corporation, or equivalent interests in any other
Person, the holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended by
the happening of such a contingency.

       

      SECTION
1.02.  Computation of Time
Periods.  In this Agreement in the computation of periods of
time from a specified date to a later specified date, the word
“from”  means “from and including” and the words “to” and “until” each
mean “to but excluding”.

       

      SECTION
1.03.  Accounting
Terms.  All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
referred to in Section 4.01(e) (“GAAP”).

       

      ARTICLE
II

       

      AMOUNTS
AND TERMS OF THE ADVANCES

       

      SECTION
2.01.  The
Advances.  Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make Advances to the Borrower from time to
time on any Business Day during the period from the Effective Date until the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender’s Commitment.  Each Borrowing shall be in an aggregate
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof
and shall consist of Advances of the same Type made on the same day by the
Lenders ratably according to their respective Commitments.  Within the
limits of each Lender’s Commitment, the Borrower may borrow under this Section
2.01, prepay pursuant to Section 2.09 and reborrow under this
Section 2.01.

       

      SECTION
2.02.  Making the
Advances.  (a)  Each Borrowing shall be made on
notice, given not later than (x) 11:00 A.M. (New York City time)
on the third Business Day prior to the date of the proposed Borrowing in the
case of a Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M.
(New York City time) on the date of the proposed Borrowing in the case of a
Borrowing consisting of Base Rate Advances, by the Borrower to the Agent, which
shall give to each Lender prompt notice thereof by telecopier.  Each
such notice of a Borrowing (a “Notice of Borrowing”)
shall be by telephone, confirmed immediately in writing, or telecopier in
substantially the form of Exhibit B hereto, specifying therein the
requested (i) date of such Borrowing, (ii) Type of Advances comprising
such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Advance.  Each Lender shall, before
1:00 P.M. (New York City time) on the date of such Borrowing make
available for the account of its Applicable Lending Office to the Agent at the
Agent’s Account, in same day funds, such Lender’s ratable portion of such
Borrowing.  After the Agent’s receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower at the Agent’s address
referred to in Section 8.02.

       

      (b)           Anything
in subsection (a) above to the contrary notwithstanding, (i) the
Borrower may not select Eurodollar Rate Advances for any Borrowing if the
aggregate amount of such Borrowing is less than $10,000,000 or if the obligation
of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant
to Section 2.07 or 2.11 and (ii) the Eurodollar Rate Advances may not
be outstanding as part of more than 12 separate Borrowings.

       

      (c)           Each
Notice of Borrowing shall be irrevocable and binding on the
Borrower.  In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such Borrowing the applicable conditions set forth
in Article III, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.

       

      (d)           Unless
the Agent shall have received notice from a Lender prior to the time of any
Borrowing that such Lender will not make available to the Agent such Lender’s
ratable portion of such Borrowing, the Agent may assume that such Lender has
made such portion available to the Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount.  If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to Advances comprising such Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate. If such Lender shall repay to
the Agent such corresponding amount, such amount so repaid shall constitute such
Lender’s Advance as part of such Borrowing for purposes of this
Agreement.

       

      (e)           The
failure of any Lender to make the Advance to be made by it as part of any
Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.

       

      SECTION
2.03.  Fees.  (a)  Commitment
Fee.  The Borrower agrees to pay to the Agent for the account
of each Lender a commitment fee on the amount of such Lender’s unused Commitment
then in effect from the Effective Date in the case of each Initial Lender and
from the effective date specified in the Assignment and Acceptance pursuant to
which it became a Lender in the case of each other Lender until the Termination
Date at a rate per annum equal to the Applicable Percentage in effect from time
to time, payable in arrears quarterly on the last day of June 2008 and September
2008, commencing June 30, 2008, and on the Termination Date.

       

      (b)           Agent’s
Fees.  The Borrower shall pay to the Agent for its own account
such fees as may from time to time be agreed between the Borrower and the
Agent.

       

      SECTION
2.04.  Optional Termination or
Reduction of the Commitments.  The Borrower shall have the
right, upon at least three Business Days’ notice to the Agent, to terminate in
whole or permanently reduce ratably in part the unused portions of the
respective Commitments of the Lenders, provided that each
partial reduction shall be in the aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof.

       

      SECTION
2.05.  Repayment of
Advances.  The Borrower shall repay to the Agent for the
ratable account of each Lender on the Termination Date the aggregate principal
amount of the Advances made by such Lender then outstanding.

       

      SECTION
2.06.  Interest on
Advances.  (a)  Scheduled
Interest.  The Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:

       

      (i)           Base Rate
Advances.  During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the Base Rate in effect from
time to time, payable in arrears quarterly on the last day of each March, June,
September and December during such periods and on the date such Base Rate
Advance shall be Converted or paid in full.

       

      (ii)           Eurodollar Rate
Advances.  During such periods as such Advance is a Eurodollar
Rate Advance, a rate per annum equal at all times during each Interest Period
for such Advance to the sum of (x) the Eurodollar Rate for such Interest
Period for such Advance plus (y) the
Applicable Margin in effect from time to time, payable in arrears on the last
day of such Interest Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest Period every
three months from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.

       

      (b)           Default
Interest.  Upon the occurrence and during the continuance of an
Event of Default under Section 6.01(a) the Agent shall, and upon the occurrence
and during the continuance of any other Event of Default, the Agent may, and
upon the request of the Required Lenders shall, require the Borrower to pay
interest (“Default
Interest”) on (i) the unpaid principal amount of each Advance owing
to each Lender, payable in arrears on the dates referred to in
clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to
2% per annum above the rate per annum required to be paid on such Advance
pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest
extent permitted by law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on Base Rate
Advances pursuant to clause (a)(i) above, provided, however, that
following acceleration of the Advances pursuant to Section 6.01, Default
Interest shall accrue and be payable hereunder whether or not previously
required by the Agent.

       

      SECTION
2.07.  Interest Rate
Determination.  (a)  Each Reference Bank agrees to
furnish to the Agent timely information for the purpose of determining each
Eurodollar Rate.  If any one or more of the Reference Banks shall not
furnish such timely information to the Agent for the purpose of determining any
such interest rate, the Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks.  The
Agent shall give prompt notice to the Borrower and the Lenders of each
determination of the Index, the applicable interest rate determined by the Agent
for purposes of Section 2.06(a)(i) or (ii), and the rate, if any, furnished
by each Reference Bank for the purpose of determining the interest rate under
Section 2.06(a)(ii).

       

      (b)           If,
with respect to any Eurodollar Rate Advances, the Required Lenders notify the
Agent that the Eurodollar Rate for any Interest Period for such Advances will
not adequately reflect the cost to such Required Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances for such Interest Period,
the Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i)
each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance, and (ii)
the obligation of the Lenders to make, or to Convert Advances into, Eurodollar
Rate Advances shall be suspended until the Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no longer
exist.

       

      (c)           If
the Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Advances in accordance with the provisions contained in the
definition of “Interest Period” in Section 1.01, the Agent will forthwith
so notify the Borrower and the Lenders and such Advances will automatically, on
the last day of the then existing Interest Period therefor, Convert into Base
Rate Advances.

       

      (d)           On
the date on which the aggregate unpaid principal amount of Eurodollar Rate
Advances comprising any Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $10,000,000, such Advances shall automatically Convert
into Base Rate Advances.

       

      (e)           Upon
the occurrence and during the continuance of any Event of Default, (i) each
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended.

       

      (f)           If
Reuters Screen LIBOR01 Pare is unavailable and fewer than two Reference Banks
furnish timely information to the Agent for determining the Eurodollar Rate for
any Eurodollar Rate Advances,

       

      (i)           the
Agent shall forthwith notify the Borrower and the Lenders that the interest rate
cannot be determined for such Eurodollar Rate Advances,

       

      (ii)           with
respect to Eurodollar Rate Advances, each such Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance (or if such Advance is then a Base Rate Advance, will continue as a
Base Rate Advance), and

       

      (iii)           the
obligation of the Lenders to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.

       

      (g)           If
the Index is unavailable, (i) each Eurodollar Rate Advance will automatically,
on the last day of the then existing Interest Period therefor, Convert into a
Base Rate Advance, and (ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the earlier of
(x) the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist or (y) the Borrower and the Lenders
agree on an alternative method for establishing the Applicable Margin for
Eurodollar Rate Advances.

       

      SECTION
2.08.  Optional Conversion of
Advances.  The Borrower may on any Business Day, upon notice
given to the Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the date of the proposed Conversion and subject
to the provisions of Sections 2.07 and 2.11, Convert all Advances of one
Type comprising the same Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(b) and
no Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(b).  Each such notice of a
Conversion shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Advances to be Converted, and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of
the initial Interest Period for each such Advance.  Each notice of
Conversion shall be irrevocable and binding on the Borrower.

       

      SECTION
2.09.  Optional Prepayments of
Advances.  The Borrower may, upon notice at least two Business
Days’ prior to the date of such prepayment, in the case of Eurodollar Rate
Advances, and not later than 11:00 A.M. (New York City time) on the date of such
prepayment, in the case of Base Rate Advances, to the Agent stating the proposed
date and aggregate principal amount of the prepayment, and if such notice is
given the Borrower shall, prepay the outstanding principal amount of the
Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (x)
each partial prepayment shall be in an aggregate principal amount of $10,000,000
or an integral multiple of $1,000,000 in excess thereof  and
(y) in the event of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 8.04(c).

       

      SECTION
2.10.  Increased
Costs.  (a)  If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining Eurodollar Rate Advances (excluding for
purposes of this Section 2.10 any  such increased costs resulting from
(i) Taxes or Other Taxes (as to which Section 2.13 shall govern) and (ii)
changes in the basis of taxation of overall net income or overall gross income
by the United States or by the foreign jurisdiction or state under the laws of
which such Lender is organized or has its Applicable Lending Office or any
political subdivision thereof), then the Borrower shall from time to time, upon
demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender additional amounts sufficient to compensate
such Lender for such increased cost provided, however, that before
making any such demand, each Lender agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.  A certificate as to the amount of such increased cost,
submitted to the Borrower and the Agent by such Lender, shall be conclusive and
binding for all purposes, absent manifest error.

       

      (b)           If
any Lender determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
or other entity controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender’s commitment to lend
hereunder and other commitments of this type, then, upon demand by such Lender
(with a copy of such demand to the Agent), the Borrower shall pay to the Agent
for the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender’s commitment to lend hereunder.  A certificate as to such
amounts submitted to the Borrower and the Agent by such Lender shall be
conclusive and binding for all purposes, absent manifest error.

       

      SECTION
2.11.  Illegality.  Notwithstanding
any other provision of this Agreement, if any Lender shall notify the Agent that
the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate
Advance will automatically, upon such demand, Convert into a Base Rate Advance,
and (b) the obligation of the Lenders to make Eurodollar Rate Advances or
to Convert Advances into Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrower and the Lenders that the circumstances causing
such suspension no longer exist; provided, however, that before
making any such demand, each Lender agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation would
allow such Lender or its Eurodollar Lending Office to continue to perform its
obligations to make Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.

       

      SECTION
2.12.  Payments and
Computations.  (a)  The Borrower shall make each
payment hereunder, without counterclaim or set-off, not later than 11:00 A.M.
(New York City time) on the day when due in U.S. dollars to the Agent at the
Agent’s Account in same day funds.  The Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or
interest or commitment fees ratably (other than amounts payable pursuant to
Section 2.10, 2.13 or 8.04(c)) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Lender to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement.  Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 8.06(c), from and after the effective date specified in
such Assignment and Acceptance, the Agent shall make all payments hereunder and
under the Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.

       

      (b)           All
computations of interest based on the Base Rate shall be made by the Agent on
the basis of a year of 365 or 366 days, as the case may be, and all computations
of interest based on the Eurodollar Rate or the Federal Funds Rate and of
commitment fees shall be made by the Agent on the basis of a year of 360 days,
in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest or
commitment fees are payable.  Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.

       

      (c)           Whenever
any payment hereunder or under the Notes shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or commitment fee, as the case may be; provided, however, that, if
such extension would cause payment of interest on or principal of Eurodollar
Rate Advances to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.

       

      (d)           Unless
the Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the Lenders hereunder that the Borrower will not
make such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the Agent may, in reliance upon
such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender.  If and to the extent
the Borrower shall not have so made such payment in full to the Agent, each
Lender shall repay to the Agent forthwith on demand such amount distributed to
such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.

       

      SECTION
2.13.  Taxes.  (a)  Any
and all payments by the Borrower to or for the account of any Lender or the
Agent hereunder or under the Notes or any other documents to be delivered
hereunder shall be made, in accordance with Section 2.12 or the applicable
provisions of such other documents, free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction
under the laws of which such Lender or the Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender,
taxes imposed on its overall net income, and franchise taxes imposed on it in
lieu of net income taxes, by the jurisdiction of such Lender’s Applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Notes being hereinafter referred to
as “Taxes”).  If
the Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any Note or any other documents to be
delivered hereunder to any Lender or the Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.13) such Lender or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.

       

      (b)           In
addition, the Borrower shall pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or under the Notes or any other documents
to be delivered hereunder or from the execution, delivery or registration of,
performing under, or otherwise with respect to, this Agreement or the Notes or
any other documents to be delivered hereunder (hereinafter referred to as “Other
Taxes”).

       

      (c)           The
Borrower shall indemnify each Lender and the Agent for and hold it harmless
against the full amount of Taxes or Other Taxes (including, without limitation,
taxes of any kind imposed or asserted by any jurisdiction on amounts payable
under this Section 2.13) imposed on or paid by such Lender or the Agent (as
the case may be) and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto.  This indemnification shall
be made within 30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor.

       

      (d)           Within
30 days after the date of any payment of Taxes, the Borrower shall furnish to
the Agent, at its address referred to in Section 8.02, the original or a
certified copy of a receipt evidencing such payment to the extent such a receipt
is issued therefor, or other written proof of payment thereof that is reasonably
satisfactory to the Agent.

       

      (e)           Each
Lender organized under the laws of a jurisdiction outside the United States, on
or prior to the date of its execution and delivery of this Agreement in the case
of each Initial Lender and on the date of the Assignment and Acceptance pursuant
to which it becomes a Lender in the case of each other Lender, and from time to
time thereafter as reasonably requested in writing by the Borrower (but only so
long as such Lender remains lawfully able to do so), shall provide each of the
Agent and the Borrower with two original Internal Revenue Service
forms W-8BEN or W-8ECI, as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement or the Notes.  If the form
provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender provides the appropriate forms certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such form; provided, however, that, if at
the date of the Assignment and Acceptance pursuant to which a Lender assignee
becomes a party to this Agreement, the Lender assignor was entitled to payments
under subsection (a) in respect of United States withholding tax with
respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender assignee on such
date.  If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form W-8BEN or W-8ECI, that the Lender reasonably considers
to be confidential, the Lender shall give notice thereof to the Borrower and
shall not be obligated to include in such form or document such confidential
information.  For purposes of this subsection (e), the terms “United States” and
“United States
person” shall have the meanings specified in Section 7701 of the
Internal Revenue Code.

       

      (f)           For
any period with respect to which a Lender has failed to provide the Borrower
with the appropriate form, certificate or other document described in
Section 2.13(e) (other than if such failure
is due to a change in law, or in the interpretation or application thereof,
occurring subsequent to the date on which a form, certificate or other document
originally was required to be provided, or if such form, certificate or other
document otherwise is not required under subsection (e) above), such Lender
shall not be entitled to indemnification under Section 2.13(a) or (c) with
respect to Taxes imposed by the United States by reason of such failure; provided, however, that should
a Lender become subject to Taxes because of its failure to deliver a form,
certificate or other document required hereunder, the Borrower shall take such
steps as the Lender shall reasonably request, and at such Lender’s expense, to
assist the Lender to recover such Taxes.

       

      (g)           Any
Lender claiming any additional amounts payable pursuant to this
Section 2.13 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.

       

      SECTION
2.14.  Sharing of Payments,
Etc.  If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Advances owing to it (other than pursuant to
Section 2.10, 2.13 or 8.04(c)) in excess of its ratable share of payments
on account of the Advances obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the Advances
owing to them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all
or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender’s ratable share
(according to the proportion of (i) the amount of such Lender’s required
repayment to (ii) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered.  The Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this
Section 2.14 may, to the fullest extent permitted by law, exercise all its
rights of payment with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such
participation.

       

      SECTION
2.15.  Evidence of
Debt.  (a)  Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Advance owing to such Lender
from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder in respect of
Advances.  The Borrower agrees that upon notice by any Lender to the
Borrower (with a copy of such notice to the Agent) to the effect that a Note is
required or appropriate in order for such Lender to evidence (whether for
purposes of pledge, enforcement or otherwise) the Advances owing to, or to be
made by, such Lender, the Borrower shall promptly execute and deliver to such
Lender a Note payable to the order of such Lender in a principal amount up to
the Commitment of such Lender.  Each Lender that receives a Note
pursuant to this Section 2.15 agrees that, upon the earlier of the termination
or expiration of this Agreement, such Lender will return such Note to the
Borrower.

       

      (b)           The
Register maintained by the Agent pursuant to Section 8.06(d) shall include a
control account, and a subsidiary account for each Lender, in which accounts
(taken together) shall be recorded (i) the date and amount of each Borrowing
made hereunder, the Type of Advances comprising such Borrowing and, if
appropriate, the Interest Period applicable thereto, (ii) the terms of each
Assignment and Acceptance delivered to and accepted by it, (iii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iv) the amount of any sum received by the
Agent from the Borrower hereunder and each Lender’s share thereof.

       

      (c)           Entries
made in good faith by the Agent in the Register pursuant to subsection (b)
above, and by each Lender in its account or accounts pursuant to subsection (a)
above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement, absent manifest
error; provided, however, that the
failure of the Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this
Agreement.

       

      SECTION
2.16.  Use
of Proceeds.  The proceeds of the Advances shall be available
(and the Borrower agrees that it shall use such proceeds) solely for general
corporate purposes of the Borrower and its Subsidiaries.

       

      ARTICLE
III

       

      CONDITIONS
TO EFFECTIVENESS AND LENDING

       

      SECTION
3.01.  Conditions Precedent to
Effectiveness of Section 2.01.  Section 2.01 of this
Agreement shall become effective on and as of the first date (the “Effective Date”) on
which the following conditions precedent have been satisfied:

       

      (a)           Except
as disclosed in filings with the Securities and Exchange Commission prior to the
Effective Date, there shall have occurred no Material Adverse Change since
December 31, 2007.

       

      (b)           There
shall exist no action, suit, investigation, litigation or proceeding affecting
the Borrower or any of its Subsidiaries pending or overtly threatened before any
court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby.

       

      (c)           The
Lenders shall have been given such access to the management of the Borrower and
its Subsidiaries as they shall have requested.

       

      (d)           All
governmental and third party consents and approvals necessary in connection with
the transactions contemplated hereby shall have been obtained (without the
imposition of any conditions that are not acceptable to the Lenders) and shall
remain in effect, and no law or regulation shall be applicable in the reasonable
judgment of the Lenders that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.

       

      (e)           The
Borrower shall have notified the Agent in writing as to the proposed Effective
Date.

       

      (f)           The
Borrower shall have paid all accrued fees and expenses of the Agent and the
Lenders (including the accrued fees and expenses of counsel to the
Agent).

       

      (g)           On
the Effective Date, the following statements shall be true and the Agent shall
have received for the account of each Lender a certificate signed by a duly
authorized officer of the Borrower, dated the Effective Date, stating
that:

       

      (i)           The
representations and warranties contained in Section 4.01 are correct on and
as of the Effective Date, and

       

      (ii)           No
event has occurred and is continuing that constitutes a Default.

       

      (h)           The
Agent shall have received on or before the Effective Date the following, each
dated such day, in form and substance satisfactory to the Agent and (except for
the Notes) in sufficient copies for each Lender:

       

      (i)           The
Notes to the order of the Lenders to the extent requested by any Lender pursuant
to Section 2.15.

       

      (ii)           Certified
copies of the resolutions of the Board of Directors of the Borrower approving
this Agreement and the Notes, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Agreement and the Notes.

       

      (iii)           A
certificate of the Secretary or an Assistant Secretary of the Borrower
certifying the names and true signatures of the officers of the Borrower
authorized to sign this Agreement and the Notes and the other documents to be
delivered hereunder.

       

      (iv)           A
favorable opinion of the general counsel of the Borrower, substantially in the
form of Exhibit D hereto and as to such other matters as any Lender through
the Agent may reasonably request.

       

      (v)           A
favorable opinion of Shearman & Sterling LLP, counsel for the Agent, in form
and substance satisfactory to the Agent.

       

      SECTION
3.02.  Conditions Precedent to Each
Borrowing.  The obligation of each Lender to make an Advance on
the occasion of each Borrowing shall be subject to the conditions precedent that
the Effective Date shall have occurred and on the date of such Borrowing
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing such statements are
true):

       

      (i)           the
representations and warranties contained in Section 4.01 (except the
representations set forth in the last sentence of subsection (e) thereof
and in subsection (f)(i) thereof) are correct on and as of such date,
before and after giving effect to such Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date,

       

      (ii)           no
event has occurred and is continuing, or would result from such Borrowing or
from the application of the proceeds therefrom, that constitutes a Default,
and

       

      (iii)           the
Borrowing is within any applicable debt limitations established by the Board of
Directors of the Borrower;

       

      and
(b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request related to
clauses (a)(i) or (ii) of this Section.

       

      SECTION
3.03.  Determinations Under Section
3.01.  For purposes of determining compliance with the
conditions specified in Section 3.01, each Lender shall be deemed to have
consented to, approved or accepted or to be satisfied with each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to the Lenders unless an officer of the Agent responsible for
the transactions contemplated by this Agreement shall have received notice from
such Lender prior to the date that the Borrower, by notice to the Lenders,
designates as the proposed Effective Date, specifying its objection
thereto.  The Agent shall promptly notify the Lenders of the
occurrence of the Effective Date.

       

      ARTICLE
IV

       

      REPRESENTATIONS
AND WARRANTIES

       

      SECTION
4.01.  Representations and
Warranties of the Borrower.  The Borrower represents and
warrants as follows:

       

      (a)           The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.

       

      (b)           The
execution, delivery and performance by the Borrower of this Agreement and the
Notes to be delivered by it, and the consummation of the transactions
contemplated hereby, are within the Borrower’s corporate powers, have been duly
authorized by all necessary corporate action, subject to any applicable debt
limitations established by the Board of Directors of the Borrower, and do not
contravene (i) the Borrower’s charter or by-laws or (ii) law or any
contractual restriction binding on or affecting the Borrower.

       

      (c)           No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or any other third party is
required for the due execution, delivery and performance by the Borrower of this
Agreement or the Notes to be delivered by it.

       

      (d)           This
Agreement has been, and each of the Notes to be delivered by it when delivered
hereunder will have been, duly executed and delivered by the
Borrower.  This Agreement is, and each of the Notes when delivered
hereunder will be, the legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with their respective
terms.

       

      (e)           The
Consolidated balance sheet of the Borrower and its Subsidiaries as at
December 31, 2007, and the related Consolidated statements of income and
cash flows of the Borrower and its Subsidiaries for the fiscal year then ended,
accompanied by an opinion of Ernst & Young LLP, independent public
accountants, copies of which have been furnished to each Lender, fairly present
in all material respects the Consolidated financial condition of the Borrower
and its Subsidiaries as at such date and the Consolidated results of the
operations of the Borrower and its Subsidiaries for the period ended on such
date, all in accordance with generally accepted accounting principles
consistently applied.  Except as disclosed in filings with the
Securities and Exchange Commission prior to the Effective Date, since
December 31, 2007, there has been no Material Adverse Change.

       

      (f)           There
is no pending or threatened action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator that (i) is not disclosed in a filing by
the Borrower with the Securities and Exchange Commission and could be reasonably
likely to have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby.

       

      (g)           The
Borrower is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), and no proceeds
of any Advance will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin
stock.

       

      (h)           The
Borrower is not an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.

       

      ARTICLE
V

       

      COVENANTS
OF THE BORROWER

       

      SECTION
5.01.  Affirmative
Covenants.  So long as any Advance shall remain unpaid or any
Lender shall have any Commitment hereunder, the Borrower will:

       

      (a)           Compliance with Laws,
Etc.  Comply, and cause each of its Subsidiaries to comply, in
all material respects, with all applicable laws, rules, regulations and orders,
such compliance to include, without limitation, compliance with ERISA and the
Patriot Act.

       

      (b)           Payment of Taxes,
Etc.  Pay and discharge, and cause each of its Subsidiaries to
pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims that, if unpaid, might by law become a
Lien upon its property; provided, however, that neither
the Borrower nor any of its Subsidiaries shall be required to pay or discharge
any such tax, assessment, charge or claim that is being contested in good faith
and by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to its
property and becomes enforceable against its other creditors.

       

      (c)           Maintenance of
Insurance.  Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates; provided, however, that the
Borrower and its Subsidiaries may self-insure to the extent consistent with
prudent business practice.

       

      (d)           Preservation of Corporate
Existence, Etc.  Preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its corporate existence, rights (charter
and statutory) and franchises; provided, however, that the
Borrower and its Subsidiaries may consummate any merger or consolidation
permitted under Section 5.02(b) and provided further that neither
the Borrower nor any of its Subsidiaries shall be required to preserve any right
or franchise if the Board of Directors of the Borrower or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Borrower or such Subsidiary, as the case may be, and that
the loss thereof is not disadvantageous in any material respect to the Borrower
or such Subsidiary.

       

      (e)           Visitation
Rights.  At any reasonable time and from time to time during
normal business hours, permit the Agent or any of the Lenders or any agents or
representatives thereof, to examine the records and books of account of, and
visit the properties of, the Borrower and any of its Subsidiaries, and, upon
execution of a confidentiality agreement, to discuss the affairs, finances and
accounts of the Borrower and any of its Subsidiaries with any of the officers or
directors of the Borrower and with their independent certified public
accountants, provided, however, that
examination of the records and books of account of the Borrower or any of its
Subsidiaries shall occur only at times when an Advance or Advances shall be
outstanding.

       

      (f)           Keeping of
Books.  Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Borrower
and each such Subsidiary in accordance with generally accepted accounting
principles in effect from time to time.

       

      (g)           Maintenance of Properties,
Etc.  Maintain and preserve, and cause each of its Subsidiaries
to maintain and preserve, all of its properties that are used or useful in the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.

       

      (h)           Reporting
Requirements.  Furnish to the Lenders:

       

      (i)           as
soon as available and in any event within 40 days after the end of each of the
first three quarters of each fiscal year of the Borrower, the Consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such quarter
and Consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, duly certified (subject to year-end
audit adjustments) by the chief financial officer of the Borrower as having been
prepared in accordance with generally accepted accounting principles (it being
understood that the certification provided by the chief financial officer in
compliance with the Sarbanes-Oxley Act is acceptable for this purpose) and
certificates of the chief financial officer of the Borrower as to compliance
with the terms of this Agreement and setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Section 5.03, provided that in the
event of any change since the Effective Date in generally accepted accounting
principles used in the preparation of such financial statements, the Borrower
shall provide the financial information required for the determination of
compliance with Section 5.03 based on GAAP in effect as of the Effective
Date;

       

      (ii)           as
soon as available and in any event within 75 days after the end of each fiscal
year of the Borrower, a copy of the annual report for such year for the Borrower
containing the Consolidated balance sheet of the Borrower and its Subsidiaries
as of the end of such fiscal year and Consolidated statements of income and cash
flows of the Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by an opinion by Ernst & Young LLP or other independent public
accountants of national standing to the effect that such Consolidated financial
statements fairly present its financial condition and results of operations on a
Consolidated basis in accordance with generally accepted accounting principles
consistently applied and certificates of the chief financial officer of the
Borrower as to compliance with the terms of this Agreement and setting forth in
reasonable detail the calculations necessary to demonstrate compliance with
Section 5.03, provided that in the
event of any change since the Effective Date in generally accepted accounting
principles used in the preparation of such financial statements, the Borrower
shall provide the financial information required for the determination of
compliance with Section 5.03 based on GAAP in effect as of the Effective
Date;

       

      (iii)           as
soon as possible and in any event within five days after the occurrence of each
Default continuing on the date of such statement, a statement of the chief
financial officer of the Borrower setting forth details of such Default and the
action that the Borrower has taken and proposes to take with respect
thereto;

       

      (iv)           if
Advances are outstanding and if such are not available on the Internet at
www.att.com, www.sec.gov or another website designated by the Borrower, promptly
after the sending or filing thereof, copies of all reports that the Borrower
sends to any of its securityholders, and copies of all reports and registration
statements that the Borrower or any Subsidiary files with the Securities and
Exchange Commission or any national securities exchange;

       

      (v)           prompt
notice of the commencement of all actions and proceedings before any court,
governmental agency or arbitrator affecting the Borrower or any of its
Subsidiaries of the type described in Section 4.01(f); and

       

      (vi)           such
other information respecting the Borrower or any of its Subsidiaries as any
Lender through the Agent may from time to time reasonably request of a material
nature that may reasonably relate to the condition (financial or otherwise),
operations, properties or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole.

       

      Reports
and financial statements required to be furnished by the Borrower pursuant to
clauses (i), (ii) and (iv) of this subsection (h) shall be deemed to have been
furnished on the earlier of (A) the date on which such reports and financial
statements are posted on the Internet at www.sec.gov or (B) the date on which
the Borrower posts such reports, or reports containing such financial
statements, on its website on the Internet at www.att.com or at such other
website identified by the Borrower in a notice to the Agent and the Lenders and
that is accessible by the Lenders without charge; provided that the
Lenders shall be deemed to have received the information specified in clauses
(i), (ii) and (iv) of this subsection (h) on the date (x) such information is
posted at the website of the Agent identified from time to time by the Agent to
the Lenders and the Borrower and (y) such posting is notified to the Lenders (it
being understood that the Borrower shall have satisfied the timing obligations
imposed by those clauses as of the earliest date such information is posted on
the Internet at www.sec.gov or the website referred to in clause (B)
above).

       

      SECTION
5.02.  Negative
Covenants.  So long as any Advance shall remain unpaid or any
Lender shall have any Commitment hereunder, the Borrower will not:

       

      (a)           Liens,
Etc.  Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien on or with respect to any of
its properties, whether now owned or hereafter acquired, or assign, or permit
any of its Subsidiaries to assign, any right to receive income, other
than:

       

      (i)           Permitted
Liens,

       

      (ii)           purchase
money Liens upon or in any real property or equipment acquired or held by the
Borrower or any Subsidiary in the ordinary course of business to secure the
purchase price of such property or equipment or to secure Debt incurred solely
for the purpose of financing the acquisition of such property or equipment, or
Liens existing on such property or equipment at the time of its acquisition
(other than any such Liens created in contemplation of such acquisition that
were not incurred to finance the acquisition of such property) or extensions,
renewals or replacements of any of the foregoing for the same or a lesser
amount, provided, however, that no such
Lien shall extend to or cover any properties of any character other than the
real property or equipment being acquired, and no such extension, renewal or
replacement shall extend to or cover any properties not theretofore subject to
the Lien being extended, renewed or replaced,

       

      (iii)           the
Liens existing on the Effective Date and described on Schedule 5.02(a)
hereto,

       

      (iv)           Liens
on property of a Person existing at the time such Person is merged into or
consolidated with the Borrower or any Subsidiary of the Borrower or becomes a
Subsidiary of the Borrower; provided that such
Liens were not created in contemplation of such merger, consolidation or
acquisition and do not extend to any assets other than those of the Person so
merged into or consolidated with the Borrower or such Subsidiary or acquired by
the Borrower or such Subsidiary,

       

      (v)           Liens
on accounts receivable (and in property securing or otherwise supporting such
accounts receivable together with proceeds thereof) of the Borrower and its
Subsidiaries in connection with a Receivables Securitization,

       

      (vi)           Liens
on assets of a Subsidiary that is a regulated telephone company (a “Telco”) that,
pursuant to the public debt indenture(s) of such Telco, are created upon the
merger or conveyance or sale of all or substantially all of the assets of such
Telco,

       

      (vii)           Liens
on real property securing Debt and other obligations in an aggregate principal
amount not to exceed $1,000,000,000 at any time outstanding,

       

      (viii)           other
Liens securing Debt and other obligations in an aggregate principal amount not
to exceed at any time outstanding five percent of Consolidated Net Tangible
Assets, and

       

      (ix)           the
replacement, extension or renewal of any Lien permitted by clause (iii) or
(iv) above upon or in the same property theretofore subject thereto or the
replacement, extension or renewal (without increase in the amount or change in
any direct or contingent obligor) of the Debt secured thereby.

       

      (b)           Mergers,
Etc.  Merge or consolidate with or into, or, directly or
indirectly, convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to, any Person.

       

      (c)           Accounting
Changes.  Make or permit, or permit any of its Subsidiaries to
make or permit, any change in accounting policies or reporting practices, except
as required or permitted by generally accepted accounting
principles.

       

      SECTION
5.03.  Financial
Covenant.  The Borrower will maintain, as of the last day of
each fiscal quarter, a ratio of Consolidated Debt for Borrowed Money to
Consolidated EBITDA of the Borrower and its Subsidiaries for the four quarters
then ended of not more than 3.0 to 1.

       

      ARTICLE
VI

       

      EVENTS OF
DEFAULT

       

      SECTION
6.01.  Events of
Default.  If any of the following events (“Events of Default”)
shall occur and be continuing:

       

      (a)           The
Borrower shall fail to pay any principal of any Advance when the same becomes
due and payable; or the Borrower shall fail to pay any interest on any Advance
or to make any other payment of fees or other amounts payable under this
Agreement or any Note within three Business Days after the same becomes due and
payable; or

       

      (b)           Any
representation or warranty made by the Borrower herein or by the Borrower (or
any of its officers) in connection with this Agreement shall prove to have been
incorrect in any material respect when made; or

       

      (c)           (i) The
Borrower shall fail to perform or observe any term, covenant or agreement
contained in Section 5.01(d), (e) or (h), 5.02 or 5.03, or (ii) the
Borrower shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement on its part to be performed or observed if such
failure shall remain unremedied for 10 days after written notice thereof shall
have been given to the Borrower by the Agent or any Lender; or

       

      (d)           The
Borrower or any of its Subsidiaries shall fail to pay any principal of or
premium or interest on any Debt that is outstanding under the Existing Credit
Agreement or in a principal or net amount of at least $250,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of the Borrower or such
Subsidiary (as the case may be), when the same becomes due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate the maturity of such Debt; or any such Debt shall
be declared to be due and payable, or required to be prepaid or redeemed (other
than by a regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be
required to be made, in each case prior to the stated maturity thereof;
or

       

      (e)           The
Borrower or any of its Subsidiaries shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a period of 30
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this subsection (e); or

       

      (f)           Final
and non-appealable judgments or orders for the payment of money in excess of
$250,000,000 in the aggregate shall be rendered against the Borrower or any of
its Subsidiaries thirty days shall have passed since such judgment became final
and non-appealable and enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; provided, however, that any
such judgment or order shall not be an Event of Default under this
Section 6.01(f) if and for so long as (i) the amount of such judgment
or order is covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (ii) such insurer,
which shall be rated at least “A” by A.M. Best Company, has been notified of,
and has not disputed the claim made for payment of, the amount of such judgment
or order; or

       

      (g)           (i) Any
Person or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or indirectly,
of Voting Stock of the Borrower (or other securities convertible into such
Voting Stock) representing more than 50% of the combined voting power of all
Voting Stock of the Borrower; or (ii) during any period of up to 24
consecutive months, commencing after the date of this Agreement, individuals who
at the beginning of such 24-month period were directors of the Borrower shall
cease for any reason (other than due to retirement, death or disability) to
constitute a majority of the board of directors of the Borrower (except to the
extent that individuals who at the beginning of such 24-month period were
replaced by individuals (x) elected by 66-2/3% of the remaining members of
the board of directors of the Borrower or (y) nominated for election by a
majority of the remaining members of the board of directors of the Borrower and
thereafter elected as directors by the shareholders of the Borrower);
or

       

      (h)           The
Borrower or any ERISA Affiliate shall fail to satisfy minimum funding
requirements under Section 412 of the Code or Section 302 of ERISA to any Plan,
or apply for a waiver of such requirements;

       

      then, and
in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (B) the
Advances, all such interest and all such amounts shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.

       

      ARTICLE
VII

       

      THE
AGENT

       

      SECTION
7.01.  Authorization and
Authority.  Each Lender hereby irrevocably appoints Citibank,
N.A. to act on its behalf as the Agent hereunder and authorizes the Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Agent by the terms hereof, together with such actions and powers as are
reasonably incidental thereto.  The provisions of this Article are
solely for the benefit of the Agent and the Lenders, and the Borrower shall have
no rights as a third party beneficiary of any of such provisions.

       

      SECTION
7.02.  Agent
Individually.  (a)  The Person serving as the Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the Agent and
the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or
unless the context otherwise requires, include the Person serving as the Agent
hereunder in its individual capacity.  Such Person and its Affiliates
may accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Agent hereunder and without any duty to account therefor to the
Lenders.

       

      (b)           Each
Lender understands that the Person serving as Agent, acting in its individual
capacity, and its Affiliates (collectively, the “Agent’s Group”) are
engaged in a wide range of financial services and businesses (including
investment management, financing, securities trading, corporate and investment
banking and research) (such services and businesses are collectively referred to
in this Section 7.02 as “Activities”) and may
engage in the Activities with or on behalf of the Borrower or their its
Affiliates.  Furthermore, the Agent’s Group may, in undertaking the
Activities, engage in trading in financial products or undertake other
investment businesses for its own account or on behalf of others (including the
Borrower and its Affiliates and including holding, for its own account or on
behalf of others, equity, debt and similar positions in the Borrower or its
Affiliates), including trading in or holding long, short or derivative positions
in securities, loans or other financial products of the Borrower or its
Affiliates.  Each Lender understands and agrees that in engaging in
the Activities, the Agent’s Group may receive or otherwise obtain information
concerning the Borrower or its Affiliates (including information concerning the
ability of the Borrower to perform its obligations hereunder) which information
may not be available to any of the Lenders that are not members of the Agent’s
Group.  None of the Agent nor any member of the Agent’s Group shall
have any duty to disclose to any Lender or use on behalf of the Lenders, and
shall not be liable for the failure to so disclose or use, any information
whatsoever about or derived from the Activities or otherwise (including any
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Borrower or any Affiliate
thereof) or to account for any revenue or profits obtained in connection with
the Activities, except that the Agent shall deliver or otherwise make available
to each Lender such documents as are expressly required by this Agreement to be
transmitted by the Agent to the Lenders.

       

      (c)           Each
Lender further understands that there may be situations where members of the
Agent’s Group or their respective customers (including the Borrower and its
Affiliates) either now have or may in the future have interests or take actions
that may conflict with the interests of any one or more of the Lenders
(including the interests of the Lenders hereunder).  Each Lender
agrees that no member of the Agent’s Group is or shall be required to restrict
its activities as a result of the Person serving as Agent being a member of the
Agent’s Group, and that each member of the Agent’s Group may undertake any
Activities without further consultation with or notification to any
Lender.  None of (i) this Agreement, (ii) the receipt by the Agent’s
Group of information (including Information) concerning the Borrower or its
Affiliates (including information concerning the ability of the Borrower to
perform its obligations hereunder) nor (iii) any other matter shall give rise to
any fiduciary, equitable or contractual duties (including without limitation any
duty of trust or confidence) owing by the Agent or any member of the Agent’s
Group to any Lender including any such duty that would prevent or restrict the
Agent’s Group from acting on behalf of customers (including the Borrower or its
Affiliates) or for its own account.

       

      SECTION
7.03.  Duties of Agent; Exculpatory
Provisions.  (a)  The Agent’s duties hereunder are
solely ministerial and administrative in nature and the Agent shall not have any
duties or obligations except those expressly set forth
herein.  Without limiting the generality of the foregoing, the Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, but shall be required to act or refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
written direction of the Required Lenders (or such other number or percentage of
the Lenders as shall be expressly provided for herein), provided that the
Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose the Agent or any of its Affiliates to
liability or that is contrary to this Agreement or applicable law.

       

      (b)           The
Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Sections 9.01 or 6.01) or (ii) in the absence of its own gross
negligence or willful misconduct.  The Agent shall be deemed not to
have knowledge of any Default or the event or events that give or may give rise
to any Default unless and until the Borrower or any Lender shall have given
notice to the Agent describing such Default and such event or
events.

       

      (c)           Neither
the Agent nor any member of the Agent’s Group shall be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty,
representation or other information made or supplied in or in connection with
this Agreement, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith or the adequacy, accuracy and/or completeness of the information
contained therein, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement or any other agreement,
instrument or document or the perfection or priority of any Lien or security
interest created or purported to be created hereby or (v) the satisfaction
of any condition set forth in Article III or elsewhere herein, other than
(but subject to the foregoing clause (ii)) to confirm receipt of items expressly
required to be delivered to the Agent.

       

      (d)           Nothing
in this Agreement shall require the Agent or any of its Related Parties to carry
out any “know your customer” or other checks in relation to any person on behalf
of any Lender and each Lender confirms to the Agent that it is solely
responsible for any such checks it is required to carry out and that it may not
rely on any statement in relation to such checks made by the Agent or any of its
Related Parties.

       

      SECTION
7.04.  Reliance by
Agent.  The Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Agent also may rely upon any statement made to it
orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In
determining compliance with any condition hereunder to the making of an Advance
that by its terms must be fulfilled to the satisfaction of a Lender, the Agent
may presume that such condition is satisfactory to such Lender unless an officer
of the Agent responsible for the transactions contemplated hereby shall have
received notice to the contrary from such Lender prior to the making of such
Advance, and such Lender shall not have made available to the Agent such
Lender’s ratable portion of the applicable Borrowing.  The Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

       

      SECTION
7.05.  Delegation of
Duties.  The Agent may perform any and all of its duties and
exercise its rights and powers hereunder by or through any one or more
sub-agents appointed by the Agent.  The Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties.  Each such sub-agent and the
Related Parties of the Agent and each such sub-agent shall be entitled to the
benefits of all provisions of this Article VIII and Section 9.04 (as though such
sub-agents were the “Agent” hereunder) as if set forth in full herein with
respect thereto.

       

      SECTION
7.06.  Resignation of
Agent.  The Agent may at any time give notice of its
resignation to the Lenders and the Borrower.  Upon receipt of any such
notice of resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor, which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank with an
office in New York, New York.  If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation
(such 30-day period, the “Lender Appointment
Period”), then the retiring Agent may on behalf of the Lenders, appoint a
successor Agent meeting the qualifications set forth above.  In
addition and without any obligation on the part of the retiring Agent to
appoint, on behalf of the Lenders, a successor Agent, the retiring Agent may at
any time upon or after the end of the Lender Appointment Period notify the
Borrower and the Lenders that no qualifying Person has accepted appointment as
successor Agent and the effective date of such retiring Agent’s resignation
which effective date shall be no earlier than three business days after the date
of such notice.  Upon the resignation effective date established in
such notice and regardless of whether a successor Agent has been appointed and
accepted such appointment, the retiring Agent’s resignation shall nonetheless
become effective and (i) the retiring Agent shall be discharged from its
duties and obligations as Agent hereunder and (ii) all payments,
communications and determinations provided to be made by, to or through the
Agent shall instead be made by or to each Lender directly, until such time as
the Required Lenders appoint a successor Agent as provided for above in this
paragraph.  Upon the acceptance of a successor’s appointment as Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties as Agent of the retiring (or retired)
Agent, and the retiring Agent shall be discharged from all of its duties and
obligations as Agent hereunder (if not already discharged therefrom as provided
above in this paragraph).  The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor.  After the
retiring Agent’s resignation hereunder, the provisions of this Article and
Section 8.04 shall continue in effect for the benefit of such retiring
Agent, its sub-agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while the retiring Agent was
acting as Agent.

       

      SECTION
7.07.  Non-Reliance on Agent and
Other Lenders.  (a)  Each Lender confirms to the
Agent, each other Lender and each of their respective Related Parties that it
(i) possesses (individually or through its Related Parties) such knowledge and
experience in financial and business matters that it is capable, without
reliance on the Agent, any other Lender or any of their respective Related
Parties, of evaluating the merits and risks (including tax, legal, regulatory,
credit, accounting and other financial matters) of (x) entering into this
Agreement, (y) making Advances and other extensions of credit hereunder and (z)
in taking or not taking actions hereunder and thereunder, (ii) is financially
able to bear such risks and (iii) has determined that entering into this
Agreement and making Advances and other extensions of credit hereunder is
suitable and appropriate for it.

       

      (b)           Each
Lender acknowledges that (i) it is solely responsible for making its own
independent appraisal and investigation of all risks arising under or in
connection with this Agreement, (ii) that it has, independently and without
reliance upon the Agent, any other Lender or any of their respective Related
Parties, made its own appraisal and investigation of all risks associated with,
and its own credit analysis and decision to enter into, this Agreement based on
such documents and information, as it has deemed appropriate and (iii) it will,
independently and without reliance upon the Agent, any other Lender or any of
their respective Related Parties, continue to be solely responsible for making
its own appraisal and investigation of all risks arising under or in connection
with, and its own credit analysis and decision to take or not take action under,
this Agreement based on such documents and information as it shall from time to
time deem appropriate, which may include, in each case:

       

      (i)           the
financial condition, status and capitalization of the Borrower;

      

      (ii)           the
legality, validity, effectiveness, adequacy or enforceability of this Agreement
and any other agreement, arrangement or document entered into, made or executed
in anticipation of, under or in connection with this Agreement;

      

      (iii)           determining
compliance or non-compliance with any condition hereunder to the making of an
Advance and the form and substance of all evidence delivered in connection with
establishing the satisfaction of each such condition;

      

      (iv)           the
adequacy, accuracy and/or completeness of any information delivered by the
Agent, any other Lender or by any of their respective Related Parties under or
in connection with this Agreement, the transactions contemplated hereby and
thereby or any other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with this
Agreement.

      

      SECTION
7.08.  No
Other Duties, etc.  Anything herein to the contrary
notwithstanding, none of the Persons acting as Bookrunners, Arrangers,
Syndication Agent or Co-Documentation Agents listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement, except
in its capacity, as applicable, as the Agent or as a Lender
hereunder.

       

      ARTICLE
VIII

       

      MISCELLANEOUS

       

      SECTION
8.01.  Amendments,
Etc.  No amendment or waiver of any provision of this Agreement
or the Notes, nor consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Required Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders, do any of the following:  (a) waive any of the
conditions specified in Section 3.01, (b) increase or extend the
Commitments of the Lenders, (c) reduce the principal of, or interest on,
the Advances or any fees or other amounts payable hereunder, (d) postpone
any date fixed for any payment of principal of, or interest on, the Advances or
any fees or other amounts payable hereunder, (e) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Advances, or
the number of Lenders, that shall be required for the Lenders or any of them to
take any action hereunder or (f) amend this Section 8.01; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Agent under this Agreement or any Note.

       

      SECTION
8.02.  Notices,
Etc.  (a)  All notices and other communications
provided for hereunder shall be either (x) in writing (including telecopier
communication) and mailed, telecopied or delivered or (y) as and to the extent
set forth in Section 8.02(b), if to the Borrower, at its address at 175 East
Houston Street, San Antonio, Texas  78205,
Attention:  Assistant Treasurer; if to any Initial Lender, at its
Domestic Lending Office specified opposite its name on Schedule I hereto;
if to any other Lender, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender; and if to the
Agent, at its address at Two Penns Way, New Castle, Delaware 19720, Attention:
Bank Loan Syndications Department; or, as to the Borrower or the Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Agent.  All such notices and communications shall be effective when
received.  Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.

       

      (b)           So
long as Citibank or any of its Affiliates is the Agent, such materials as the
Borrower and the Agent shall agree shall be delivered to the Agent in an
electronic medium in a format acceptable to the Agent and the Lenders by e-mail
at oploanswebadmin@citigroup.com.  With the Borrower’s prior consent,
the Agent may make such materials, as well as any other written information,
documents, instruments and other material relating to the Borrower, any of its
Subsidiaries or any other materials, notices, requests or matters relating to
this Agreement, the Notes or any of the transactions contemplated hereby
(collectively, the “Communications”)
available to the Lenders by posting such notices on Intralinks or a
substantially similar electronic system (the “Platform”); provided, however, that the
Borrower’s prior consent is not required in the event such information is
publicly available.  The Borrower acknowledges that (i) the
distribution of material through an electronic medium is not necessarily secure
and that there are confidentiality and other risks associated with such
distribution, (ii) the Platform and the Communications are provided “as is” and
“as available” and (iii) neither the Agent nor any of its Affiliates warrants
the accuracy, adequacy or completeness of the Communications or the Platform and
each expressly disclaims liability for errors or omissions in the Communications
or the Platform.  No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by the Agent or any of its
Affiliates in connection with the Platform.

       

      (c)           Each
Lender agrees that notice to it (as provided in the next sentence) (a “Notice”) specifying
that any Communications have been posted to the Platform shall constitute
effective delivery of such information, documents or other materials to such
Lender for purposes of this Agreement; provided that if
requested by any Lender the Agent shall deliver a copy of the Communications to
such Lender by email or telecopier.  Each Lender agrees (i) to notify
the Agent in writing of such Lender’s e-mail address to which a Notice may be
sent by electronic transmission (including by electronic communication) on or
before the date such Lender becomes a party to this Agreement (and from time to
time thereafter to ensure that the Agent has on record an effective e-mail
address for such Lender) and (ii) that any Notice may be sent to such e-mail
address.

       

      SECTION
8.03.  No
Waiver; Remedies.  No failure on the part of any Lender or the
Agent to exercise, and no delay in exercising, any right hereunder or under any
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right.  The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.

       

      SECTION
8.04.  Costs
and Expenses.  (a)  The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication
(including printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the
reasonable fees and expenses of Shearman & Sterling LLP,  counsel
for the Agent, with respect thereto and with respect to advising the Agent as to
its rights and responsibilities under this Agreement.  The Borrower
further agrees to pay on demand all costs and expenses of the Agent and the
Lenders, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Notes and the other
documents to be delivered hereunder, including, without limitation, reasonable
fees and expenses of counsel for the Agent and each Lender in connection with
the enforcement of rights under this Section 8.04(a).

       

      (b)           The
Borrower agrees to indemnify and hold harmless the Agent and each Lender and
each of their Affiliates and their officers, directors, employees, agents and
advisors (each, an “Indemnified Party”)
from and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) the Notes, this Agreement, any
of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct.  In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 8.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors,
equityholders or creditors or an Indemnified Party or any other Person, whether
or not any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated.  The Borrower also
agrees not to assert any claim for special, indirect, consequential or punitive
damages against the Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys and agents, on any theory
of liability, arising out of or otherwise relating to the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances.

       

      (c)           If
any payment of principal of, or Conversion of, any Eurodollar Rate Advance is
made by the Borrower to or for the account of a Lender other than on the last
day of the Interest Period for such Advance, as a result of a payment or
Conversion pursuant to Section 2.07(d) or (e), 2.09 or 2.11, acceleration
of the maturity of the Notes pursuant to Section 6.01 or for any other
reason, or by an Eligible Assignee to a Lender other than on the last day of the
Interest Period for such Advance upon an assignment of rights and obligations
under this Agreement pursuant to Section 8.06 as a result of a demand by the
Borrower pursuant to Section 8.06(a), the Borrower shall, upon demand by such
Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment or Conversion, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain such Advance.

       

      (d)           Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in Sections 2.10, 2.13
and 8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the Notes.

       

      (e)           Each
Lender severally agrees to indemnify the Agent (to the extent not promptly
reimbursed by the Borrower) from and against such Lender’s ratable share of any
and all losses, claims, damages, liabilities, obligations, penalties, actions,
judgments, suits, costs, disbursements and expenses, joint or several, of any
kind or nature (including the fees, charges and disbursements of any advisor or
counsel for such Person that may be imposed on, incurred by, or asserted against
the Agent in any way relating to or arising out of this Agreement or any action
taken or omitted by the Agent hereunder; provided, however, that no
Lender shall be liable for any portion of such losses, claims, damages,
liabilities, obligations, penalties, actions, judgments, suits, costs,
disbursements or expenses resulting from the Agent’s gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction.  Without limitation of the foregoing, each Lender agrees
to reimburse the Agent for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the
Borrower under Section 8.04(a), to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower.

       

      SECTION
8.05.  Binding
Effect.  This Agreement shall become effective (other than
Section 2.01, which shall only become effective upon satisfaction of the
conditions precedent set forth in Section 3.01) when it shall have been
executed by the Borrower and the Agent and when the Agent shall have been
notified by each Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent and each Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.

       

      SECTION
8.06.  Assignments and
Participations.  (a)  Each Lender may and, if
demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.10 or 2.13) upon at least five Business Days’ notice to such
Lender and the Agent, will assign to one or more Persons all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment, the Advances owing to it and the Note or Notes
held by it); provided, however, that
(i) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement, (ii) except
in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender’s rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof unless the Borrower and the Agent otherwise agree,
(iii) each such assignment shall be to an Eligible Assignee, (iv) each such
assignment made as a result of a demand by the Borrower pursuant to this
Section 8.06(a) shall be arranged by the Borrower after consultation with
the Agent and shall be either an assignment of all of the rights and obligations
of the assigning Lender under this Agreement or an assignment of a portion of
such rights and obligations made concurrently with another such assignment or
other such assignments that together cover all of the rights and obligations of
the assigning Lender under this Agreement, (v) no Lender shall be obligated
to make any such assignment as a result of a demand by the Borrower pursuant to
this Section 8.06(a) unless and until such Lender shall have received one
or more payments from either the Borrower or one or more Eligible Assignees in
an aggregate amount at least equal to the aggregate outstanding principal amount
of the Advances owing to such Lender, together with accrued interest thereon to
the date of payment of such principal amount and all other amounts payable to
such Lender under this Agreement, and (vi) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
subject to such assignment and a processing and recordation fee of $3,500
payable by the parties to each such assignment (not including the Borrower),
provided, however, that in the
case of each assignment made as a result of a demand by the Borrower, such
recordation fee shall be payable by the Borrower except that no such recordation
fee shall be payable in the case of an assignment made at the request of the
Borrower to an Eligible Assignee that is an existing Lender, and (vii) any
Lender may, without the approval of the Borrower and the Agent, assign all or a
portion of its rights to any of its Affiliates.  Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (other than
its rights under Section 2.10, 2.13 and 8.04 to the extent any claim thereunder
relates to an event arising prior such assignment) and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).

       

      (b)           By
executing and delivering an Assignment and Acceptance, the Lender assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows:  (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy
of this Agreement, together with copies of the financial statements referred to
in Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement as are delegated to the Agent by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Agreement are required to
be performed by it as a Lender.

       

      (c)           Upon
its receipt of an Assignment and Acceptance executed by an assigning Lender and
an assignee representing that it is an Eligible Assignee, together with any Note
or Notes subject to such assignment, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower.

       

      (d)           The
Agent shall maintain at its address referred to in Section 8.02 a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Advances owing to, each Lender from time to time
(the “Register”).  The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement.  The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

       

      (e)           Each
Lender may sell participations to one or more banks or other entities (other
than the Borrower or any of its Affiliates) in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment, the Advances owing to it and any Note or Notes
held by it); provided, however, that
(i) such Lender’s obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note for all purposes of this Agreement,
(iv) the Borrower, the Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any Note, or any consent to any departure by the
Borrower therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation.

       

      (f)           Any
Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section 8.06, disclose to the
assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior
to any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any Information
relating to the Borrower received by it from such Lender.

       

      (g)           Notwithstanding
any other provision set forth in this Agreement, any Lender may at any time
create a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including, without limitation,
any pledge or assignment to secure obligations to a Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System, and this Section shall not apply to any such pledge or assignment of a
security interest; provided that, no
such pledge or assignment of a security interest shall release a Lender from any
of its obligations hereunder or substitute any such pledgee or assignee for such
Lender party hereto.

       

      SECTION
8.07.  Confidentiality; Patriot
Act.  Each of the Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’
respective managers, administrators, trustees, partners, directors, officers,
employees, agents, advisors and other representatives (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it or its Affiliates (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies hereunder
or under any Note or any action or proceeding relating to this Agreement or any
Note or the enforcement of rights hereunder or thereunder, (f) subject to
an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective party (or its managers,
administrators, trustees, partners, directors, officers, employees, agents,
advisors and other representatives) to any swap, derivative or other transaction
under which payments are to be made by reference to the Borrower and its
obligations, this Agreement or payments hereunder, (iii) any rating agency, or
(iv) the CUSIP Service Bureau or any similar organization, (g) with the
consent of the Borrower or (h) to the extent such Information
(x) becomes publicly available other than as a result of a breach of this
Section or (y) becomes available to the Agent, any Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Borrower.

       

      For
purposes of this Section, “Information” means
all information received from the Borrower or any of its Subsidiaries relating
to the Borrower or any of its Subsidiaries or any of their respective
businesses, other than any such information that is available to the Agent or
any Lender on a nonconfidential basis prior to disclosure by the Borrower or any
of its Subsidiaries, provided that, in the
case of information received from the Borrower or any of its Subsidiaries after
the date hereof, such information is clearly identified at the time of delivery
as confidential.  Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

       

      Each of
the Lenders hereby notifies the Borrower that, pursuant to the requirements of
the Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow it to identify the Borrower in
accordance with the Patriot Act.

       

      SECTION
8.08.  Governing
Law.  This Agreement and the Notes shall be governed by, and
construed in accordance with, the laws of the State of
New York.

       

      SECTION
8.09.  Execution in
Counterparts.  This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.  Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this
Agreement.

       

      SECTION
8.10.  Jurisdiction,
Etc.  (a)  Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or the Notes, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted
by law, in such federal court.  The Borrower hereby agrees that
service of process in any such action or proceeding brought in the any such New
York State court or in such federal court may be made upon the Corporate
Secretary of the Borrower at 175 East Houston Street, San Antonio, Texas 78205
(the “Process
Agent”) and the Borrower hereby irrevocably appoints the Process Agent
its authorized agent to accept such service of process.  The Borrower
hereby further irrevocably consents to the service of process in any action or
proceeding in such courts by the mailing thereof by any parties hereto by
registered or certified mail, postage prepaid, to the Borrower at its address
specified pursuant to Section 8.02.  Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Notes in the courts of any
jurisdiction.

       

      (b)           Each
of the parties hereto irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the Notes in any New York State or
federal court.  Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.

       

      
        
          
            NYDOCS03/858824.4

          

           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
8.11.  Waiver of Jury
Trial.  Each of the Borrower, the Agent and the Lenders hereby
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement or the Notes or the actions of the Agent or any
Lender in the negotiation, administration, performance or enforcement
thereof.

       

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

       

      AT&T
INC.

      

      By /s/ Jonathan P.
Klug

      Title:   Senior
Vice President and Treasurer

      

      CITIBANK,
N.A.,

      as
Agent

      

      By /s/ Kevin
Ege

      Title:   Vice
President

      

      

      Initial
Lenders

      

      
        	
                 
      

              	
                CITIBANK,
      N.A.

              

      

      

      
        	
                 
      

              	
                By
      /s/ Kevin
      Ege

              

      

      
        	
                 
      

              	
                Title:   Vice
      President

              

      

      

      
        	
                 
      

              	
                JPMORGAN
      CHASE BANK, N.A.

              

      

      

      
        	
                 
      

              	
                By
      /s/ John
      Kowalczuk

              

      

      
        	
                 
      

              	
                Title:   Executive
      Director

              

      

      

      
        	
                 
      

              	
                BANK
      OF AMERICA, N.A.

              

      

      

      
        	
                 
      

              	
                By
      /s/ Lisa
      Webster

              

      

      
        	
                 
      

              	
                Title:   Vice
      President

              

      

      

      
        	
                 
      

              	
                BARCLAYS
      BANK PLC

              

      

      

      
        	
                 
      

              	
                By
      /s/ Nicholas A.
      Bell

              

      

      
        	
                 
      

              	
                Title:   Director

              

      

      

      
        	
                 
      

              	
                DEUTSCHE
      BANK AG NEW YORK BRANCH

              

      

      

      
        	
                 
      

              	
                By
      /s/ Andreas
      Neumeier

              

      

      
        	
                 
      

              	
                Title:   Managing
      Director

              

      

      

      By /s/ Yvonne
Tilden

      
        	
                 
      

              	
                Title:   Director

              

      

      

      
        
          
            NYDOCS03/858824.4
                                                                  

          

           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                THE
      ROYAL BANK OF SCOTLAND PLC

              

      

      

      
        	
                 
      

              	
                By
      /s/ Andrew
      Ragusa

              

      

      
        	
                 
      

              	
                Title:   Senior
      Vice President

              

      

      

      
        	
                 
      

              	
                UBS
      LOAN FINANCE LLC

              

      

      

      
        	
                 
      

              	
                By
      /s/ Richard L.
      Tavrow

              

      

      
        	
                 
      

              	
                Title:   Director

              

      

      

      
        	
                 
      

              	
                By
      /s/ Irja R.
      Otsa

              

      

      
        	
                 
      

              	
                Title:   Associate
      Director

              

      

      

      

      
        
          
            NYDOCS03/858824.4
                                                                  

          

           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
I

      AT&T
INC.

      CREDIT
AGREEMENT

      APPLICABLE
LENDING OFFICES

       

      
        	
                Name of Initial Lender

              	
                Commitments

              	
                Domestic Lending Office

              	
                Eurodollar Lending
Office

              
	
                Bank
      of America, N.A.

              	
                $428,571,428.57

              	
                901
      Main Street

                14th
      Floor

                Dallas,
      TX  75202

                Attn:  Nita
      Gerstung

                T:  214-209-9126

                F:  214-290-9478

              	
                901
      Main Street

                14th
      Floor

                Dallas,
      TX  75202

                Attn:  Nita
      Gerstung

                T:  214-209-9126

                F:  214-290-9478

              
	
                Barclays
      Bank PLC

              	
                $428,571,428.57

              	
                200
      Park Avenue

                4th
      Floor

                New
      York, NY  10166

                Attn:  Catherine
      Redfern

                T:  973
      576-3220

                F:  973
      576-3014

              	
                200
      Park Avenue

                4th
      Floor

                New
      York, NY  10166

                Attn:  Catherine
      Redfern

                T:  973
      576-3220

                F:  973
      576-3014

              
	
                Citibank,
      N.A.

              	
                $428,571,428.58

              	
                Two
      Penns Way

                New
      Castle, DE  19720

                Attn:  Paul
      Joseph

                T:  212
      994-0961

                F:  302
      894-6016

              	
                Two
      Penns Way

                New
      Castle, DE  19720

                Attn:  Paul
      Joseph

                T:  212
      994-0961

                F:  302
      894-6016

              
	
                Deutsche
      Bank AG New York Branch

              	
                $428,571,428.57

              	
                60
      Wall Street

                MS:
      NYC60-4310

                New
      York, NY 10005

                Attn:  Yvonne
      Tilden

                T:  212
      250-5931

                F:  213
      797-4347

              	
                60
      Wall Street

                MS:
      NYC60-4310

                New
      York, NY 10005

                Attn:  Yvonne
      Tilden

                T:  212
      250-5931

                F:  213
      797-4347

              
	
                JPMorgan
      Chase Bank, N.A.

              	
                $428,571,428.57

              	
                1111
      Fannin street

                10th
      Floor

                Houston,
      Texas 77002

                Attn:
      Leslie Opeyemi

                T:
      713-750-2318

                F:
      713-750-2228

              	
                1111
      Fannin street

                10th
      Floor

                Houston,
      Texas 77002

                Attn:
      Leslie Opeyemi

                T:
      713-750-2318

                F:
      713-750-2228

              
	
                The
      Royal Bank of Scotland plc

              	
                $428,571,428.57

              	
                101
      Park Avenue

                6th
      Floor

                New
      York, NY  10178

                Attn:  Punam
      Gambhir

                T:  212
      401-3278

                F:  212
      401-3456

              	
                101
      Park Avenue

                6th
      Floor

                New
      York, NY  10178

                Attn:  Punam
      Gambhir

                T:  212
      401-3278

                F:  212
      401-3456

              
	
                UBS
      Loan Finance LLC

              	
                $428,571,428.57

              	
                677
      Washington Blvd.

                Stamford,
      CT  06501

                Attn:  Christopher
      Aitkin

                T:  203
      719-3845

                F:  203
      719-3888

              	
                677
      Washington Blvd.

                Stamford,
      CT  06501

                Attn:  Christopher
      Aitkin

                T:  203
      719-3845

                F:  203
      719-3888

              

      

      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
5.02(a)

      EXISTING
LIENS

       

      None.

       

      

       

      
        	
                1)  

              	 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT A
- FORM OF

      NON-NEGOTIABLE
PROMISSORY NOTE

       

      U.S.$_______________                                                                                                Dated:  _______________,
200_

       

      FOR VALUE
RECEIVED, the undersigned, AT&T INC., a Delaware corporation (the “Borrower”), HEREBY
PROMISES TO PAY to the order of _________________________ (the “Lender”) for the
account of its Applicable Lending Office on the Termination Date (as defined in
the Credit Agreement referred to below) the principal sum of U.S.$[amount of the
Lender’s Commitment in figures] or, if less, the aggregate principal amount of
the Advances made by the Lender to the Borrower pursuant to the Credit Agreement
dated as of April 11, 2008 among the Borrower, the Lender and certain other
lenders parties thereto, Citigroup Global Markets Inc. and JPMorgan Securities
Inc. as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A.,
as syndication agent, Bank of America, N.A., Barclays Bank PLC, Deutsche Bank AG
New York Branch, The Royal Bank of Scotland plc and UBS Loan Finance LLC, as
co-documentation agents, and Citibank, N.A., as Agent for the Lender and such
other lenders (as amended or modified from time to time, the “Credit Agreement”;
the terms defined therein being used herein as therein defined) outstanding on
such date.

       

      The
Borrower promises to pay interest on the unpaid principal amount of each Advance
from the date of such Advance until such principal amount is paid in full, at
such interest rates, and payable at such times, as are specified in the Credit
Agreement.

       

      Both
principal and interest are payable in lawful money of the United States of
America to Citibank, as Agent, at 388 Greenwich Street, New York, New York
10013, in same day funds.  Each Advance owing to the Lender by the
Borrower pursuant to the Credit Agreement, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Promissory
Note.

       

      This
Promissory Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement.  The Credit Agreement, among other
things, (i) provides for the making of Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Advance being evidenced by this Promissory
Note and (ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
therein specified.

       

      AT&T
INC.

       

      By
__________________________

      Title:

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ADVANCES
AND PAYMENTS OF PRINCIPAL

      

      

      
        	
                 

                Date

              	
                 

                Amount
      of

                Advance

              	
                Amount
      of

                Principal
      Paid

                or
      Prepaid

              	
                 

                Unpaid
      Principal

                Balance

              	
                 

                Notation

                Made
      By

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT B
- FORM OF NOTICE OF

       BORROWING

      Citibank,
N.A., as Agent

        for
the Lenders parties

        to
the Credit Agreement

        referred
to below

        Two
Penns Way

        New
Castle, Delaware 19720

      [Date]

       

      Attention:
Bank Loan Syndications Department

       

      Ladies
and Gentlemen:

       

      The
undersigned, AT&T Inc., refers to the Credit Agreement, dated as of April
11, 2008 (as amended or modified from time to time, the “Credit Agreement”,
the terms defined therein being used herein as therein defined), among the
undersigned, certain Lenders parties thereto, Citigroup Global Markets Inc. and
JPMorgan Securities Inc, as joint lead arrangers and joint bookrunners, JPMorgan
Chase Bank, N.A., as syndication agent, Bank of America, N.A., Barclays Bank
PLC, Deutsche Bank AG New York Branch, The Royal Bank of Scotland plc and UBS
Loan Finance LLC, as co-documentation agents, and Citibank, N.A., as Agent for
said Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the “Proposed Borrowing”)
as required by Section 2.02(a) of the Credit Agreement:

       

      (i)           The
Business Day of the Proposed Borrowing is _______________, 200_.

       

      (ii)           The
Type of Advances comprising the Proposed Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].

       

      (iii)           The
aggregate amount of the Proposed Borrowing is $_______________.

       

      (iv)           The
proceeds of the Proposed Borrowing shall be funded to account maintained by the
Borrower at __________ at its office at __________, Account
No. __________.

       

      [(v)           The
initial Interest Period for each Eurodollar Rate Advance made as part of the
Proposed Borrowing is _____ month[s].]

       

      The
undersigned hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the Proposed Borrowing:

       

      (A)           the
representations and warranties contained in Section 4.01 of the Credit
Agreement (except the representations set forth in the last sentence of
subsection (e) thereof and in subsection (f)(i) thereof) are correct,
before and after giving effect to the Proposed Borrowing and to the application
of the proceeds therefrom, as though made on and as of such date;
and

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (B)           no
event has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom, that constitutes a
Default, and

       

      (C)           the
Proposed Borrowing is within any applicable debt limitations established by the Board of
Directors of the Borrower.

       

      .

       

      Very
truly yours,

       

      AT&T
INC.

       

      By
__________________________

      Title:

      
        
          
            NYDOCS03/858824.4
                                                                  

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT C
- FORM OF

      ASSIGNMENT
AND ACCEPTANCE

       

      Reference
is made to the Credit Agreement dated as of April 11, 2008 (as amended or
modified from time to time, the “Credit Agreement”)
among AT&T Inc., a Delaware corporation (the “Borrower”), the
Lenders (as defined in the Credit Agreement), Citigroup Global Markets Inc. and
JPMorgan Securities Inc, as joint lead arrangers and joint bookrunners, JPMorgan
Chase Bank, N.A., as syndication agent, Bank of America, N.A., Barclays Bank
PLC, Deutsche Bank AG New York Branch, The Royal Bank of Scotland plc and UBS
Loan Finance LLC, as co-documentation agents, and Citibank, N.A., as agent for
the Lenders (the “Agent”).  Terms
defined in the Credit Agreement are used herein with the same
meaning.

       

      The
“Assignor” and the “Assignee” referred to on Schedule I hereto agree as
follows:

       

      1.           The
Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, an interest in and to the Assignor’s
rights and obligations under the Credit Agreement as of the date hereof equal to
the percentage interest specified on Schedule 1 hereto of all outstanding rights
and obligations under the Credit Agreement.  After giving effect to
such sale and assignment, the Assignee’s Commitment and the amount of the
Advances owing to the Assignee will be as set forth on Schedule 1
hereto.

       

      2.           The
Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Note[, if any] held by the Assignor [and requests
that the Agent exchange such Note for a new Note payable to the order of [the
Assignee in an amount equal to the Commitment assumed by the Assignee pursuant
hereto or new Notes payable to the order of the Assignee in an amount equal to
the Commitment assumed by the Assignee pursuant hereto and] the Assignor in an
amount equal to the Commitment retained by the Assignor under the Credit
Agreement, [respectively,] as specified on Schedule 1 hereto.

       

      3.           The
Assignee (i) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee;
(iv) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Credit Agreement as
are delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender; and
(vi) attaches any U.S. Internal Revenue Service forms required under
Section 2.13 of the Credit Agreement.

       

      4.           Following
the execution of this Assignment and Acceptance, it will be delivered to the
Agent for acceptance and recording by the Agent.  The effective date
for this Assignment and Acceptance (the “Effective Date”)
shall be the date of acceptance hereof by the Agent, unless otherwise specified
on Schedule 1 hereto.

       

      5.           Upon
such acceptance and recording by the Agent, as of the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.

       

      6.           Upon
such acceptance and recording by the Agent, from and after the Effective Date,
the Agent shall make all payments under the Credit Agreement and the Notes in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect thereto) to the
Assignee.  The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.

       

      7.           This
Assignment and Acceptance shall be governed by, and construed in accordance
with, the laws of the State of New York.

       

      8.           This
Assignment and Acceptance may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.  Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.

       

      IN
WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Schedule
1

      to

      Assignment
and Acceptance

       

      Percentage
interest
assigned:                                                                                                           _____%

       

      Assignee’s
Commitment:                                                                                                                     $______

       

      Aggregate
outstanding principal amount of Advances assigned:$______

       

      Principal
amount of Note payable to
Assignee:                                                                                                                                $______

       

      Principal
amount of Note payable to
Assignor:                                                                                                                                $______

       

      Effective
Date*:                                           _______________,
200_

       

      [NAME OF
ASSIGNOR], as Assignor

       

      By
__________________________

      Title:

       

      Dated:  _______________,
200_

       

      [NAME OF
ASSIGNEE], as Assignee

       

      By
__________________________

      Title:

       

      Dated:  _______________,
200_

       

      Domestic
Lending Office:

      [Address]

       

      Eurodollar
Lending Office:

      [Address]

       

      

        

      

       

        
          	
                  *

                	
                  This date should be no earlier
      than five Business Days after the delivery of this Assignment and
      Acceptance to the Agent.

                

        

         

      

      
        
          
            NYDOCS03/858824.4
                                                                  

          

           

        

        
           

          
            

          

        

        
           

        

      

      Accepted
[and Approved]**
this

      __________
day of _______________, 200_

       

      CITIBANK,
N.A., as Agent

       

      By                                                      

         Title:

       

      [Approved
this __________ day

      of
_______________, 200_

       

      AT&T
INC.

       

      By                                                      ]*

         Title:

      

        

      

       

        
          	
                  **

                	
                  Required
      if the Assignee is an Eligible Assignee solely by reason of
      clause (iii) of the definition of “Eligible
  Assignee”.

                

        

         

      

       

        
          	
                  *

                	
                  Required
      if the Assignee is an Eligible Assignee solely by reason of
      clause (iii) of the definition of “Eligible
  Assignee”.

                

        

         

      

      
        
          
            NYDOCS03/858824.4
                                                                  

          

           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT D
- FORM OF

      OPINION
OF COUNSEL

      FOR THE
BORROWER

       

      April 11,
2008

       

      To each
of the Lenders parties

       to
the Credit Agreement dated

       as
of April 11, 2008

       among
AT&T Inc.,

       said
Lenders and Citibank, N.A.,

       as
Agent for said Lenders, and

       to
Citibank, N.A., as Agent

       

      Ladies
and Gentlemen:

       

      Pursuant
to Section 3.01(h)(iv) of the Credit Agreement, dated as of April 11, 2008
(the “Credit
Agreement”), among AT&T Inc. (the “Borrower”), the
Lenders parties thereto and Citibank, N.A., as Agent for said Lenders, I am of
the opinion that:

       

      1.           The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.

       

      2.           The
Credit Agreement has been duly authorized, executed and delivered, and
constitutes a legal, valid and binding instrument enforceable against the
Borrower in accordance with its terms (subject, as to enforcement of remedies,
to applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general applicability relating to or
affecting creditors’ rights generally from time to time in effect and to general
principles of equity).

       

      3.           Neither
the execution and delivery of the Credit Agreement or the issuance of the Notes,
nor the consummation of any other of the transactions therein contemplated, nor
the fulfillment of the terms thereof will conflict with, result in a breach of,
or constitute a default under, the charter or bylaws of the Borrower or the
terms of any indenture or other agreement or instrument known to me and to which
the Borrower is a party or by which the Borrower is bound, or any applicable
law, order or regulation known to me to be applicable to the Borrower of any
court, regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Borrower.

       

      4.           No
order, consent, authorization, approval, registration or qualification of or
with any governmental agency or body having jurisdiction over the Borrower is
required for the due execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes.

       

      5. The form
and terms of the Notes have been duly authorized and established by all
necessary corporate action, and, when executed and delivered, will constitute
valid and legally binding obligations of the Borrower (subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws of general
applicability relating to or affecting creditors’ rights generally from time to
time in effect and to general principles of equity).

       

      6. To the
best of my knowledge, there is no pending or overtly threatened action, suit or
proceedings against the Borrower or any of its Subsidiaries, as such term is
defined in the Credit Agreement, before any court, governmental agency or
arbitrator that purport to affect the legality, validity, binding effect or
enforceability of the Credit Agreement or any of the Notes or the consummation
of the transactions contemplated thereby or, if likely to have a materially
adverse effect upon the financial condition or operations of the Borrower, that
is not disclosed in a filing by the Borrower with the Securities and Exchange
Commission.

       

      In giving
the foregoing opinion, I have assumed that at the time of any Borrowing and the
execution of the Notes that any such Borrowing was in accordance with any
applicable debt limitations established by the Board of Directors of the
Borrower.  In addition, I have relied, as to certain matters of fact,
upon certificates of responsible officers of the Borrower and public
officials.

       

      Very
truly yours,

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXECUTION
COPY

       

      U.S.
$3,000,000,000

       

      CREDIT
AGREEMENT

       

      Dated as
of April 11, 2008

       

      Among

       

      AT&T
INC.

      as Borrower

       

      and

       

      THE
INITIAL LENDERS NAMED HEREIN

      as Initial Lenders

       

      and

       

      CITIBANK,
N.A.

      as Administrative Agent

       

      and

       

      CITIGROUP
GLOBAL MARKETS INC.

      and

      JPMORGAN
SECURITIES INC.

      as Joint Lead Arrangers and Joint Bookrunners

       

      and

       

      JPMORGAN
CHASE BANK, N.A.

      as Syndication
Agent

       

      and

       

      BANK
OF AMERICA, N.A.

      BARCLAYS
BANK PLC

      DEUTSCHE
BANK AG NEW YORK
BRANCH

      THE
ROYAL BANK OF SCOTLAND PLC

      and

      UBS
LOAN FINANCE LLC

       

      as Co-Documentation
Agents

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      TABLE
OF CONTENTS

      
        	
                 
      

              	
                ARTICLE
      I

              

      

       

      
        	
                 
      

              	
                SECTION
      1.01.  Certain Defined
      Terms[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      1.02.  Computation of Time
      Periods[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      1.03.  Accounting
      Terms[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                ARTICLE
      II

              

      

       

      
        	
                 
      

              	
                SECTION
      2.01.  The Advances[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.02.  Making the
      Advances[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.03.  Fees[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.04.  Termination or
      Reduction of the Commitments[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.05.  Repayment of
      Advances[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.06.  Interest on
      Advances[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.07.  Interest Rate
      Determination[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.08.  Optional Conversion of
      Advances[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.09.  Optional Prepayments
      of Advances[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.10.  Increased
      Costs[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.11.  Illegality[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.12.  Payments and
      Computations[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.13.  Taxes[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.14.  Sharing of Payments,
      Etc.[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.15.  Evidence of
      Debt[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      2.16.  Use of
      Proceeds[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                ARTICLE
      III

              

      

       

      
        	
                 
      

              	
                SECTION
      3.01.  Conditions Precedent
      to Effectiveness of Section 2.01[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      3.02.  Conditions Precedent
      to Each Borrowing.[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      3.03.  Determinations Under
      Section 3.01[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                ARTICLE
      IV

              

      

       

      
        	
                 
      

              	
                SECTION
      4.01.  Representations and
      Warranties of the Borrower[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                ARTICLE
      V

              

      

       

      
        	
                 
      

              	
                SECTION
      5.01.  Affirmative
      Covenants[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      5.02.  Negative
      Covenants[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      5.03.  Financial
      Covenant[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                ARTICLE
      VI

              

      

       

      
        	
                 
      

              	
                SECTION
      6.01.  Events of
      Default[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                ARTICLE
      VII

              

      

       

      
        	
                 
      

              	
                SECTION
      7.01.  Authorization and
      Authority[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      7.02.  Agent
      Individually[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      7.03.  Duties of Agent;
      Exculpatory Provisions[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      7.04.  Reliance by
      Agent[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      7.05.  Delegation of
      Duties[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      7.06.  Resignation of
      Agent[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      7.07.  Non-Reliance on Agent
      and Other Lenders[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      7.08.  No Other Duties,
      etc[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                ARTICLE
      VIII

              

      

       

      
        	
                 
      

              	
                SECTION
      8.01.  Amendments,
      Etc.[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.02.  Notices, Etc.[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.03.  No Waiver;
      Remedies[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.04.  Costs and
      Expenses[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.05.  Binding
      Effect[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.06.  Assignments and
      Participations[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.07.  Confidentiality[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.08.  Governing Law[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.09.  Execution in
      Counterparts[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.10.  Jurisdiction,
      Etc.[INSERT
      PAGE NUMBER]

              

      

       

      
        	
                 
      

              	
                SECTION
      8.11.  Waiver of Jury
      Trial[INSERT
      PAGE NUMBER]

              

      

       

      

      

      Schedules

       

      Schedule
I - List of Applicable Lending Offices

       

      Schedule
5.02(a) - Existing Liens

       

      Exhibits

       

      Exhibit
A                          
-       Form of Note

       

      Exhibit
B                          
-       Form of Notice of
Borrowing

       

      Exhibit
C                          
-       Form of Assignment and
Acceptance

       

      Exhibit
D                          
-       Form of Opinion of Counsel for the
Borrowerexhibit10.htm

Exhibit
10.1

     

     

     

     

     

     

     

     

     

    AMENDED
AND RESTATED DECLARATION OF TRUST

     

    OF

     

    WASHINGTON
PREFERRED CAPITAL TRUST

     

    Dated as
of April 7, 2008

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      TABLE OF
CONTENTS

      
        	 	 	 Page
	 
      

                ARTICLE
      I

              
	 	 	 
	
                Section
      1.1.

              	
                Definitions

              	
                1

              
	 	 	 
	
                ARTICLE
      II

              
	
                ORGANIZATION

              
	
                Section
      2.1.

              	
                Name

              	10
	
                Section
      2.2.

              	
                Office

              	10
	
                Section
      2.3

              	
                Purpose

              	10
	
                Section
      2.4.

              	
                Authority

              	
                10

              
	
                Section
      2.5.

              	
                Title
      to Property of the Trust

              	
                11

              
	
                Section
      2.6.

              	
                Powers
      and Duties of the Trustees and the Administrators

              	
                11

              
	
                Section
      2.7.

              	
                Prohibition
      of Actions by the Trust and the Trustees

              	
                16

              
	
                Section
      2.8.

              	
                Powers
      and Duties of the Institutional Trustee

              	
                16

              
	
                Section
      2.9.

              	
                Certain
      Duties and Responsibilities of the Trustees and the
      Administrators

              	
                18

              
	
                Section
      2.10.

              	
                Certain
      Rights of Institutional Trustee

              	
                20

              
	
                Section
      2.11.

              	
                Delaware
      Trustee

              	
                22

              
	
                Section
      2.12.

              	
                Execution
      of Documents

              	
                22

              
	
                Section
      2.13.

              	
                Not
      Responsible for Recitals or Issuance of Securities

              	
                22

              
	
                Section
      2.14.

              	
                Duration
      of Trust

              	
                23

              
	
                Section
      2.15.

              	
                Mergers

              	
                23

              
	 	 	 
	
                ARTICLE
      III

              
	
                SPONSOR

              
	
                Section
      3.1.

              	
                Sponsor’s
      Purchase of Common Securities

              	
                25

              
	
                Section
      3.2.

              	
                Responsibilities
      of the Sponsor

              	
                25

              
	 	 	 
	
                ARTICLE
      IV

              
	
                TRUSTEES
      AND ADMINISTRATORS

              
	
                Section
      4.1.

              	
                Number
      of Trustees

              	
                25

              
	
                Section
      4.2.

              	
                Delaware
      Trustee

              	
                25

              
	
                Section
      4.3.

              	
                Institutional
      Trustee; Eligibility

              	
                26

              
	
                Section
      4.4.

              	
                Administrators

              	
                26

              
	
                Section
      4.5.

              	
                Appointment,
      Removal and Resignation of the Trustees and the
    Administrators

              	
                27

              
	
                Section
      4.6.

              	
                Vacancies
      Among Trustees

              	
                28

              
	
                Section
      4.7.

              	
                Effect
      of Vacancies

              	
                29

              
	
                Section
      4.8.

              	
                Meetings
      of the Trustees and the Administrators

              	
                29

              
	
                Section
      4.9.

              	
                Delegation
      of Power

              	
                29

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	
                Section
      4.10.

              	
                Merger,
      Conversion, Consolidation or Succession to Business

              	
                30

              
	 	 	 
	
                ARTICLE
      V

              
	
                DISTRIBUTIONS

              
	
                Section
      5.1.

              	
                Distributions

              	
                30

              
	 	 	 
	
                ARTICLE
      VI

              
	
                ISSUANCE
      OF SECURITIES

              
	
                Section
      6.1.

              	
                General
      Provisions Regarding Securities

              	
                30

              
	
                Section
      6.2.

              	
                Paying
      Agent, Transfer Agent, Calculation Agent and Registrar

              	
                32

              
	
                Section
      6.3.

              	
                Form
      and Dating

              	
                32

              
	
                Section
      6.4.

              	
                Book-Entry
      Capital Securities

              	
                33

              
	
                Section
      6.5.

              	
                Mutilated,
      Destroyed, Lost or Stolen Certificates

              	
                36

              
	
                Section
      6.6.

              	
                Temporary
      Certificates

              	
                36

              
	
                Section
      6.7. 

              	
                Cancellation

              	
                36

              
	
                Section
      6.8.

              	
                Rights
      of Holders; Waivers of Past Defaults

              	
                36

              
	 	 	 
	
                ARTICLE
      VII

              
	
                DISSOLUTION
      AND TERMINATION OF TRUST

              
	
                Section
      7.1.

              	
                Dissolution
      and Termination of Trust

              	
                38

              
	 	 	 
	
                ARTICLE
      VIII

              
	
                TRANSFER
      OF INTERESTS

              
	
                Section
      8.1.

              	
                General

              	39
	
                Section
      8.2.

              	
                Transfer
      Procedures and Restrictions

              	
                41

              
	
                Section
      8.3.

              	
                Deemed
      Security Holders

              	
                44

              
	
                Section
      8.4.

              	
                Transfer
      of Initial Securities

              	
                44

              
	
                Section
      8.5.

              	
                Exchange
      of Capital Securities by Sponsor or its Affiliates

              	
                45

              
	
                Section
      8.6.

              	
                Obligation
      of the Trust to Eliminate a DTC Deliver Order Chill in Certain
      Circumstances

              	
                46

              
	 	 	 
	
                ARTICLE
      IX

              
	
                LIMITATION
      OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
  OTHERS

              
	
                Section
      9.1.

              	
                Liability

              	
                47

              
	
                Section
      9.2.

              	
                Exculpation

              	
                47

              
	
                Section
      9.3.

              	
                Fiduciary
      Duty

              	
                47

              
	
                Section
      9.4.

              	
                Indemnification

              	
                48

              
	
                Section
      9.5.

              	
                Outside
      Businesses

              	
                51

              
	
                Section
      9.6.

              	
                Compensation;
      Fee

              	
                51

              
	 	 	 
	
                ARTICLE
      X

              
	
                ACCOUNTING

              
	
                Section
      10.1.

              	
                Fiscal
      Year

              	
                52

              
	
                Section
      10.2.

              	
                Certain
      Accounting Matters

              	
                52

              

      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      

        	
                Section
      10.3.

              	
                Banking

              	
                53

              
	
                Section
      10.4.

              	
                Withholding

              	
                53

              
	 	 	 
	
                ARTICLE
      XI

              
	
                AMENDMENTS
      AND MEETINGS

              
	
                Section
      11.1.

              	
                Amendments

              	
                54

              
	
                Section
      11.2.

              	
                Meetings
      of the Holders of the Securities; Action by Written
Consent

              	
                56

              
	 	 	 
	 
      

                ARTICLE
      XII

              
	
                REPRESENTATIONS
      OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE

              
	
                Section
      12.1.

              	
                Representations
      and Warranties of Institutional Trustee

              	
                57

              
	
                Section
      12.2.

              	
                Representations
      and Warranties of Delaware Trustee

              	
                58

              
	 	 	 
	
                ARTICLE
      XIII

              
	
                MISCELLANEOUS

              
	
                Section
      13.1.

              	
                Notices

              	59
	
                Section
      13.2.

              	
                Governing
      Law

              	
                60

              
	
                Section
      13.3.

              	
                Submission
      to Jurisdiction

              	
                60

              
	
                Section
      13.4.

              	
                Intention
      of the Parties

              	
                60

              
	
                Section
      13.5.

              	
                Headings

              	
                60

              
	
                Section
      13.6.

              	
                Successors
      and Assigns

              	
                60

              
	
                Section
      13.7.

              	
                Partial
      Enforceability

              	
                61

              
	
                Section
      13.8.

              	
                Counterparts

              	
                61

              
	 	 	 
	 	 	 
	 ANNEXES
      AND EXHIBITS
	 ANNEX
      I	Terms
      of Capital Securities and Common Securities	 
	 	 	 
	EXHIBIT
      A-1	Form
      of Capital Security Certificate	 
	EXHIBIT
      A-2  	Form
      of Common Security Certificate	 
	EXHIBIT
      B	Form
      of Administrator’s Certificate of the Trust	 
	EXHIBIT
      C	Form
      of Transferee Certificate to be Executed by Accredited
      Investor	 
	EXHIBIT
      D	Form
      of Transferor Certificate to be Executed for QIBs	 
	EXHIBIT
      E	Form
      of Transferee Certificate to be Executed by Non-U.S.
    Persons	 

      

       

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

       

    

    AMENDED
AND RESTATED DECLARATION OF TRUST

     

    OF

     

    WASHINGTON
PREFERRED CAPITAL TRUST

     

    April 7,
2008

     

    AMENDED
AND RESTATED DECLARATION OF TRUST (as amended or supplemented from time to time
in accordance with the terms hereof, this “Declaration”), dated and effective as
of April 7, 2008, by the Trustees (as defined herein), the Administrators (as
defined herein), the Sponsor (as defined herein) and the holders from time to
time of undivided beneficial interests in the assets of the Trust (as defined
herein) to be issued pursuant to this Declaration.

     

    WHEREAS,
certain of the Trustees and the Sponsor established Washington Preferred Capital
Trust (the “Trust”), a statutory trust under the Statutory Trust Act (as defined
herein), pursuant to a Declaration of Trust, dated as of March 28, 2008 (the
“Original Declaration”), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on March 28, 2008, for the sole purpose of
issuing and selling the Securities (as defined herein) representing undivided
beneficial interests in the assets of the Trust, investing the proceeds thereof
in the Debentures (as defined herein) of the Debenture Issuer (as defined
herein) and engaging in those activities necessary, advisable or incidental
thereto;

     

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

     

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

     

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

     

    ARTICLE
I

     

    INTERPRETATION
AND DEFINITIONS

     

    Section
1.1. Definitions.  Unless
the context otherwise requires:

     

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Administrators”
means each of David V. Devault, John F. Treanor and Mark K. W. Gim, solely in
such Person’s capacity as Administrator of the Trust continued hereunder and not
in such Person’s individual capacity, or such Administrator’s successor in
interest in such capacity, or any successor appointed as herein
provided.

     

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

     

    “Applicable
Depositary Procedures” means, with respect to any transfer or transaction
involving a Book-Entry Capital Security, the rules and procedures of the
Depositary for such Book-Entry Capital Security, in each case to the extent
applicable to such transaction and as in effect from time to time.

     

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

     

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

     

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

     

    (b)           such
Person commences a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, consents to the entry of an

    
      
        
        

      

      
        2

        
          

        

      

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

    

     

    “Beneficial
Owner” means each Person who is the beneficial owner of Book-Entry Capital
Securities as reflected in the records of the Depositary or, if a Depositary
Participant is not the beneficial owner, then the beneficial owner as reflected
in the records of the applicable Depositary Participant.

     

    “Book-Entry
Capital Security” means a Capital Security the ownership and transfers of which
shall be reflected and made, as applicable, through book entries by the
Depositary.

     

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

     

    “Calculation
Agent” has the meaning set forth in Section 1.01 of the Indenture.

     

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

     

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

     

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

     

    “Certificate”
means any certificate evidencing Securities.

     

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

     

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

     

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

     

    “Commission”
means the United States Securities and Exchange Commission.

     

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

     

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

     

    “Company
Indemnified Person” means (a) any Administrator, (b) any Affiliate of any
Administrator, (c) any officers, directors, shareholders, members, partners,
employees, 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        
representatives
or agents of any Administrator or (d) any officer, director, shareholder,
member, partner, employee or agent of the Trust or its
Affiliates.

    

     

    “Corporate
Trust Office” means the office of the Institutional 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
execution of this Declaration shall be Rodney Square North, 1100 North Market
Street, Wilmington, DE 19890-0001, Attention: Corporate Capital
Markets.

     

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

     

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

     

    “Debenture
Issuer” means Washington Trust Bancorp, Inc., a bank holding company
incorporated in the State of Rhode Island, in its capacity as issuer of the
Debentures under the Indenture, and any permitted successor under the
Indenture.

     

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

     

    “Debentures”
means the Floating Rate Junior Subordinated Debt Securities due 2038 to be
issued by the Debenture Issuer under the Indenture.

     

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

     

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

     

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

     

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

     

    “Depositary”
means an organization registered as a clearing agency under the Exchange Act
that is designated as Depositary by the Sponsor.  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 or on behalf of the
Depositary.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    “DTC”
means The Depository Trust Company or any successor thereto.

     

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

     

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

     

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

     

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

     

    “Fiduciary
Indemnified Person” shall mean each of the Institutional Trustee (including in
its individual capacity), the Delaware Trustee (including in its individual
capacity), any Affiliate of the Institutional Trustee or the Delaware Trustee,
and any officers, directors, shareholders, members, partners, employees,
representatives, custodians, nominees or agents of the Institutional Trustee or
the Delaware Trustee.

     

    “Fiscal
Year” has the meaning set forth in Section 10.1.

     

    “Global
Capital Security” means a global Certificate evidencing ownership of Book-Entry
Capital Securities.

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (a)           a
statement that each Authorized Officer or Person, as the case may be, signing
the Officers’ Certificate has read the covenant or condition and the definitions
relating thereto;

     

    (b)           a
brief statement of the nature and scope of the examination or investigation
undertaken by each Authorized Officer or Person, as the case may be, in
rendering the Officers’ Certificate;

     

    (c)           a
statement that each Authorized Officer or Person, as the case may be, has made
such examination or investigation as, in his or her opinion, is necessary to
enable such Authorized Officer or Person, as the case may be, 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 Authorized Officer or Person, as
the case may be, such condition or covenant has been complied with.

     

    “Opinion of Counsel” means an opinion
in writing signed by legal counsel, who may be an employee of or counsel to the
Sponsor or Trust or may be other counsel reasonably satisfactory to the
Trustee.

     

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

     

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

     

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

     

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

     

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

     

    “Placement
Agent” has the meaning given in the Placement Agreement.

     

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

     

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

     

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

     

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

     

    “Purchaser”
has the meaning set forth in the Placement Agreement.

     

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

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    “Reference
Banks” has the meaning set forth in paragraph 2(b)(2) of Annex I.

     

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

     

    “Regulation
S Global Capital Security” means a Global Capital Security evidencing ownership
of Book-Entry Capital Securities initially issued to non-“U.S. Persons” in
“offshore transactions” under, and within the meaning of, Regulation S under the
Securities Act.

     

    “Relevant
Trustee” has the meaning set forth in Section 4.5(a).

     

    “Resale
Restriction Termination Date” means, with respect to any Capital Security, the
date which is the later of (i) one year (or such shorter period of time as
permitted by Rule 144 under the Securities Act) after the later of (y) the date
of original issuance of such Capital Security and (z) the last date on which the
Trust or any Affiliate of the Trust was the Holder of such Capital Security (or
any predecessor thereto) and (ii) such later date, if any, as may be required by
any subsequent change in applicable law.

     

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

     

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

     

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

     

    “Rule
144A Global Capital Security” means a Global Capital Security evidencing
ownership of Book-Entry Capital Securities initially issued to
QIBs.

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Securities
Register” has the meaning set forth in Section 6.2(a).

     

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

     

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

     

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

     

    “Sponsor”
means Washington Trust Bancorp, Inc., a bank holding company that is
incorporated in the State of Rhode Island, or any permitted successor of the
Debenture Issuer under the Indenture, in its capacity as sponsor of the
Trust.

     

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

     

    “Successor
Delaware Trustee” has the meaning set forth in Section 4.5(e).

     

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

     

    “Successor
Institutional Trustee” has the meaning set forth in Section 4.5(b).

     

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

     

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

     

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

     

    “Telerate
Page 3750” has the meaning set forth in paragraph 2(b)(1) of Annex
I.

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    ARTICLE
II

     

    ORGANIZATION

     

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

     

    Section
2.2. Office.  The
address of the principal office of the Trust, which shall be in a state of the
United States or the District of Columbia, is 23 Broad Street, Westerly, Rhode
Island 02891.  On ten Business Days’ written notice to the
Institutional Trustee and the Holders of the Securities, the Administrators may
designate another principal office, which shall be in a state of the United
States or the District of Columbia.

     

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

     

    Section
2.4. Authority.  Except
as specifically provided in this Declaration, the Institutional Trustee shall
have exclusive and complete authority to carry out the purposes of the
Trust.  An action taken by a Trustee on behalf of the Trust and in
accordance with such Trustee’s powers shall constitute the act of and serve to
bind the Trust.  In dealing with the Trustees acting on behalf of the
Trust, no Person shall be required to inquire into the authority of the Trustees
to bind the Trust.  Persons dealing with the Trust are entitled to
rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.  The Administrators 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        
shall
have only those ministerial duties set forth herein with respect to
accomplishing the purposes of the Trust and are not intended to be trustees or
fiduciaries with respect to the Trust or the Holders.  The
Institutional Trustee shall have the right, but shall not be obligated except as
provided in Section 2.6, to perform those duties assigned to the
Administrators.

    

     

    Section
2.5. Title to Property of the
Trust.  Except as provided in Section 2.6(g) and Section 2.8
with respect to the Debentures and the Property Account or as otherwise provided
in this Declaration, legal title to all assets of the Trust shall be vested in
the Trust.  The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in the
assets of the Trust.

     

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

     

    (a) The
Trustees and the Administrators shall conduct the affairs of the Trust in
accordance with the terms of this Declaration.  Subject to the
limitations set forth in paragraph (b) of this Section, and in accordance
with the following provisions (i) and (ii), the Administrators and, at the
direction of the Administrators, the Trustees, shall have the authority to enter
into all transactions and agreements determined by the Administrators to be
appropriate in exercising the authority, express or implied, otherwise granted
to the Trustees or the Administrators, as the case may be, under this
Declaration, and to perform all acts in furtherance thereof, including without
limitation, the following:

     

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

     

    (A) the
issuance and sale of the Securities;

     

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

     

    (C) ensuring
compliance with the Securities Act and applicable securities or blue sky laws of
states and other jurisdictions;

     

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

     

    (E) the
sending of notices (other than notices of default) and other information
regarding the Securities and the Debentures to the Holders in accordance with
this Declaration, including notice of any 

    
      
        
        

      

      
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      notice
received from the Debenture Issuer of its election to defer payments of interest
on the Debentures by extending the interest payment period under the
Indenture;

    

     

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

     

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

     

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

     

    (I) unless
otherwise determined by the Holders of a Majority in liquidation amount of the
Securities or as otherwise required by the Statutory Trust Act, to execute on
behalf of the Trust (either acting alone or together with any or all of the
Administrators) any documents that the Administrators have the power to execute
pursuant to this Declaration;

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

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

     

    (A) the
establishment of the Property Account;

     

    (B) the
receipt of the Debentures;

     

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

     

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

     

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

     

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

     

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

     

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

     

    (I) after any
Event of Default (of which the Institutional Trustee has knowledge (as provided
in Section 2.10(m) hereof)) (provided, that such
Event of Default is not by or with respect to the Institutional Trustee), the
taking of any action that the Institutional Trustee may from time to time
determine is necessary, advisable or incidental for the foregoing to give effect
to the terms of this Declaration and protect and 

    
      
        
        

      

      
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      conserve
the Trust Property for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder);

    

     

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

     

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

     

    (iii) The
Institutional Trustee shall have the power and authority, and is hereby
authorized, to act on behalf of the Trust with respect to any of the duties,
liabilities, powers or the authority of the Administrators set forth in Section
2.6(a)(i)(E) and (F) herein but shall not have a duty to do any such act unless
specifically requested to do so in writing by the Sponsor, and shall then be
fully protected in acting pursuant to such written request; and in the event of
a conflict between the action of the Administrators and the action of the
Institutional Trustee, the action of the Institutional Trustee shall
prevail.

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
2.8. Powers and Duties of the
Institutional Trustee.

     

    (a) The legal
title to the Debentures shall be owned by and held of record in the name of the
Institutional Trustee in trust for the benefit of the Trust.  The
right, title and interest of the Institutional Trustee to the Debentures shall
vest automatically in each Person who may hereafter be appointed as
Institutional Trustee in accordance with Section 4.5.  Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.

     

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

     

    (c) The
Institutional Trustee shall:

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

    (ii) a
Successor Institutional Trustee has been appointed and has accepted that
appointment in accordance with Section 4.5.

     

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

     

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

     

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

     

    (a) The
Institutional Trustee, before the occurrence of any Event of Default (of which
the Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof))
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Institutional Trustee.  In case an Event of Default (of which the
Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof)),
has occurred (that has not been cured or waived pursuant to Section 6.8), the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

     

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

    
      
        
        

      

      
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the
Holders, such Trustee’s or Administrator’s duties may be restricted or
eliminated by provisions in this Declaration, except that this Declaration may
not eliminate the implied contractual covenant of good faith and fair dealing. A
Trustee or Administrator shall not be liable to the Trust or a Holder or another
Person that is party to or otherwise bound by the Declaration for breach of
fiduciary duty for such Trustee’s or Administrator’s good faith reliance on the
provisions of the Declaration. The provisions of this Declaration, to the extent
that they restrict or eliminate the liabilities of the Trustees or the
Administrators otherwise existing at law or in equity, are agreed by the Sponsor
and the Holders to replace such other liabilities of the Trustees or the
Administrators, as the case may be, except that no provision of this Declaration
may limit or eliminate liability for any act or omission that constitutes a bad
faith violation of the implied contractual covenant of good faith and fair
dealing.

    

     

    (c) All
payments made by the Institutional Trustee or a Paying Agent in respect of the
Securities shall be made only from the revenue and proceeds from the Trust
Property and only to the extent that there shall be sufficient revenue or
proceeds from the Trust Property to enable the Institutional Trustee or a Paying
Agent to make payments in accordance with the terms hereof.  Each
Holder, by its acceptance of a Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees and the
Administrators are not personally liable to it for any amount distributable in
respect of any Security or for any other liability in respect of any
Security.  This Section 2.9(c) does not limit the liability of the
Trustees expressly set forth elsewhere in this Declaration or, in the case of
the Institutional Trustee, in the Trust Indenture Act.

     

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

     

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

     

    (ii) the
Institutional Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of a Majority in liquidation amount of the Capital Securities or the
Common Securities, as applicable, relating to the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee,
or exercising any trust or power conferred upon the Institutional Trustee under
this Declaration;

     

    (iii) the
Institutional Trustee’s sole duty with respect to the custody, safe keeping and
physical preservation of the Debentures and the Property Account shall be to
deal with such property in a similar manner as the Institutional Trustee deals
with similar property for its own account, subject to the

    
      
        
        

      

      
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      protections
and limitations on liability afforded to the Institutional Trustee under this
Declaration and the Trust Indenture Act;

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

    (f) the
Institutional Trustee may consult with counsel of its selection (which counsel
may be counsel to the Sponsor or any of its Affiliates) and the advice of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice; the Institutional Trustee
shall have the right at any time to seek instructions concerning the
administration of this Declaration from any court of competent
jurisdiction;

     

    (g) the
Institutional Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Declaration at the request or direction of any of
the Holders pursuant to this Declaration, unless such Holders shall have offered
to the Institutional Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction; provided, that
nothing contained in this Section 2.10(g) shall be taken to relieve the
Institutional Trustee, upon the occurrence of an Event of Default (of which the
Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof))
that has not been cured or waived, of its obligation to exercise the rights and
powers vested in it by this Declaration;

     

    (h) the
Institutional Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other evidence of indebtedness or other paper or document, unless
requested in writing to do so by one or more Holders, but the Institutional
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

    Section
2.11. Delaware
Trustee.  Notwithstanding any other provision of this
Declaration other than Section 4.2, the Delaware Trustee shall not be entitled
to exercise any powers, and the Delaware Trustee shall not have any of the
duties and responsibilities of any of the Trustees or the Administrators
specified in this Declaration (except as may be required under the Statutory
Trust Act).  Except as set forth in Section 4.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of § 3807 of the Statutory Trust Act.

     

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

     

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

    
      
        
        

      

      
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Trustees
make no representations as to the validity or sufficiency of this Declaration,
the Debentures or the Securities.

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (v) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the Holders
of the Securities or any Successor Securities in any 

    
      
        
        

      

      
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      material
respect (other than with respect to any dilution of such Holders’ interests in
the Successor Entity);

    

     

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

     

    (vii) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Trust has received an Opinion of Counsel experienced in such matters
to the effect that:

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
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    ARTICLE
III

     

    SPONSOR

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
IV

     

    TRUSTEES
AND ADMINISTRATORS

     

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

     

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

     

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

     

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

    
      
        
        

      

      
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    (a) a natural
person who is a resident of the State of Delaware and a U.S. Person at least 21
years of age; or

     

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

     

    The
initial Delaware Trustee shall be Wilmington Trust Company.

     

    Section
4.3. Institutional Trustee;
Eligibility.

     

    (a) There
shall at all times be one Trustee that shall act as Institutional Trustee which
shall:

     

    (i) not be an
Affiliate of the Sponsor;

     

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

     

    (iii) be a
banking corporation or national association organized and doing business under
the laws of the United States of America or any state thereof or of the District
of Columbia and authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state or
District of Columbia authority.  If such corporation or national
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 4.3(a)(iii), the combined capital and
surplus of such corporation or national association shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.

     

    (b) If at any
time the Institutional Trustee shall cease to be eligible to so act under
Section 4.3(a), the Institutional Trustee shall immediately resign in the manner
and with the effect set forth in Section 4.5.

     

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

     

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

     

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

    
      
        
        

      

      
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of the
Administrators may be exercised by, or with the consent of, any one such
Administrator acting alone.

    

     

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

     

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

     

    (b) Subject
to Section 4.5(a), a Relevant Trustee may resign at any time by giving written
notice thereof to the Holders of the Securities and by appointing a successor
Relevant Trustee.  Upon the resignation of the Institutional Trustee,
the Institutional Trustee shall appoint a successor by requesting from at least
three Persons meeting the eligibility requirements their expenses and charges to
serve as the successor Institutional Trustee on a form provided by the
Administrators, and selecting the Person who agrees to the lowest expense and
charges (the “Successor Institutional Trustee”).  If the instrument of
acceptance by the successor Relevant Trustee required by this Section shall not
have been delivered to the Relevant Trustee within 60 days after the giving of
such notice of resignation or delivery of the instrument of removal, the
Relevant Trustee may petition, at the expense of the Trust, any federal, state
or District of Columbia court of competent jurisdiction for the appointment of a
successor Relevant Trustee.  Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Relevant
Trustee.  The Institutional Trustee shall have no liability for the
selection of such successor pursuant to this Section.

     

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

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

    Section
4.6. Vacancies Among
Trustees.  If a Trustee ceases to hold office for any reason
and the number of Trustees is not reduced pursuant to Section 4.1, or if the
number of Trustees is increased pursuant to Section 4.1, a vacancy shall
occur.  A resolution certifying the existence of such vacancy by the
Trustees or, if there are more than two, a majority of the 

    
      
        
        

      

      
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Trustees
shall be conclusive evidence of the existence of such vacancy.  The
vacancy shall be filled with a Trustee appointed in accordance with Section
4.5.

    

     

    Section
4.7. Effect of
Vacancies.  The death, resignation, retirement, removal,
bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the
duties of a Trustee shall not operate to dissolve, terminate or annul the Trust
or terminate this Declaration.  Whenever a vacancy in the number of
Trustees shall occur, until such vacancy is filled by the appointment of a
Trustee in accordance with Section 4.5, the Institutional Trustee shall have all
the powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by this Declaration.

     

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

     

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

     

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

    
      
        
        

      

      
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    Section
4.10. Merger, Conversion,
Consolidation or Succession to Business.  Any Person into which
the Institutional Trustee or the Delaware Trustee, as the case may be, may be
merged or converted or with which either may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the
Institutional Trustee or the Delaware Trustee, as the case may be, shall be a
party, or any Person succeeding to all or substantially all the corporate trust
business of the Institutional Trustee or the Delaware Trustee, as the case may
be, shall be the successor of the Institutional Trustee or the Delaware Trustee,
as the case may be, hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, provided such Person
shall be otherwise qualified and eligible under this Article and, provided, further, that such
Person shall file an amendment to the Certificate of Trust with the Secretary of
State of the State of Delaware as contemplated in Section 4.5(i).

     

    ARTICLE
V

     

    DISTRIBUTIONS

     

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

     

    ARTICLE
VI

     

    ISSUANCE
OF SECURITIES

     

    Section
6.1. General Provisions Regarding
Securities.

     

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

    
      
        
        

      

      
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Securities
to payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Capital Securities.

    

     

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

     

    (c) Capital
Securities initially issued by the Trust to Persons other than QIBs or non-“U.S.
Persons” in “offshore transactions” under, and within the meaning of, Regulation
S under the Securities Act shall be issued in the form of one or more Definitive
Capital Securities Certificates. The Capital Securities initially issued to QIBs
or non-“U.S. Persons” in “offshore transactions” under, and within the meaning
of, Regulation S under the Securities Act shall be issued either (i) in the form
of one or more Global Capital Securities Certificates or (ii) if indicated in
writing by the Placement Agent to the Sponsor on or prior to the Closing Date,
in the form of one or more Definitive Capital Securities
Certificates.  Global Capital Security Certificates shall be, except
as provided in Section 6.4, registered in the name of the Depositary or its
nominee and deposited with the Depositary or, if not so deposited, held by the
Institutional Trustee as a custodian for the Depositary, for credit by the
Depositary to the respective accounts of the Depositary Participants (or such
other accounts as they may direct). The Trust, as issuer and the Institutional
Trustee, as custodian, are hereby authorized to execute, deliver and perform any
letter of representations and other similar agreements or writings in connection
with Capital Securities issued in the form of Global Capital
Securities.

     

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

    Section
6.3. Form and
Dating.

     

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

    
      
        
        

      

      
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this
Declaration, expressly agree to such terms and provisions and to be bound
thereby.  Capital Securities will be issued only in blocks having an
aggregate liquidation amount of not less than $100,000.

    

     

    (b) The
Capital Securities are being offered and sold by the Trust initially pursuant to
the Placement Agreement in the form of a Global Capital Security or one or more
Definitive Capital Securities, in accordance with Section 6.1(c), and will be
registered in the name of the Holder thereof, without coupons and with the
Restricted Securities Legend.

     

    Section
6.4. Book-Entry Capital
Securities.

     

    (a) Book-Entry
Capital Securities and Definitive Capital Securities may be exchanged or
transferred, in whole or in part, for one another only if such exchange or
transfer complies with such procedures as are substantially consistent with this
Section 6.4 and Article VIII.  In addition, if (i) the Depositary
advises the Administrators and the Institutional Trustee in writing that the
Depositary is no longer willing or able to properly discharge its
responsibilities with respect to the Global Capital Security, and no qualified
successor is appointed by the Administrators within ninety (90) days of receipt
of such notice, (ii) the Depositary ceases to be a clearing agency registered
under the Exchange Act and the Administrators fail to appoint a qualified
successor within ninety (90) days of obtaining knowledge of such event or (iii)
an Indenture Event of Default has occurred and is continuing, a Global Capital
Security may be exchanged, in whole or in part, for Definitive Capital
Securities registered in the names of the Beneficial Owners of the Book-Entry
Capital Securities evidenced thereby. Upon the occurrence of any event specified
in clause (i), (ii) or (iii) above, the Administrators shall notify the
Depositary and instruct the Depositary to notify all Beneficial Owners and the
Institutional Trustee of the occurrence of such event and of the availability of
Definitive Capital Securities Certificates to Beneficial Owners. Upon the
issuance of Definitive Capital Securities Certificates, the Administrators and
the Institutional Trustee shall recognize the Persons in whose names the
Definitive Capital Securities Certificates are registered in the Securities
Register as the Holders of the Capital Securities evidenced thereby for all
purposes under this Declaration and the Capital Securities.

     

    (b) If any
Global Capital Security is to be exchanged or transferred for Definitive Capital
Securities Certificates, or canceled in part, or if any Definitive Capital
Securities Certificate is to be exchanged in whole or in part for any Global
Capital Security, then (i) such Global Capital Security shall be so surrendered
for exchange, transfer or cancellation as provided in this Section 6.4 and
Article VIII and (ii) the aggregate liquidation amount represented by such
Global Capital Security shall be reduced or increased, subject to Section
8.2(d), by an amount equal to the liquidation amount represented by that portion
of the Global Capital Security to be so exchanged, transferred or canceled, or
equal to the liquidation amount represented by such Definitive Capital
Securities Certificates to be so exchanged for any Global Capital Security, as
the case may be, by means of an appropriate adjustment made on the records of
the Registrar, whereupon the Institutional Trustee, in accordance with the
Applicable Depositary Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment to the Administrators or the Registrar of
any Global Capital Security or Securities by the Depositary, accompanied by
registration instructions, the Administrators, or any one of them, 

    
      
        
        

      

      
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shall
execute and the Institutional Trustee shall authenticate and
deliver  Definitive Capital Securities Certificates issuable in
exchange for such Global Capital Securities (or any portion thereof) in
accordance with the instructions of the Depositary.  The Registrar,
Administrators and the Institutional Trustee may conclusively rely on, and shall
be fully protected in relying on, such instructions.

    

     

    (c) Every
Definitive Capital Securities Certificate executed and delivered upon
registration or transfer of, or in exchange for or in lieu of, a Global Capital
Security or any portion thereof shall be executed and delivered in the form of,
and shall be, a Global Capital Security, unless such Definitive Capital
Securities Certificate is registered in the name of a Person other than the
Depositary for such Global Capital Security or a nominee thereof.

     

    (d) Rule 144A Global Capital
Security to Regulation S Global Capital Security. Prior to the Resale
Restriction Termination Date, if a Beneficial Owner of Book-Entry Capital
Securities evidenced by a Rule 144A Global Capital Security deposited with the
Depositary wishes at any time to exchange its interest in such Rule 144A Global
Capital Security for an interest in a Regulation S Global Capital Security, or
to transfer its interest in such  Rule 144A Global Capital Security to
a person who wishes to take delivery thereof in the form of an interest in
such  Regulation S Global Capital Security, such Beneficial Owner may,
subject to the Applicable Depositary Procedures and to the requirements set
forth in the following sentence, exchange or cause the exchange or transfer or
cause the transfer of such interest for an equivalent beneficial interest in
such Regulation S Global Capital Security.  Upon receipt by the
Registrar at its office in Wilmington, Delaware of (1) instructions given in
accordance with the Applicable Depositary Procedures by a Depositary Participant
directing the Registrar to credit or cause to be credited a beneficial interest
in the  Regulation S Global Capital Security in an amount equal to the
beneficial interest in the Rule 144A Global Capital Security to be exchanged or
transferred, (2) a written order from such Depositary Participant given in
accordance with the Applicable Depositary Procedures containing information
regarding the Depositary Participant’s account and, in the case of a transfer
pursuant to and in accordance with Regulation S, the Euroclear or Clearstream
Luxembourg account to be credited with such increase and (3) a certificate
substantially in the form of Exhibit E hereto given by such
Beneficial  Owner, the Registrar shall instruct the Depositary, its
nominee, or the custodian for the Depositary, as the case may be, to reduce or
reflect on its records a reduction of the Rule 144A Global Capital Security by
the aggregate liquidation amount of the beneficial interest in such Rule 144A
Global Capital Security to be so exchanged or transferred and the Registrar
shall instruct the Depositary, its nominee, or the custodian for the Depositary,
as the case may be, concurrently with such reduction, to increase or reflect on
its records an increase of the liquidation amount of such  Regulation
S Global Capital Security by the aggregate liquidation amount of the beneficial
interest in such Rule 144A Global Capital Security to be so exchanged or
transferred, and to credit or cause to be credited to the account of the person
specified in such instructions a beneficial interest in
such  Regulation S Global Capital Security equal to the reduction in
the liquidation amount of such Rule 144A Global Capital Security.

     

    (e) Regulation S Global Capital
Security to Rule 144A Global Capital Security.  Prior to the
Resale Restriction Termination Date, if a Beneficial Owner of Book-Entry Capital
Securities evidenced by a Regulation S Global Capital Security which is
deposited with the Depositary wishes at any time to exchange its interest in
such Regulation S 

    
      
        
        

      

      
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Global
Capital Security for an interest in a Rule 144A Global Capital Security, or to
transfer its interest in such Regulation S Global Capital Security to a person
who wishes to take delivery thereof in the form of an interest in such Rule 144A
Global Capital Security, such Beneficial Owner may, subject to the rules and
procedures of Euroclear or Clearstream Luxembourg and the Applicable Depositary
Procedures, as the case may be, and to the requirements set forth in the
following sentence, exchange or cause the exchange or transfer or cause the
transfer of such interest for an equivalent beneficial interest in such Rule
144A Global Capital Security.  Upon receipt by the Registrar at its
office in Wilmington, Delaware of (1) instructions from Euroclear or Clearstream
Luxembourg or the Depositary, as the case may be, directing the Registrar to
credit or cause to be credited a beneficial interest in the Rule 144A Global
Capital Security equal to the beneficial interest in the  Regulation S
Global Capital Security to be exchanged or transferred, such instructions to
contain information regarding the Depositary Participant’s account with the
Depositary to be credited with such increase, and (2) a certificate
substantially in the form of Exhibit D hereto given by such
Beneficial  Owner, the Registrar shall instruct the Depositary, its
nominee, or the custodian for the Depositary, as the case may be, to reduce or
reflect on its records a reduction of such  Regulation S Global
Capital Security by the aggregate liquidation amount of the beneficial interest
in such Regulation S Global Capital Security to be exchanged or transferred, and
the Registrar shall instruct the Depositary, its nominee, or the custodian for
the Depositary, as the case may be, concurrently with such reduction, to
increase or reflect on its records an increase of the liquidation amount of such
Rule 144A Global Capital Security to be so exchanged or transferred, and to
credit or cause to be credited to the account of the person specified in such
instructions a beneficial interest in such Rule 144A Global Capital Security
equal to the reduction in the liquidation amount of such  Regulation S
Global Capital Security.

    

     

    (f) The
Depositary or its nominee, as registered owner of a Global Capital Security,
shall be the Holder of such Global Capital Security for all purposes under this
Declaration and the Global Capital Security, and Beneficial Owners with respect
to a Global Capital Security shall hold such interests pursuant to the
Applicable Depositary Procedures.  The Registrar, the Administrators
and the Institutional Trustee shall be entitled to deal with the Depositary for
all purposes of this Declaration relating to the Global Capital Securities as
the sole Holder of the Book-Entry Capital Securities represented thereby and
shall have no obligations to the Beneficial Owners thereof.  None of
the Administrators, the Institutional Trustee nor the Registrar shall have any
liability in respect of any transfers effected by the Depositary.

     

    (g) The
rights of the Beneficial Owners of the Book-Entry Capital Securities shall be
exercised only through the Depositary and shall be limited to those established
by law, the Applicable Depositary Procedures and agreements between such
Beneficial Owners and the Depositary and/or its Depositary Participants;
provided, solely for the purpose of determining whether the Holders of the
requisite amount of Capital Securities have voted on any matter provided for in
this Declaration, to the extent that Capital Securities are represented by a
Global Capital Security, the Administrators and the Institutional Trustee may
conclusively rely on, and shall be fully protected in relying on, any written
instrument (including a proxy) delivered to the Institutional Trustee by the
Depositary setting forth the Beneficial Owners’ votes or assigning the right to
vote on any matter to any other Persons either in whole or in
part.  To the extent that Capital Securities are represented by a
Global Capital Security, subject to this Section 6.4, the 

    
      
        
        

      

      
        35

        
          

        

      

      
        
        
initial
Depositary will make book-entry transfers among the Depositary Participants and
receive and transmit payments on the Capital Securities that are represented by
a Global Capital Security to such Depositary Participants, and none of the
Sponsor, the Administrators or the Institutional Trustee shall have any
responsibility or obligation with respect thereto.

    

     

    (h) To the
extent that a notice or other communication to the Holders is required under
this Declaration, for so long as Capital Securities are represented by a Global
Capital Security, the Administrator and the Institutional Trustee shall give all
such notices and communications to the Depositary, and shall have no obligations
to the Beneficial Owners.

     

    Section
6.5. Mutilated, Destroyed, Lost
or Stolen Certificates.  If (a) any mutilated Certificate
should be surrendered to the Registrar, or if the Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) the related Holder shall deliver to the Registrar, the
Administrators and the Institutional Trustee such security or indemnity as may
be reasonably required by them to keep each of them harmless, then, in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, an Administrator on behalf of the Trust shall execute (and in the
case of a Capital Security Certificate, the Institutional Trustee shall
authenticate) and deliver to such Holder, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination.  In connection with the issuance of any new Certificate
under this Section, the Registrar or the Administrators may require such Holder
to pay a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith.  Any Certificate executed and
delivered pursuant to this Section shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any
time.

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

    (c) At any
time after the acceleration of maturity of the Debentures has been made and
before a judgment or decree for payment of the money due has been obtained by
the Debenture Trustee as provided in the Indenture, if the Institutional
Trustee, subject to the provisions hereof, fails to annul any such acceleration
and waive such default, the Holders of a Majority in liquidation amount of the
Capital Securities, by written notice to the Institutional Trustee, the Sponsor
and the Debenture Trustee, may rescind and annul such acceleration and its
consequences if:

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

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

     

    (e) Upon
receipt by the Institutional Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of any part of the
Capital Securities, a record date shall be established for determining Holders
of outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Institutional Trustee
receives such notice.  The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date; provided, that,
unless such declaration of acceleration, or rescission and annulment, as the
case may be, shall have become effective by virtue of the requisite percentage
having joined in such notice prior to the day that is 90 days after such record
date, such notice of declaration of acceleration, or rescission and annulment,
as the case may be, shall automatically and without further action by any Holder
be canceled and of no further effect.  Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new written notice of declaration of acceleration, or
rescission and annulment thereof, as the case may be, that is identical to a
written notice that has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section.

     

    (f) Except as
otherwise provided in this Section, the Holders of a Majority in liquidation
amount of the Capital Securities may, on behalf of the Holders of all the
Capital Securities, waive any past Default or Event of Default and its
consequences.  Upon such waiver,  any such Default or Event
of Default shall cease to exist, and any Default or Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.

     

    ARTICLE
VII

     

    DISSOLUTION
AND TERMINATION OF TRUST

     

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

     

    (i) unless
earlier dissolved, on June 15, 2043, the expiration of the term of the
Trust;

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
VIII

     

    TRANSFER
OF INTERESTS

     

    Section
8.1. General.  (a) Subject to
Sections 6.4, 8.1(c) and 8.5, when a Holder of Capital Securities delivers to
the Registrar in accordance with this Declaration a request to register a
transfer of such Holder’s Capital Securities or to exchange them for an equal
aggregate liquidation amount of Capital Securities represented by different
Certificates or as otherwise provided herein, the Registrar shall register the
transfer or make the exchange when the requirements provided for herein for such
transfer or exchange are met.  To facilitate registrations of
transfers and exchanges, the Trust shall execute and the Institutional Trustee
shall authenticate Capital Security Certificates at the Registrar’s
request.

     

    (b) Upon
issuance of the Common Securities, the Sponsor shall acquire and retain
beneficial and record ownership of the Common Securities and, for so long as the
Securities remain outstanding, the Sponsor shall maintain 100% ownership of the
Common 

    
      
        
        

      

      
        39

        
          

        

      

      
        
        
Securities;
provided, however, that any permitted successor of the Debenture Issuer under
the Indenture may succeed to the Sponsor’s ownership of the Common
Securities.

    

     

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

     

    (d) The
Registrar shall provide in the Securities Register for the registration of
Securities and the registration of transfers and exchanges of Securities, which
will be effected without charge but only upon payment (with such indemnity as
the Registrar may reasonably require) in respect of any tax or other
governmental charges that may be imposed in relation to it.

     

    With
respect to Capital Securities that are not Book-Entry Capital Securities, upon
its receipt of the documents required under this Section 8.1(d) for registration
of transfer of any Securities, the Registrar shall register in the Securities
Register, in the name of the designated transferee or transferees, the
Securities being transferred and thereupon, for all purposes of this
Declaration, such transfer shall be effective and such transferee or transferees
shall be, and such transferor shall no longer be, the Holder of the transferred
Securities.  Upon the registration of transfer of a Security pursuant
to the terms of this Declaration in the name of the new Holder thereof, such
Security shall constitute the same Security as the Security so transferred and
shall be entitled to the same benefits under this Declaration as the Security so
transferred.  The Registrar shall, and is authorized to, record and
register in the Securities Register the transfer of a Security upon the
Registrar’s receipt of originals or copies (which may be by facsimile or other
form of electronic transmission) of (i) a written instrument of transfer in form
reasonably satisfactory to the Registrar duly executed by the Holder or such
Holder’s attorney duly authorized in writing, and (ii) if such Security is being
transferred or exchanged prior to the Resale Restriction Termination Date other
than in accordance with Section 8.4 or Section 8.5, a certificate substantially
in the form set forth as Exhibit C, D or E, as applicable, hereto, executed by
the transferor or transferee, as applicable; thereupon, the Registrar is
authorized to confirm in writing to the transferee and, if requested, to the
transferor of such Security that such transfer has been registered in the
Securities Register and that such transferee is the Holder of such
Security.  The Definitive Capital Securities Certificate so
transferred, duly endorsed by the transferor, shall be surrendered to the
Registrar at the time the transfer conditions specified in the immediately
preceding sentence are satisfied or within five (5) Business Days after the
Registrar has registered the transfer of such Security on the Securities
Register, and promptly after such surrender, an Administrator on behalf of the
Trust shall execute and the Institutional Trustee shall, and is authorized to,
authenticate a Certificate in the name of the transferee or, if the transferee
is a QIB desiring a beneficial interest in a Global Capital Security, in the
name of the Depositary or its nominee, as applicable, as the new Holder of the
Security evidenced thereby.  Until the Definitive Capital Securities
Certificate evidencing the Security so transferred is surrendered to the
Registrar, such Security may not be transferred by such new Holder.

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    Each
Definitive Capital Securities Certificate surrendered in connection with a
registration of transfer or exchange shall be canceled by the Institutional
Trustee pursuant to Section 6.7.  A transferee of a Security shall be
entitled to the rights and subject to the obligations of a Holder hereunder upon
the registration of such transfer in the Securities Register.  Each
such transferee shall be deemed to have agreed to be bound by this
Declaration.

     

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

     

    Section
8.2. Transfer Procedures and
Restrictions.

     

    (a) Prior to
the Resale Restriction Termination Date, Certificates evidencing Capital
Securities shall bear the Restricted Securities Legend.  The
Restricted Securities Legend on any Certificate evidencing outstanding Capital
Securities shall not be removed unless there is delivered to the Trust such
satisfactory evidence, which may include an opinion of counsel, as may be
reasonably required by the Trust, that neither the Restricted Securities Legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of the Securities Act or that such
Securities are not “restricted” within the meaning of Rule 144 under the
Securities Act.  Upon provision of such satisfactory evidence, the
Institutional Trustee, at the written direction of the Trust, shall authenticate
and deliver Capital Securities Certificates that do not bear the Restricted
Securities Legend (other than the first two and last paragraphs of the legend
specified in Section 8.2(c)) in exchange for the Capital Securities Certificates
bearing the Restricted Securities Legend.

     

    (b) Prior to
the Resale Restriction Termination Date, without the written consent of the
Sponsor, Capital Securities that are not Book-Entry Capital Securities may only
be transferred:  (i) to a QIB if the instrument of transfer is
accompanied by a certificate of the transferor substantially in the form set
forth as Exhibit D hereto; (ii) to an “accredited investor” within the meaning
of Rule 501(a) (1), (2), (3), (7) or (8) under the Securities Act if the
instrument of transfer is accompanied by a certificate of the transferee
substantially in the form set forth as Exhibit C hereto; or (iii)  to
a non-“U.S. Person” in an “offshore transaction” under, and within the meaning
of, Regulation S under the Securities Act if the instrument of transfer is
accompanied by a certificate of the transferee substantially in the form set
forth as Exhibit E hereto.  Each certificate furnished pursuant to
this Section 8.2(b) may be an original or a copy (which may be furnished by
facsimile or other form of electronic transmission).

     

    (c) The
Capital Securities may not be transferred prior to the Resale Restriction
Termination Date except in compliance with restrictions on transfer set forth in
the legend set forth below (the “Restricted Securities Legend”), and except as
otherwise contemplated in Section 8.2(a), prior to the Resale Restriction
Termination Date, each Certificate evidencing outstanding Capital Securities
shall bear the Restricted Securities Legend:

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    [THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(“DTC”) OR A  NOMINEE OF DTC.  THIS SECURITY IS EXCHANGEABLE
FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO
TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN THE CIRCUMSTANCES SPECIFIED IN THE
DECLARATION.

     

    UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO 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.]1

     

    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 OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i)
ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405
UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A)
TO THE DEBENTURE ISSUER OR ITS SUBSIDIARY OR THE TRUST, (B) PURSUANT TO RULE
144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER,” AS DEFINED IN RULE 144A, THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 

     

    

                                                                                      

      1 Only
applicable to Global Capital Securities.

    

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        
144A, (C)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
(3), (7) OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY OR SUCH INTEREST OR PARTICIPATION 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, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES
ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE DEBENTURE ISSUER
AND THE TRUST PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C)
OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
AMENDED AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM
THE DEBENTURE ISSUER OR THE TRUST.  THE HOLDER OF THIS SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE
CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

    

     

    THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION HEREIN, 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 OR SUCH INTEREST OR PARTICIPATION 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 OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, 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

    
      
        
        

      

      
        43

        
          

        

      

      
        
        
PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

    

     

    IN
CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE
REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

     

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

     

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

     

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

     

    Section
8.4. Transfer of Initial
Securities.  With respect to Capital Securities that are not
Book-Entry Capital Securities, and notwithstanding the foregoing provisions of
this Article VIII or any other provision of this Declaration (including all
Annexes and Exhibits hereto) to the contrary, any or all of the Capital
Securities initially issued to a Purchaser (the “Initial Securities”) may be
transferred by such Purchaser to any transferee selected by it  that
meets the parameters specified below and, upon delivery to the Registrar, of
originals or copies 

    
      
        
        

      

      
        44

        
          

        

      

      
        
        
(which
may be by facsimile or other form of electronic transmission) of a written
instrument of transfer in form reasonably satisfactory to the Registrar duly
executed by such Purchaser or such Purchaser’s attorney duly authorized in
writing (it being understood that no signature guarantee shall be required),
then the Registrar shall, and is authorized to, record and register on the
Securities Register the transfer of such Initial Securities to such transferee;
thereupon, the Registrar is authorized to confirm in writing to the transferee
and, if requested, to the transferor of such Initial Securities that such
transfer has been registered in the Securities Register and that such transferee
is the Holder of such Initial Securities; provided, however, that a
Purchaser of the Initial Securities, by its acceptance thereof, agrees that it
may not transfer any Initial Securities prior to the Resale Restriction
Termination Date to any transferee that is not a QIB, an “accredited investor”
within the meaning of Rule 501(a)(1), (2), (3), (7) or (8) under the Securities
Act or a non-“U.S. Person” in an “offshore transaction” under, and within the
meaning of, Regulation S under the Securities Act.  The Definitive
Capital Securities Certificate evidencing the Initial Securities to be
transferred, duly endorsed by a Purchaser, shall be surrendered to the Registrar
at the time the transfer conditions specified in the immediately preceding
sentence are satisfied or within five (5) Business Days after the Registrar has
registered the transfer of such Initial Securities in the Securities Register,
and promptly after such surrender, an Administrator on behalf of the Trust shall
execute and, in the case of a Capital Security Certificate, the Institutional
Trustee shall, and is authorized to, authenticate a Certificate in the name of
the transferee or, if the transferee is a QIB desiring a beneficial interest in
a Global Capital Security, in the name of the Depositary or its nominee, as
applicable, as the new Holder of the Initial Securities evidenced
thereby.  Until the Definitive Capital Securities Certificate
evidencing the Initial Securities so transferred is surrendered to the
Registrar, such Initial Securities may not be transferred by such new
Holder.  No other conditions, restrictions or other provisions of this
Declaration or any other document shall apply to a transfer of Initial
Securities by a Purchaser.

    

     

    Section
8.5. Exchange of Capital
Securities by Sponsor or its Affiliates

     

    (a) If at any
time the Sponsor or any of its Affiliates is the Beneficial Owner or Holder of
any Capital Securities, the Sponsor shall deliver or cause to be delivered to
the Institutional Trustee or its designee all the Capital Securities owned by it
or such Affiliate, as the case may be, as soon as practicable after such Capital
Securities are acquired but in no event later than three (3) Business Days after
the Capital Securities are acquired and, subject to compliance with Section 2.05
of the Indenture, receive, in exchange therefor, Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of such Capital
Securities.  The Institutional Trustee shall designate the date of
such exchange (which shall be a date no later than ten (10) Business Days after
the Capital Securities are delivered to the Institutional Trustee or its
designee) and notify the Sponsor and the applicable Affiliate of the Sponsor, if
any, of such date. After the exchange, such Capital Securities will be canceled
and will no longer be deemed to be outstanding and all rights of the Sponsor or
such Affiliate, as applicable, with respect to such Capital Securities will
cease.

     

    (b) In the case of an exchange
described in Section 8.5(a), the Institutional Trustee on behalf of the Trust
will, on the date designated by the Institutional Trustee for such exchange,
exchange Debentures having a principal amount equal to a proportional amount of
the aggregate liquidation amount of the outstanding Common Securities, based on
the ratio of the aggregate liquidation amount of the Capital Securities
exchanged pursuant to Section 8.5(a) divided by the aggregate 

    
      
        
        

      

      
        45

        
          

        

      

      
        
        
liquidation
amount of the Capital Securities outstanding immediately prior to such exchange,
for such proportional amount of Common Securities held by the Sponsor (which
contemporaneously shall be canceled and no longer be deemed to be outstanding);
provided, that the Sponsor delivers or causes to be delivered to the
Institutional Trustee or its designee the required amount of Common Securities
to be exchanged by 10:00 A.M. New York time, on the date on which such exchange
is to occur.

    

     

     Section
8.6. Obligation of the Trust to
Eliminate a DTC Deliver Order Chill In Certain
Circumstances.  In the event that:

     

    (a) the DTC
is the Depositary of a Global Capital Security representing Book-Entry Capital
Securities eligible for transfer pursuant to Regulation S under the Securities
Act; and

     

    (b) in
respect of such Book-Entry Capital Securities, the Trust has issued an order
(the “Deliver Order Chill”) to DTC not to effect book-entry deliveries (except
deliveries via DTC’s Deposit/Withdrawal at Custodian DWAC system in DTC’s
Depositary Participant accounts maintained by banks that act as depositaries for
Clearstream Banking société anonyme and Euroclear) until a specified date (the
“Deliver Order Chill Termination Date”); and

     

    (c) prior to
the Deliver Order Chill Termination Date, a Beneficial Owner of, the authorized
representative of such Beneficial Owner, or any Depositary Participant of DTC in
respect of, such Book-Entry Capital Securities gives the Trust or the Registrar
written notice of its intention to transfer any of such Book-Entry Capital
Securities pursuant to Rule 144A under the Securities Act and otherwise in
compliance with the terms of this Declaration;

     

    then,
upon receipt of such written notice by the Trust or the Registrar, as the case
may be, the Trust, or the Registrar at the written direction of an Administrator
on behalf of the Trust, shall send DTC a notice requesting that the Deliver
Order Chill be eliminated as of a date no later than 2 Business Days after DTC
receives such notice from the Trust, or from the Registrar at the written
direction of an Administrator on behalf of the Trust.

     

    
       
Such notice shall be sent to DTC by secure means (e.g. legible telecopy,
registered or certified mail, overnight delivery) in a timely manner designed to
assure that such notice is in DTC’s possession no later than the close of
business two Business Days prior to the date specified for elimination of the
Delivery Order Chill. Subject to the then applicable rules and procedures of the
DTC, such notice shall (i) if sent by telecopy, be sent to (212) 344-1531 or
(212) 855-3728 and (ii) if delivered by hand or sent by mail or overnight
delivery, such notice shall be sent to: Manager, Eligibility Section,
Underwriting Department, The Depository Trust Company, 55 Water Street, 25th Floor,
New York, NY 10041-0099; provided that in the case of (i) the Trust shall
confirm DTC’s receipt of such telecopy by telephoning DTC’s Underwriting
Department at (212) 855-3731.

       

    

    
      
        
        

      

      
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    ARTICLE
IX

     

    LIMITATION
OF LIABILITY OF

     

    HOLDERS
OF SECURITIES, TRUSTEES OR OTHERS

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Section
9.3. Fiduciary
Duty.  (a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall 

    
      
        
        

      

      
        47

        
          

        

      

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

    

     

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

     

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

     

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

     

    Section
9.4. Indemnification.  (a)

     

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

     

    (ii) The
Sponsor shall indemnify, to the fullest extent permitted by law, any Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the Trust
to procure a judgment in its favor by reason of the fact that such Person is or
was an Indemnified Person against expenses (including attorneys’ fees and
expenses) actually and reasonably incurred by such Person in connection with the
defense or settlement of such action or suit if such Person acted in good faith
and 

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

       

      in a
manner such Person reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Indemnified Person shall
have been adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such Person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.

    

     

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

     

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

     

    (v) To the
fullest extent permitted by law, expenses (including attorneys’ fees and
expenses) incurred by an Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 9.4(a) shall be paid by the Sponsor in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such Indemnified Person to repay such
amount if it shall ultimately be determined that such Person is not entitled to
be indemnified by the Sponsor as authorized in this Section
9.4(a).  Notwithstanding the foregoing, no advance shall be made by
the Sponsor if a determination is reasonably and promptly made (1) in the case
of a Company Indemnified Person (A) by the Administrators by a majority vote of
a Quorum of disinterested Administrators, (B) if such a Quorum is not
obtainable, or, even if obtainable, if a Quorum of disinterested Administrators
so directs, by independent legal counsel in a written opinion or (C) by the
Common Security Holder of the Trust, that, based upon the facts known to the
Administrators, counsel or the Common Security Holder at the time such
determination is made, such Indemnified Person acted in bad faith or in a manner
that such Person either believed to be opposed to 

    
      
        
        

      

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

    

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

    ARTICLE
X

     

    ACCOUNTING

     

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

     

    Section
10.2. Certain Accounting
Matters.

     

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

     

    (b) The
Sponsor shall cause the Administrators to deliver, by hardcopy or electronic
transmission, (i) to each Purchaser and each Holder or beneficial owner of
Securities each Report on Form 10-K and Form 10-Q, if any, prepared by the
Sponsor and filed with the Commission in accordance with the Exchange Act,
within 10 Business Days after the filing thereof or (ii)  if the
Sponsor is (a) not then subject to Section 13 or 15(d) of the Exchange Act (a
“Private Entity”) or (b) exempt from reporting pursuant to Rule 12g3-2(b)
thereunder, the information required by Rule 144A(d)(4) under the Securities
Act.  Notwithstanding the foregoing, so long as a Holder or beneficial
owner of the Capital Securities is a Purchaser or an entity that holds a pool of
trust preferred securities and/or debt securities as collateral for its
securities or a trustee thereof, and the Sponsor is (i) a Private Entity that,
on the date of original issuance of the Capital Securities, is required to
provide audited consolidated financial statements to its primary regulatory
authority, (ii) a Private Entity that, on the date of original issuance of the
Capital Securities, is not required to provide audited consolidated financial
statements to its primary regulatory authority, but subsequently becomes subject
to the audited consolidated financial statement reporting requirements of that
regulatory authority or (iii) subject to Section 13 or 15(d) of the Exchange Act
on the date of original issuance of the Capital Securities or becomes so subject
after the date hereof but subsequently becomes a Private Entity, then, within 90
days after the end of each fiscal year, beginning with the fiscal year in which
the Capital Securities were originally issued if the Sponsor was then subject to
(x) Section 13 or 15(d) of the Exchange Act or (y) audited consolidated
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reporting
requirements of its primary regulatory authority or, otherwise, the earliest
fiscal year in which the Sponsor becomes subject to (1) Section 13 or 15(d) of
the Exchange Act or (2) the audited consolidated financial statement reporting
requirements of its primary regulatory authority, the Sponsor shall deliver, by
hardcopy or electronic transmission, to each Purchaser and each Holder or
beneficial owner of Securities, unless otherwise provided pursuant to the
preceding sentence, (A) a copy of the Sponsor’s audited consolidated financial
statements (including balance sheet and income statement) covering the related
annual period and (B) the report of the independent accountants with respect to
such financial statements.  In addition to the foregoing, the Sponsor
shall deliver to each Purchaser and each Holder or beneficial owner of
Securities within 90 days after the end of each Fiscal Year of the Trust, annual
financial statements of the Trust, including a balance sheet of the Trust as of
the end of such Fiscal Year and the statements of income or loss for the Fiscal
Year then ended, that are prepared at the principal office of the Trust in the
United States, as defined for purposes of Treasury Regulations §
301.7701-7.

    

     

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

     

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

     

    (e) So long
as a Holder or beneficial owner of the Capital Securities is a Purchaser or an
entity that holds a pool of trust preferred securities and/or debt securities or
a trustee thereof, the Sponsor shall cause the Administrators to deliver the
Sponsor’s reports on Form FR Y-9C, FR Y-9LP and FR Y-6 to such Holder promptly
following their filing with the Federal Reserve.

     

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

     

    Section
10.4. Withholding.  The
Institutional Trustee or any Paying Agent and the Administrators shall comply
with all withholding requirements under United States federal, state and local
law.  The Institutional Trustee or any Paying Agent shall request, and
each Holder shall provide to the Institutional Trustee or any Paying Agent, such
forms or certificates 

    
      
        
        

      

      
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as are
necessary to establish an exemption from withholding with respect to the Holder,
and any representations and forms as shall reasonably be requested by the
Institutional Trustee or any Paying Agent to assist it in determining the extent
of, and in fulfilling, its withholding obligations.  The
Administrators shall file required forms with applicable jurisdictions and,
unless an exemption from withholding is properly established by a Holder, shall
remit amounts withheld with respect to the Holder to applicable
jurisdictions.  To the extent that the Institutional Trustee or any
Paying Agent is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a Distribution to the Holder in the amount of the
withholding.  In the event of any claimed overwithholding, Holders
shall be limited to an action against the applicable jurisdiction.  If
the amount required to be withheld was not withheld from actual Distributions
made, the Institutional Trustee or any Paying Agent may reduce subsequent
Distributions by the amount of such withholding.

    

     

    ARTICLE
XI

     

    AMENDMENTS
AND MEETINGS

     

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

     

    (i) the
Institutional Trustee,

     

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

     

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

     

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

     

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

     

    (i) unless
the Institutional Trustee shall have first received

     

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

     

    (B) an
Opinion of Counsel that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities) and that all
conditions precedent to the execution and delivery of such amendment have been
satisfied; or

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (i) cure any
ambiguity;

     

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

     

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

    
      
        
        

      

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

     

    provided, however, that no such
amendment contemplated in clause (i), (ii), (iii) or (iv) shall adversely
affect the powers, preferences, rights or interests of Holders of Capital
Securities.

    

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

     

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

     

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

     

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

    
      
        
        

      

      
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      Securities
entitled to vote who have not consented in writing. The Administrators may
specify that any written ballot submitted to the Holders of the Securities for
the purpose of taking any action without a meeting shall be returned to the
Trust within the time specified by the Administrators.

    

     

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

     

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

     

    ARTICLE
XII

     

    REPRESENTATIONS
OF INSTITUTIONAL TRUSTEE

     

    AND
DELAWARE TRUSTEE

     

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

    ARTICLE
XIII

     

    MISCELLANEOUS

     

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

     

    (a) if given
to the Trust, in care of the Administrators at the Trust’s mailing address set
forth below (or such other address as the Trust may give notice of to the
Holders of the Securities): Washington Preferred Capital Trust, c/o Washington
Trust Bancorp, Inc., 23 Broad Street, Westerly, Rhode Island 02891, Attention:
David V. Devault, Telecopy: 401-348-1565, Telephone: 401-348-1319;

     

    (b) if given
to the Delaware Trustee, at the mailing address set forth below (or such other
address as the Delaware Trustee may give notice of to the Holders of the
Securities): Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, DE 19890-0001, Attention: Corporate Capital Markets,
Telecopy: 302-636-4140, Telephone: 302-651-1000;

     

    (c) if given
to the Institutional Trustee, at the Institutional Trustee’s mailing address set
forth below (or such other address as the Institutional Trustee may give notice
of to the Holders of the Securities): Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, DE 19890-0001, Attention: Corporate
Capital Markets, Telecopy: 302-636-4140, Telephone: 302-651-1000;

     

    (d) if given
to the Holder of the Common Securities, at the mailing address of the Sponsor
set forth below (or such other address as the Holder of the Common Securities
may give notice of to the Trust): Washington Trust Bancorp, Inc., 23 Broad
Street, Westerly, Rhode Island 02891, Attention: David V. Devault, Telecopy:
401-348-1565, Telephone: 401-348-1319; or

     

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

     

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

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

    notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

     

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

     

    Section
13.3. Submission to
Jurisdiction.

     

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

     

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

     

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

     

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

     

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

     

    Section
13.6. Successors and
Assigns.  Whenever in this Declaration any of the parties
hereto is named or referred to, the successors and assigns of such party shall
be deemed 

    
      
        
        

      

      
        60

        
          

        

      

      
        
        
to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.

    

     

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

     

    Section
13.8. Counterparts.  This
Declaration may contain more than one counterpart of the signature page and this
Declaration may be executed by the affixing of the signature of each of the
Trustees and Administrators to any of such counterpart signature pages. All of
such counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a single
signature page.

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

     

     

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

     

    
      	
               
      

            	
              WILMINGTON
      TRUST COMPANY,

            
	 	

              as
      Delaware Trustee

            

    

    
    

     

    
      	
               
      

            	
              By:
      /s/ W. Thomas Morris,
      II              
             
  

            

    

    
      	
               
      

            	
              Name:
      W. Thomas Morris, II

            

    

    
      	
               
      

            	
              Title:

            

    

     

     

    
      	
               
      

            	
              WILMINGTON
      TRUST COMPANY,

            

    

    
      	
               
      

            	
              as
      Institutional Trustee

            

    

     

    
      	
               
      

            	
                    
                      
                  By:
      /s/ W. Thomas Morris,
      II              
             
      

                

              

            

    

    
      	
               
      

            	
              Name:
      W. Thomas Morris. II

            

    

    
      	
               
      

            	
              Title:

            

    

     

     

    
      	
               
      

            	
              Washington
      Trust Bancorp, Inc.

            

    

    
      	
               
      

            	
              as
      Sponsor

            

    

     

    
      	
               
      

            	
              By:
      /s/ David V.
      Devault                               

            

    

    
      	
               
      

            	
              Name:
      David V. Devault

            
	 	

              Title:

            

    

    
    

     

    
      	
               
      

            	
               /s/ David V.
      Devault                                     
      

            

      
        	
                 
      

              	
                David
      V. Devault

              

      

      
        	
                 
      

              	
                as
      Administrator

              

      

       

      
        	
                 
      

              	
                 /s/ John F.
      Treanor                                        
      

              

        
          	
                   
      

                	
                  John
      F. Treanor

                

        

        
          	
                   
      

                	
                  as
      Administrator

                

        

         

      

      
        
          	
                   
      

                	
                   /s/ Mark K.
      Gim                                              
      

                

          
            	
                     
      

                  	
                    Mark
      K. W. Gim

                  

          

          
            	
                     
      

                  	
                    as
      Administrator

                  

          

           

        

      

    

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

    ANNEX
I

     

    TERMS
OF

     

    CAPITAL
SECURITIES AND COMMON SECURITIES

     

    Pursuant
to Section 6.1 of the Amended and Restated Declaration of Trust, dated as of
April 7, 2008 (as amended from time to time, the “Declaration”), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities and the Common Securities (collectively,
the “Securities”) are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration):

     

    1.           Designation
and Number.

     

    (a) Capital
Securities.  10,000 Capital Securities of Washington Preferred Capital
Trust (the “Trust”), with an aggregate liquidation amount with respect to the
assets of the Trust of TEN MILLION Dollars ($10,000,000) and a liquidation
amount with respect to the assets of the Trust of $1,000 per Capital Security,
are hereby designated for the purposes of identification only as the
“MMCapSSM” (the
“Capital Securities”).  The Capital Security Certificates evidencing
the Capital Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Capital Securities are listed, if
any.

     

    (b) Common
Securities.  310 Common Securities of the Trust (the “Common
Securities”) will be evidenced by Common Security Certificates substantially in
the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.  In the absence of an Event of Default, the Common
Securities will have an aggregate liquidation amount with respect to the assets
of the Trust of THREE HUNDRED TEN THOUSAND Dollars ($310,000) and a liquidation
amount with respect to the assets of the Trust of $1,000 per Common
Security.

     

    2. Distributions.  (a)  Distributions
payable on each Security will be payable at a rate of interest per annum, which,
with respect to any Distribution Period (as defined herein), will be equal to
LIBOR, as determined on the LIBOR Determination Date for such Distribution
Period (or, in the case of the first Distribution Period, will be 2.72750%),
plus 3.50% (the “Coupon Rate”); provided, however, that the
Coupon Rate for any Distribution Period may not exceed the Interest Rate (as
defined in the Indenture) for the related Interest Period (as defined in the
Indenture).  Distributions in arrears for more than one Distribution
Period will bear interest thereon, compounded quarterly, at the applicable
Coupon Rate for each Distribution Period thereafter (to the extent permitted by
applicable law).  The term “Distributions”, as used herein, includes
cash Distributions, any such compounded Distributions and any Additional Amounts
payable on the Debentures unless otherwise stated.  A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds legally available in the Property Account therefor.  The
amount of Distributions payable for any Distribution Period will be computed on
the basis of a 360-day year and the actual number of days elapsed in such
Distribution Period.

     

    
      
        A-I-1

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The term
“Distribution Period”, as used herein, means (i) in the case of the first
Distribution Period, the period from, and including, the date of original
issuance of the Securities to, but excluding, the initial Distribution Payment
Date and (ii) thereafter, from, and including, the first day following the end
of the preceding Distribution Period to, but excluding, the applicable
Distribution Payment Date or, in the case of the last Distribution Period, the
related date of redemption.

     

    (b) LIBOR
shall be determined by the Calculation Agent for each Distribution Period (other
than the first Distribution Period, in which case LIBOR will be 2.72750% per
annum) 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 Distribution Payment Date that
commences such Distribution Period (each such day, a “LIBOR Determination
Date”), LIBOR shall equal the rate, as obtained by the Calculation Agent, for
three-month U.S. Dollar deposits in Europe, which appears on Telerate (as
defined in the International Swaps and Derivatives Association, Inc. 2000
Interest Rate and Currency Exchange Definitions) page 3750 or such other page as
may replace such page 3750, as of 11:00 a.m. (London time) on such LIBOR
Determination Date, as reported by Bloomberg Financial Markets Commodities News
or any successor service (“Telerate Page 3750”).  “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 such LIBOR Determination Date, the corrected rate as so
substituted will be LIBOR for such LIBOR Determination Date.

     

    (2) If, on
such LIBOR Determination Date, such rate does not appear on Telerate Page 3750,
the Calculation Agent shall determine the arithmetic mean of the offered
quotations of the Reference Banks (as defined below) to leading banks in the
London interbank market for three-month U.S. Dollar deposits in Europe (in an
amount determined by the Calculation Agent) by reference to requests for
quotations as of approximately 11:00 a.m. (London time) on such LIBOR
Determination Date made by the Calculation Agent to the Reference
Banks.  If, on such LIBOR Determination Date, at least two of the
Reference Banks provide such quotations, LIBOR shall equal the arithmetic mean
of such quotations.  If, on such 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
such 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.

     

    
      
        A-I-2

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    (e) Distributions
on the Securities will be cumulative, will accrue from the date of original
issuance, and will be payable, subject to extension of Distribution Periods as
described herein, quarterly in arrears on March 15, June 15, September 15 and
December 15 of each year, commencing on June 15, 2008 (each, a “Distribution
Payment Date”), and on any earlier date of redemption, as
applicable.  The Debenture Issuer has the right under the Indenture to
defer payments of interest on the Debentures by extending the interest payment
period for up to 20 consecutive quarterly periods (each such extended interest
payment period, together with all previous and future consecutive extensions
thereof, is referred to herein as an “Extension Period”) at any time and from
time to time on the Debentures, subject to the conditions described below and in
the Indenture.  No Extension Period may end on a date other than a
Distribution Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be (each such
term as defined herein).  During any Extension Period, interest will
continue to accrue on the Debentures, and interest on such accrued interest
(such accrued interest and interest thereon referred to herein as “Deferred
Interest”) will accrue, at an annual rate equal to the Coupon Rate 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 applicable law.  At the end of any Extension
Period, the Debenture Issuer shall pay all Deferred Interest then accrued and
unpaid on the Debentures; provided, however, that during
any Extension Period, the Debenture Issuer may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Debenture Issuer’s capital
stock, (ii) make any payment of principal or premium or interest on or repay,
repurchase or redeem any debt securities of the Debenture Issuer that rank in
all respects pari passu
with or junior in interest to the Debentures or (iii) make any payment under any
guarantees of the Debenture Issuer that rank 

     

    
      
        A-I-3

      

      
        
        

        
          

        

      

      
        
        
in all
respects pari passu
with or junior in interest to the Guarantee (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Debenture
Issuer (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 Debenture Issuer (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 or conversion of any class or series of the Debenture
Issuer’s capital stock (or any capital stock of a subsidiary of the Debenture
Issuer) for any class or series of the Debenture Issuer’s capital stock or of
any class or series of the Debenture Issuer’s indebtedness for any class or
series of the Debenture Issuer’s capital stock, (c) the purchase of fractional
interests in shares of the Debenture Issuer’s capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with any
stockholder’s rights plan, or the issuance of rights, stock or other property
under any stockholder’s rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior in
interest to such stock).  Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such Extension Period, provided, that no
Extension Period (including all previous and further consecutive extensions that
are part of such Extension Period) shall exceed 20 consecutive quarterly
periods.  Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Debenture Issuer may commence a new
Extension Period, subject to the requirements herein and in the Indenture. No
interest or Deferred Interest (except any Additional Amounts that may be due and
payable) 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.

    

     

    As a
consequence of any Extension Period, Distributions will be
deferred.  Notwithstanding any such deferral, Distributions will
continue to accrue on the Securities, and Distributions on such accrued
Distributions will accrue, at the Coupon Rate applicable during such Extension
Period, compounded quarterly, to the extent permitted by applicable
law.  If Distributions are deferred, the Distributions due shall be
paid on the date that such Extension Period terminates to Holders of the
Securities as they appear on the books and records of the Trust on the regular
record date immediately preceding the Distribution Payment Date on which such
Extension Period terminates to the extent that the Trust has funds legally
available for the payment of such Distributions in the Property Account of the
Trust.

     

    The
Trust’s funds available for Distributions to the Holders of the Securities will
be limited to payments received from the Debenture Issuer.  The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.

     

    (f) Distributions
on the Securities on any Distribution Payment Date will be payable to the
Holders thereof as they appear on the books and records of the Registrar on the
relevant regular record dates.  The relevant “regular record dates”
shall be 15 days before the relevant Distribution Payment
Dates.  Distributions payable on any Securities that are not

     

    
      
        A-I-4

      

      
        
        

        
          

        

      

      
        
        
punctually
paid on any Distribution Payment Date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, as the case may be, when
due (taking into account any Extension Period), will cease to be payable to the
Person in whose name such Securities are registered on the original relevant
regular record date, and such defaulted Distributions will instead be payable to
the Person in whose name such Securities are registered on the regular record
date preceding the Distribution Payment Date on which the related Extension
Period terminates or, in the absence of an Extension Period, a special record
date therefor selected by the Administrators.

    

     

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

     

    (h) If any
Distribution Payment Date other than any date of redemption falls on a day that
is not a Business Day, then Distributions payable will be paid on, and such
Distribution Payment Date will be moved to, the next succeeding Business Day,
and additional Distributions will accrue for each day that such payment is
delayed as a result thereof.

     

    3. Liquidation Distribution
Upon Dissolution.  In the event of the voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Trust (each, a
“Liquidation”), the Holders of the Securities will be entitled to receive out of
the assets of the Trust legally available for distribution to Holders of the
Securities, after satisfaction of liabilities to creditors of the Trust (to the
extent not satisfied by the Debenture Issuer), an amount in cash equal to the
aggregate of the liquidation amount of $1,000 per Security plus unpaid
Distributions accrued thereon to the date of payment (collectively, the
“Liquidation Distribution”), unless: (i) the Debentures have been redeemed in
full in accordance with the terms thereof and of the Indenture; or (ii) the
Debentures in an aggregate principal amount equal to the aggregate liquidation
amount of such Securities and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid Distributions on such Securities, after paying
or making reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Statutory Trust Act, shall be distributed
on a Pro Rata basis to the Holders of the Securities in exchange for such
Securities.

     

    The
Sponsor, as the Holder of all of the Common Securities, has the right at any
time, upon receipt by the Debenture Issuer and the Institutional Trustee for the
benefit of the Trust of (i) an opinion of nationally recognized tax counsel
that Holders will not recognize any gain or loss for United States Federal
income tax purposes as a result of the distribution of Debentures, to dissolve
the Trust (including, without limitation, upon the occurrence of a Tax Event, an
Investment Company Event or a Capital Treatment Event, each as defined herein)
and (ii) prior approval from the Board of Governors of the Federal Reserve
System (the “Federal Reserve”) (if then required under applicable capital
guidelines or policies of the Federal Reserve) and, after satisfaction of
liabilities to creditors of the Trust, cause the Debentures to be distributed to
the Holders of the Securities on a Pro Rata basis in accordance with the
aggregate liquidation amount thereof.

     

    The Trust
shall dissolve on the first to occur of (i) June 15, 2043, the expiration of the
term of the Trust, (ii) a Bankruptcy Event with respect to the Sponsor, the
Trust or the 

     

    
      
        A-I-5

      

      
        
        

        
          

        

      

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

    

     

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

     

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

     

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

     

    After the
date for any distribution of the Debentures upon any Liquidation of the Trust,
(i) the Securities of the Trust will be deemed to be no longer outstanding, (ii)
any certificates representing the Capital Securities will be deemed to represent
undivided beneficial interests in such of the Debentures as have an aggregate
principal amount equal to the aggregate 

    
      
        A-I-6

      

      
        
        

        
          

        

      

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

    

     

    4. Redemption and
Distribution.

     

    (a) The
Debentures will mature on June 15, 2038 (the “Maturity Date”) at an amount in
cash equal to 100% of the principal amount thereof plus unpaid interest accrued
thereon to such date (the “Maturity Redemption Price”).  The
Debentures may be redeemed by the Debenture Issuer, at its option, in whole or
in part, on any Distribution Payment Date on or after June 15, 2013 (each, an
“Optional Redemption Date”), at the Optional Redemption Price, upon not less
than 30 nor more than 60 days’ prior written notice to holders of such
Debentures.  In addition, upon the occurrence and continuation of a
Tax Event, an Investment Company Event or a Capital Treatment Event, the
Debentures may be redeemed by the Debenture Issuer, at its option, in whole but
not in part, at any time within 90 days following the occurrence of such Tax
Event, Investment Company Event or Capital Treatment Event, as the case may be
(the “Special Redemption Date”), at the Special Redemption Price, upon not less
than 30 nor more than 60 days’ prior written notice to holders of the Debentures
so long as such Tax Event, Investment Company Event or Capital Treatment Event,
as the case may be, is continuing.  In each case, the right of the
Debenture Issuer to redeem the Debentures prior to maturity is subject to the
Debenture Issuer and the Trust having received prior approval from the Federal
Reserve, if then required under applicable capital guidelines or policies of the
Federal Reserve.

     

    “Tax
Event” means the receipt by the Debenture Issuer and the Trust of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to or change (including any announced prospective change) in the laws
or any regulations thereunder of the United States or any political subdivision
or taxing authority thereof or therein, or as a result of any official
administrative pronouncement (including any private letter ruling, technical
advice memorandum, regulatory procedure, notice or announcement) (an
“Administrative Action”) or judicial decision interpreting or applying such laws
or regulations, regardless of whether such Administrative Action or judicial
decision is issued to or in connection with a proceeding involving the Debenture
Issuer or the Trust and whether or not subject to review or appeal, which
amendment, clarification, change, Administrative Action or decision is enacted,
promulgated or announced, in each case on or after the date of original issuance
of the Debentures, there is more than an insubstantial risk that: (i) the Trust
is, or will be within 90 days of the date of such opinion, subject to United
States federal income tax with respect to income received or accrued on the
Debentures; (ii) if the Debenture Issuer is organized and existing under the
laws of the United States or any state thereof or the District of Columbia,
interest payable by the Debenture Issuer on the Debentures is not, or within 90
days of the date of such opinion, will not be, deductible by the Debenture
Issuer, in whole or in part, for United States federal income tax purposes; or
(iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to or otherwise required to pay, or required to withhold from
Distributions, 

     

    
      
        A-I-7

      

      
        
        

        
          

        

      

      
        
        
more than
a de minimis amount of other taxes (including withholding taxes), duties,
assessments or other governmental charges.

    

     

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

     

    “Capital
Treatment Event” means, if the Debenture Issuer is organized and existing under
the laws of the United States or any state thereof or the District of Columbia,
the receipt by the Debenture Issuer and the Trust of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change in, the laws, rules or regulations of the United States or any
political subdivision thereof or therein, or as the result of any official or
administrative pronouncement or action or decision interpreting or applying such
laws, rules or regulations, which amendment or change is effective or which
pronouncement, action or decision is announced on or after the date of original
issuance of the Debentures, there is more than an insubstantial risk that the
Debenture Issuer will not, within 90 days of the date of such opinion, be
entitled to treat Capital Securities as “Tier 1 Capital” (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal Reserve
(or any successor regulatory authority with jurisdiction over bank holding
companies), as then in effect and applicable to the Debenture Issuer; provided,
however, that the inability of the Debenture Issuer to treat all or any portion
of the aggregate 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 Debenture Issuer having preferred stock, minority
interests in consolidated subsidiaries and any other class of security or
interest which the Federal Reserve (or any successor regulatory authority with
jurisdiction over bank holding companies) may now or hereafter accord “Tier 1
Capital” treatment that, in the aggregate, exceed the amount which may now or
hereafter qualify for treatment as “Tier 1 Capital” under applicable capital
adequacy guidelines of the Federal Reserve (or any successor regulatory
authority with jurisdiction over bank holding companies); provided, further,
however, that the distribution of the Debentures in connection with the
Liquidation of the Trust by the Debenture Issuer shall not in and of itself
constitute a Capital Treatment Event unless such Liquidation shall have occurred
in connection with a Tax Event or an Investment Company Event.  For
the avoidance of doubt, the inability of the Debenture Issuer to treat all or
any portion of the aggregate Liquidation Amount of the Capital Securities as
“Tier 1 Capital” as a result of the changes effected by the final rule adopted
by the Federal Reserve on March 1, 2005 shall not constitute the basis for a
Capital Treatment Event.

     

    “Optional
Redemption Price” means an amount in cash equal to 100% of the principal amount
of the Debentures being redeemed plus unpaid interest accrued on such Debentures
to the related Optional Redemption Date.

     

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

     

    
      
        A-I-8

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Special
Redemption Price” means, with respect to the redemption of the Debentures
following a Special Event, an amount in cash equal to 103.10% of the principal
amount of Debentures to be redeemed prior to June 15, 2009 and thereafter equal
to the percentage of the principal amount of the Debentures 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 June
      15,

            	
              Percentage of
      Principal Amount

            
	
              2009

            	
              102.48%

            
	
              2010

            	
              101.86%

            
	
              2011

            	
              101.24%

            
	
              2012

            	
              100.62%

            
	
              2013
      and thereafter

            	
              100.00%

            

    

    

     

    (b) Upon any
repayment of the Debentures at maturity or in whole or in part upon redemption
(other than following the distribution of the Debentures to the Holders of the
Securities), the proceeds from such repayment shall concurrently be applied to
redeem Pro Rata, at a redemption price corresponding to the applicable Maturity
Redemption Price, Optional Redemption Price or Special Redemption Price for the
Debentures, as the case may be, Securities having an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so repaid;
provided, however, that Holders
of such Securities shall be given not less than 30 nor more than 60 days’ prior
written notice of such redemption (other than a redemption resulting from the
maturity of the Debentures on the Maturity Date).

     

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

     

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

     

    (e) Redemption
or Distribution Procedures.

     

    (i) Written
notice of any redemption of, or written notice of distribution of the Debentures
in exchange for, the Securities (a “Redemption/Distribution Notice”) will be
given by the Trust by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the date of redemption
or exchange thereof which, in the case of a redemption, will be the date of
redemption of the Debentures.  For purposes of the calculation of the
date of redemption or exchange and the dates on which notices are given pursuant
to this Section 

     

    
      
        A-I-9

      

      
        
        

        
          

        

      

      
        
        

      

       

      4(e)(i),
a Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of such
Securities.  Each Redemption/Distribution Notice shall be addressed to
the Holders of such Securities at the address of each such Holder appearing on
the books and records of the Registrar.  No defect in the
Redemption/Distribution Notice or in the mailing thereof with respect to any
Holder shall affect the validity of the redemption or exchange proceedings with
respect to any other Holder.

    

     

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

     

    (iii) If the
Securities are to be redeemed and the Trust gives a Redemption/Distribution
Notice, which notice may only be issued if the Debentures are redeemed or repaid
as set out in this Section (which notice will be irrevocable), then, provided, that the
Institutional Trustee has a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Institutional Trustee
will, with respect to Book-Entry Capital Securities, irrevocably deposit with
the Depositary for such Book-Entry Capital Securities, the price payable upon
redemption of the Securities, and will give such Depositary irrevocable
instructions and authority to pay the price payable upon redemption of such
Book-Entry Capital Securities to Beneficial Owners of the Capital
Securities.  With respect to Capital Securities that are not
Book-Entry Capital Securities, the Institutional Trustee will pay the price
payable upon redemption of such Securities to the Holders of such Securities by
check mailed to the address of each such Holder appearing on the books and
records of the Trust on the related date of redemption.  If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, then immediately prior to the close of business on the date of such
deposit, Distributions will cease to accrue on the Securities so subject to
redemption and all rights of Holders of such Securities so subject to redemption
will cease, except the right of the Holders of such Securities to receive the
applicable price specified in Section 4(a), but without interest on such
price.  If any date of redemption of the Securities falls on a day
that is not a Business Day, then payment of all amounts payable on such date
will be made on the next succeeding Business Day, and no additional
Distributions will accrue in respect of such payment on such next succeeding
Business Day.  If any amount payable upon redemption of the Securities
is improperly withheld or refused and not paid either by the Trust, the
Debenture Issuer or the Sponsor as guarantor pursuant to the Guarantee,
Distributions on such Securities will continue to accrue at the Coupon Rate
applicable from the date of redemption to the actual date of payment, in which
case the actual payment date will be considered the date of redemption for
purposes of calculating the price payable upon redemption of the
Securities.   In the event of any redemption of the Capital
Securities issued by the Trust in part, the Trust shall not be required to (i)
issue, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before any selection for redemption
of the Capital Securities and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all Holders of the Capital Securities to be so redeemed or (ii) register the
transfer of or exchange any Capital Securities so selected for 

     

    
      
        A-I-10

      

      
        
        

        
          

        

      

      
        
        

      

       

      redemption,
in whole or in part, except for the unredeemed portion of any Capital Securities
being redeemed in part.

    

     

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

     

    (v) Subject
to the foregoing and applicable law (including, without limitation, United
States federal securities laws), the Sponsor or any of its Affiliates may at any
time and from time to time purchase outstanding Capital Securities by tender, in
the open market or by private agreement.

     

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

     

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

     

    
      
        A-I-11

      

      
        
        

        
          

        

      

      
        
        
of the
principal of or premium, if any, or interest on the Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of the
Capital Securities of such Holder.  The Institutional Trustee shall
notify all Holders of the Capital Securities of any default actually known to
the Institutional Trustee with respect to the Debentures unless (x) such default
has been cured prior to the giving of such notice or (y) the Institutional
Trustee determines in good faith that the withholding of such notice is in the
interest of the Holders of such Capital Securities, except where the default
relates to the payment of principal of or interest on any of the
Debentures.  Such notice shall state that such Indenture Event of
Default also constitutes an Event of Default hereunder.  Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy, the Institutional Trustee shall not take any of the actions described in
clause (i), (ii), (iii) or (iv) above unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that, as a result of such
action, the Trust will not be classified as other than a grantor trust for
United States federal income tax purposes.

    

     

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

     

    Notwithstanding
that Holders of the Capital Securities are entitled to vote or consent under any
of the circumstances described above, any of the Capital Securities that are
owned by the Sponsor or any Affiliate of the Sponsor shall not entitle the
Holder thereof to vote or consent and shall, for purposes of such vote or
consent, be treated as if such Capital Securities were not outstanding;
provided, however, that at any time when all the outstanding Capital Securities
are owned by the Sponsor or any Affiliate of the Sponsor, such Capital
Securities shall be treated as outstanding and shall entitle the Sponsor or such
Affiliate to such vote or consent; and provided further that any Capital
Securities owned by the Sponsor or any Affiliate of the Sponsor that have been
pledged in good faith may be treated as outstanding if the pledgee establishes
to the satisfaction of the Administrators the pledgee’s right so to act with
respect to such Capital Securities and that the pledgee is not the Sponsor or an
Affiliate of the Sponsor.

     

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

     

    
      
        A-I-12

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (c) Subject
to Section 6.8 of the Declaration and only after each Event of Default (if any)
with respect to the Capital Securities has been cured, waived or otherwise
eliminated and subject to the requirements of the second to last sentence of
this paragraph, the Holder of the Common Securities, voting separately as a
class, may direct the time, method, and place of conducting any proceeding for
any remedy available to the Institutional Trustee, or exercising any trust or
power conferred upon the Institutional Trustee under the Declaration, including
(i) directing the time, method, place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waiving
any past default and its consequences that are waivable under the Indenture, or
(iii) exercising any right to rescind or annul an acceleration of the principal
of all the Debentures.  Notwithstanding this Section 6(c), the
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote or consent of the Holders of the Capital
Securities.  Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action described in clause (i), (ii) or (iii) above, unless
the Institutional Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such
action.  If the Institutional Trustee fails to enforce its rights
under the Declaration, to the fullest extent permitted by law, the Holder of the
Common Securities may institute a legal proceeding directly against any Person
to enforce the Institutional Trustee’s rights under the Declaration, without
first instituting a legal proceeding against the Institutional Trustee or any
other Person.

     

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

     

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

     

    7. Amendments to Declaration
and Indenture.  In addition to any requirements under Section
11.1 of the Declaration, if any proposed amendment to the 

     

    
      
        A-I-13

      

      
        
        

        
          

        

      

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

    

     

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

     

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

     

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

     

    8. Pro
Rata.  A reference in these terms of the Securities to any
payment, distribution or treatment as being “Pro Rata” shall mean pro rata to
each Holder of the Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Capital Securities Pro Rata according to the aggregate liquidation amount of the
Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and 

     

    
      
        A-I-14

      

      
        
        

        
          

        

      

      
        
        
only
after satisfaction of all amounts owed to the Holders of the Capital Securities,
to each Holder of the Common Securities Pro Rata according to the aggregate
liquidation amount of the Common Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Common Securities
outstanding.

    

     

    9. Ranking.  The
Capital Securities rank pari
passu with, and payment thereon shall be made Pro Rata with, the Common
Securities except that, where an Event of Default has occurred and is
continuing, the rights of Holders of the Common Securities to receive payment of
Distributions and payments upon Liquidation, redemption and otherwise are
subordinated to the rights of the Holders of the Capital Securities with the
result that no payment of any Distribution on, or any amount payable upon the
redemption of, any Common Security, and no payment to the Holder of any Common
Security on account of the Liquidation of the Trust, shall be made unless
payment in full in cash of (i) all accrued and unpaid Distributions on all
outstanding Capital Securities for all Distribution Periods terminating on or
prior thereto, (ii) all amounts payable upon Capital Securities then subject to
redemption and (iii) all amounts payable upon Capital Securities in the event of
the Liquidation of the Trust, in each case, shall have been made or provided
for, and all funds immediately available to the Institutional Trustee shall
first be applied to the payment in full in cash of the amounts specified in
clause (i), (ii) and (iii) above that are then due and payable.

     

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

     

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

     

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

     

    
      
        A-I-15

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A-1

     

    FORM
OF CAPITAL SECURITY CERTIFICATE

     

    [FORM OF
FACE OF SECURITY]

     

    [THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(“DTC”) OR A NOMINEE OF DTC.  THIS SECURITY IS EXCHANGEABLE FOR
CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO
TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN THE CIRCUMSTANCES SPECIFIED IN THE
DECLARATION.

     

    UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO 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.]1

     

    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 OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i)
ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF
AND (Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN
RULE 405 UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY
OR SUCH 

    
 

    
                                                           

    1 Only
applicable if this Capital Security is a Global Capital Security.

     

     

    
      
        A-1-1

      

      
        
        

        
          

        

      

      
        
        
INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
DEBENTURE ISSUER OR ITS SUBSIDIARY OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS
A “QUALIFIED INSTITUTIONAL BUYER,” AS DEFINED IN RULE 144A, THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
(3), (7) OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY OR SUCH INTEREST OR PARTICIPATION 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, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES
ACT, (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, SUBJECT TO THE RIGHT OF THE DEBENTURE ISSUER AND THE TRUST PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUER
OR THE TRUST.  THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

    

     

    THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION HEREIN, 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 OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406
OF ERISA 

     

    
      
        A-1-2

      

      
        
        

        
          

        

      

      
        
        
OR
SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING.  ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

    

     

    IN
CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE
REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

     

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

     

    
      
        A-1-3

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
Certificate
Number                                           [_____]                                           Number
of Capital Securities  [_____]

     

    CUSIP NO
[           ]

     

    Certificate
Evidencing Capital Securities

     

    of

     

    WASHINGTON
PREFERRED CAPITAL TRUST

     

    Capital
Securities

     

    (liquidation
amount $1,000 per Capital Security)

     

    Washington
Preferred Capital Trust, a statutory trust created under the laws of the State
of Delaware (the “Trust”), hereby certifies that
[                                            ]
is the registered owner (the “Holder”) of
[                  ]
capital securities of the Trust representing undivided beneficial interests in
the assets of the Trust, designated as MMCapSSM
(liquidation amount $1,000 per Capital Security) (the “Capital
Securities”).  Subject to the Declaration (as defined below), the
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this Certificate duly
endorsed and in proper form for transfer.  The Capital Securities
represented hereby are issued pursuant to, and the designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities shall in all respects be subject to, the provisions of the
Amended and Restated Declaration of Trust of the Trust, dated as of April 7,
2008, among David V. Devault, John F. Treanor and Mark K. W. Gim, as
Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional Trustee, Washington Trust Bancorp, Inc., as Sponsor,
and the holders from time to time of undivided beneficial interests in the
assets of the Trust, including the designation of the terms of the Capital
Securities as set forth in Annex I to the Declaration, as the same may be
amended from time to time (the “Declaration”). Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration.  The
Holder is entitled to the benefits of the Guarantee and the Indenture to the
extent provided therein.  The Sponsor will provide a copy of the
Declaration, the Guarantee, and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business.

     

    The
aggregate liquidation amount of the Capital Securities represented by this
Global Capital Security may from time to time be reduced to reflect transfers or
redemptions of all or a portion of such Capital Securities or cancellations of
all or a portion of such Capital Securities, in each case, and in any such case,
by means of notations on the Global Certificate Transfer Schedule on the last
page hereof. Notwithstanding any provisions of this Global Capital Security to
the contrary, transfers or redemptions of all or a portion of the Capital
Securities represented hereby and cancellations of all or a portion of the
Capital Securities represented hereby, may be effected without the surrendering
of this Global Capital Security, provided the appropriate notations on the
Global Certificate Transfer Schedule are made by the Institutional Trustee or
the Depositary at the direction of the Institutional Trustee, to reflect the
appropriate reduction or increase, as the case may be, in the aggregate
liquidation amount of the Capital Securities evidenced by this Global Capital
Security.

     

    
      
        A-1-4

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

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

     

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

     

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

     

    This
Certificate may contain more than one counterpart of the signature page and this
Certificate may be executed and authenticated by the affixing of the signature
of an Administrator on behalf of the Trust, and the signature of the
Institutional Trustee providing authentication, to any of such counterpart
signature pages.  All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though the
Trust had executed, and the Institutional Trustee had authenticated, a single
signature page.

     

    
      
        
          A-1-5

        

         

      

      
         

        
          

        

      

      
         

      

    

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

     

    
      	
               
      

            	
              WASHINGTON
      PREFERRED CAPITAL TRUST

            

    

     

    
      	
               
      

            	
              By:________________________________

            

    

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:
      Administrator

            

    

     

    
      	
               
      

            	
              Dated:
      ___________________________

            

    

     

    CERTIFICATE
OF AUTHENTICATION

     

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

     

    
      	
               
      

            	
              WILMINGTON
      TRUST COMPANY,

            
	 	not
      in its individual capacity but solely as the Institutional
    Trustee

    

     

     

    
      	
               
      

            	
              By:_______________________________

            

    

    
      	
               
      

            	
              Authorized
      Officer

            

    

     

    
      	
               
      

            	
              Dated:
      ___________________________

            

    

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
          A-1-6

        

         

      

      
         

        
          

        

      

      
         

      

    

    [FORM OF
REVERSE OF SECURITY]

     

    Distributions
payable on each Capital Security will be payable at a rate of interest per
annum, which, with respect to any Distribution Period, will be equal to LIBOR,
as determined on the LIBOR Determination Date for such Distribution Period (or,
in the case of the first Distribution Period, will be 2.72750%), plus 3.50% (the
“Coupon Rate”); provided, however, that the
Coupon Rate for any Distribution Period may not exceed the Interest Rate (as
defined in the Indenture) for the related Interest Period (as defined in the
Indenture).  Distributions in arrears for more than one Distribution
Period will bear interest thereon, compounded quarterly, at the applicable
Coupon Rate for each Distribution Period thereafter (to the extent permitted by
applicable law).  The term “Distributions”, as used herein, includes
cash Distributions, any such compounded Distributions and any Additional Amounts
payable on the Debentures, unless otherwise stated.  A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds legally available in the Property Account therefor.  The
amount of Distributions payable for any Distribution Period will be computed on
the basis of a 360-day year and the actual number of days elapsed in such
Distribution Period.

     

    Except as
otherwise described below, Distributions on the Capital Securities will be
cumulative, will accrue from the date of original issuance and will be payable
quarterly in arrears on March 15, June 15, September 15, and December 15 of each
year, commencing on June 15, 2008 (each, a “Distribution Payment Date”), and on
any earlier date of redemption, subject, in each case, to the Business Day
convention specified in the Declaration.  The Debenture Issuer has the
right under the Indenture to defer payments of interest on the Debentures by
extending the interest payment period for up to 20 consecutive quarterly periods
(each such extended interest payment period, together with all previous and
future consecutive extensions thereof, is referred to herein as an “Extension
Period”) at any time and from time to time on the Debentures, subject to the
conditions described below and in the Declaration and the
Indenture.  No Extension Period may end on a date other than a
Distribution Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may
be.  During any Extension Period, interest will continue to accrue on
the Debentures, and interest on such accrued interest (such accrued interest and
interest thereon referred to herein as “Deferred Interest”) will accrue, at an
annual rate equal to the Coupon Rate 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
applicable law.  At the end of any Extension Period, the Debenture
Issuer shall pay all Deferred Interest then accrued and unpaid on the
Debentures; provided, however, that prior
to the termination of any Extension Period, the Debenture Issuer may further
extend such Extension Period, provided, that no
Extension Period (including all previous and further consecutive extensions that
are part of such Extension Period) shall exceed 20 consecutive quarterly
periods.  Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Debenture Issuer may commence a new
Extension Period, subject to the requirements set forth herein and in the
Declaration and the Indenture.  No interest or Deferred Interest
(except any Additional Amounts that may be due and payable) 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.

     

    
      
        A-1-7

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    As a
consequence of any Extension Period, Distributions will be
deferred.  If Distributions are deferred, the Distributions due shall
be paid on the date that the related Extension Period terminates to Holders of
the Capital Securities as they appear on the books and records of the Trust on
the regular record date immediately preceding the Distribution Payment Date on
which such Extension Period terminates to the extent that the Trust has funds
legally available for the payment of such Distributions in the Property Account
of the Trust.

     

    The
Capital Securities shall be redeemable, and shall be entitled to the Liquidation
Distribution, as provided in the Declaration.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          A-1-8

        

         

      

      
         

        
          

        

      

      
         

      

    

    ASSIGNMENT

     

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

     

    ____________________________

     

    ____________________________

     

    ____________________________

     

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

     

    ____________________________

     

    ____________________________

     

    ____________________________

     

    (Insert
address and zip code of assignee),

     

    and
irrevocably appoints
________________________________________________________

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

     

    Date:__________________

     

    Signature:__________________

     

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

     

    Signature
Guarantee:1 ____________________________

     

    

      

    

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

    

    
      
        
          A-1-9

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    Schedule
A

     

     

    Global
Certificate Transfer Schedule

     

     

    Changes
to Liquidation Amount of Global Capital Security

     

    

    
      	 
      

              Date

            	
               

            	 
      Liquidation
      Amount of Capital Securities by which this Global Capital Security Is to
      Be Reduced or Increased	
              
                 

              

            	
              
                Remaining
      Liquidation Amount of the Global Capital Security (following decrease or
      increase)

              

            

    

     

    Schedule
to be maintained by Institutional Trustee or Depositary in cooperation with
Institutional Trustee, as applicable.

     

    
      
        
          A-1-10

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
A-2

     

    FORM OF
COMMON SECURITY CERTIFICATE

     

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

     

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

     

    
      
        
          A-2-1

        

         

      

      
         

        
          

        

      

      
         

      

    

    Certificate
Number                                           [_____]                                Number
of Common Securities [____]

     

    Certificate
Evidencing Common Securities

     

    of

     

    WASHINGTON
PREFERRED CAPITAL TRUST

     

    Washington
Preferred Capital Trust, a statutory trust created under the laws of the State
of Delaware (the “Trust”), hereby certifies that Washington Trust Bancorp, Inc.
is the registered owner (the “Holder”) of 310 common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
(liquidation amount $1,000 per Common Security) (the “Common
Securities”).  The Common Securities represented hereby are issued
pursuant to, and the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities shall in all respects be
subject to, the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of April 7, 2008, among David V. Devault, John F. Treanor
and Mark K. W. Gim, as Administrators, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Institutional Trustee, the Holder, as
Sponsor, and the holders from time to time of undivided beneficial interests in
the assets of the Trust, including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration, as the same may be
amended from time to time (the “Declaration”).  Capitalized terms used
herein but not defined shall have the meaning given them in the
Declaration.  The Sponsor will provide a copy of the Declaration and
the Indenture to the Holder without charge upon written request to the Sponsor
at its principal place of business.

     

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

     

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

     

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

     

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

     

    
      
        
          A-2-2

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Trust has executed this Certificate this ___ day of ____,
2008.

     

    
      	
               
      

            	
              WASHINGTON
      PREFERRED CAPITAL TRUST

            

    

     

    
      	
               
      

            	
              By:______________________________

            

    

     

    
      	
               
      

            	
              Name:

            

    

    
      	
               
      

            	
              Title:
      Administrator

            

    

     

    
      
        
          A-2-3

        

         

      

      
         

        
          

        

      

      
         

      

    

    [FORM OF
REVERSE OF SECURITY]

     

    Distributions
payable on each Common Security will be identical in amount to the Distributions
payable on each Capital Security, which is at a rate of interest per annum,
which, with respect to any Distribution Period (as defined herein), will be
equal to LIBOR, as determined on the LIBOR Determination Date for such
Distribution Period (or, in the case of the first Distribution Period, will be
2.72750%), plus 3.50% (the “Coupon Rate”); provided, however, that the
Coupon Rate for any Distribution Period may not exceed the Interest Rate (as
defined in the Indenture) for the related Interest Period (as defined in the
Indenture).  Distributions in arrears for more than one Distribution
Period will bear interest thereon, compounded quarterly, at the applicable
Coupon Rate for each Distribution Period thereafter (to the extent permitted by
applicable law).  The term “Distributions”, as used herein, includes
cash Distributions, any such compounded Distributions and any Additional Amounts
payable on the Debentures, unless otherwise stated.  A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds legally available in the Property Account therefor.  The
amount of Distributions payable for any Distribution Period will be computed on
the basis of a 360-day year and the actual number of days elapsed in such
Distribution Period.

     

    Except as
otherwise described below, Distributions on the Common Securities will be
cumulative, will accrue from the date of original issuance and will be payable
quarterly in arrears on March 15, June 15, September 15, and December 15 of each
year, commencing on June 15, 2008 (each, a “Distribution Payment Date”), and on
any earlier date of redemption, subject, in each case, to the Business Day
convention specified in the Declaration.  The Debenture Issuer has the
right under the Indenture to defer payments of interest on the Debentures by
extending the interest payment period for up to 20 consecutive quarterly periods
(each such extended interest payment period, together with all previous and
future consecutive extensions thereof, is referred to herein as an “Extension
Period”) at any time and from time to time on the Debentures, subject to the
conditions described below and in the Declaration and the
Indenture.  No Extension Period may end on a date other than a
Distribution Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may
be.  During any Extension Period, interest will continue to accrue on
the Debentures, and interest on such accrued interest (such accrued interest and
interest thereon referred to herein as “Deferred Interest”) will accrue, at an
annual rate equal to the Coupon Rate 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
applicable law.  At the end of any Extension Period, the Debenture
Issuer shall pay all Deferred Interest then accrued and unpaid on the
Debentures; provided, however, that prior
to the termination of any Extension Period, the Debenture Issuer may further
extend such Extension Period, provided, that no
Extension Period (including all previous and further consecutive extensions that
are part of such Extension Period) shall exceed 20 consecutive quarterly
periods.  Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Debenture Issuer may commence a new
Extension Period, subject to the requirements set forth herein and in the
Declaration and the Indenture.  No interest or Deferred Interest
(except any Additional Amounts that may be due and payable) shall be due and
payable during an Extension Period, except at the end thereof, but Deferred
Interest shall accrue upon each installment of 

     

    
      
        A-2-4

      

      
        
        

        
          

        

      

      
        
        
interest
that would otherwise have been due and payable during such Extension Period
until such installment is paid.

    

     

    As a
consequence of any Extension Period, Distributions will be
deferred.  If Distributions are deferred, the Distributions due shall
be paid on the date that the related Extension Period terminates to Holders of
the Securities as they appear on the books and records of the Trust on the
regular record date immediately preceding the Distribution Payment Date on which
such Extension Period terminates to the extent that the Trust has funds legally
available for the payment of such Distributions in the Property Account of the
Trust.

     

    The
Common Securities shall be redeemable, and shall be entitled to the Liquidation
Distribution, as provided in the Declaration.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          A-2-5

        

         

      

      
         

        
          

        

      

      
         

      

    

    ASSIGNMENT

     

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

     

    ____________________________

     

    ____________________________

     

    ____________________________

     

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

     

    ____________________________

     

    ____________________________

     

    ____________________________

     

    (Insert
address and zip code of assignee),

     

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

     

    Date:____________________

     

    Signature:________________________

     

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

     

    Signature
Guarantee:1 ________________________

     

    

      

    

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

    

    
      
        
          A-2-6

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    FORM OF
ADMINISTRATOR’S CERTIFICATE

    OF THE
TRUST

     

    Pursuant
to Section 2.6(a)(i)(P) of the Amended and Restated Declaration of Trust, dated
as of April 7, 2008 (as amended or supplemented from time to time, the “Trust
Agreement”), of Washington Preferred Capital Trust (the “Trust”) among
Washington Trust Bancorp, Inc. as Sponsor, Wilmington Trust Company, as
Institutional Trustee, Wilmington Trust Company, as Delaware Trustee, the
Administrators named therein, and the holders from time to time of beneficial
interests in the assets of the Trust, the undersigned (on behalf of the Trust)
hereby certifies that he/she is an Administrator of the Trust and that, to
his/her knowledge under the terms of the Trust Agreement, the Trust has complied
(without regard to any period of grace or requirement of notice provided under
the Trust Agreement) with all conditions and covenants under the Trust Agreement
for the year 20__.

     

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

     

    IN
WITNESS WHEREOF, the undersigned has executed this Administrator’s Certificate
as of ___________, 20___.

     

    

     

     

                                                

    Name:

    Title:

     

    

    
      
        
          B-1

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    FORM OF
TRANSFEREE CERTIFICATE

     

    TO BE
EXECUTED BY ACCREDITED INVESTORS

     

    __________,
[     ]

     

    Washington
Trust Bancorp, Inc.

    Washington
Preferred Capital Trust

    23 Broad
Street

    Westerly,
Rhode Island 02891

     

    
      	
              Re:

            	
              Purchase
      of $[SPECIFY] liquidation amount of MMCapSSM

            
	 	(the “Capital
      Securities”) of Washington Preferred Capital Trust (the
      “Trust”)

    

     

    Ladies
and Gentlemen:

     

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

     

    1.           We
understand that the Capital Securities of the Trust have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), and may not
be offered or sold except as permitted in the following sentence. We agree on
our own behalf and on behalf of any investor account for which we are purchasing
the Capital Securities that, if we decide to offer, sell or otherwise transfer
any such Capital Securities prior to the date which is the later of (i) one year
(or such shorter period of time as permitted by Rule 144 under the Securities
Act) after the later of (Y) the date of original issuance of the Capital
Securities and (Z) the last date on which the Trust or any Affiliate (as defined
in Rule 405 under the Securities Act) of the Trust was the holder of any such
Capital Securities (or any predecessor thereto) and (ii) such later date, if
any, as may be required by any subsequent change in applicable law (the “Resale
Restriction Termination Date”), then such offer, sale or other transfer will be
made only (a) to the Company or the Trust, (b) pursuant to Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a “QIB”), that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (c) pursuant to an exemption from registration, to an
“accredited investor” within the meaning of subparagraph (a) (1), (2), (3), (7)
or (8) of Rule 501 under the Securities Act that is acquiring any such Capital
Securities for its own account or for the account of such an accredited investor
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act,
(d) pursuant to offers and sales to a non-U.S. Person that occur outside the
United States pursuant to Regulation S under the Securities Act, or (e) pursuant
to another available exemption from the registration requirements of the
Securities Act, and in each of the foregoing cases in accordance with any
applicable state securities laws and any requirements of law that govern the
disposition of our property.  If any resale or other transfer of the
Capital Securities is proposed to be made pursuant to clause (c) above, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Institutional Trustee as Transfer Agent, which shall
provide as applicable, among other things, that the transferee is an accredited
investor within the meaning of subparagraph (a)(1), (2), (3), (7) or (8) of Rule
501 under the Securities Act that is acquiring 

     

    
      
        C-1

      

      
        
        

        
          

        

      

      
        
        
such
Capital Securities for investment purposes and not for any distribution in
violation of the Securities Act. We acknowledge on our behalf and on behalf of
any investor account for which we are purchasing Capital Securities that the
Company and the Trust reserve the right prior to any offer, sale or other
transfer pursuant to clause (c) or (e) to require the delivery of any opinion of
counsel, certifications and/or other information satisfactory to Washington
Trust Bancorp, Inc.  (the “Company”) and the Trust.  We
understand that the certificates for any Capital Securities that we receive
prior to the Resale Restriction Termination Date will bear a legend
substantially to the effect of the foregoing.

    

     

    2.           We
are an accredited investor within the meaning of subparagraph (a) (1), (2), (3),
(7) or (8) of Rule 501 under the Securities Act purchasing for our own account
or for the account of such an accredited investor, and we are acquiring the
Capital Securities for investment purposes and not with view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act,
and we have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the
Capital Securities, and we and any account for which we are acting are each able
to bear the economic risks of our or its investment.

     

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

     

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

     

    5.           We
acknowledge that we either (A) are not a fiduciary of a pension, profit-sharing
or other employee benefit plan or arrangement subject to the Employee Retirement
Income Security Act of 1974, as amended, or to Section 4975 of the Internal
Revenue Code of 1986, as amended (a “Plan”), or an entity whose assets include
“plan assets” by reason of any Plan’s investment in the entity and are not
purchasing the Capital Securities on behalf of or with “plan assets” by reason
of any Plan’s investment in the entity and are not purchasing the Capital
Securities on behalf of or with “plan assets” of any Plan or (B) are eligible
for the exemptive relief available under one or more of the following prohibited
transaction class exemptions (“PTCEs”) issued by the U.S. Department of
Labor:  PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.

     

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

     

    7.           We
acknowledge that the Company, the Trust and others will rely upon the truth and
accuracy of the foregoing acknowledgments, representations, warranties and
agreements and agree that if any of our acknowledgments, representations,
warranties and agreements are no longer accurate, we shall promptly notify the
applicable Purchaser. If we are 

     

    
      
        C-2

      

      
        
        

        
          

        

      

      
        
        
acquiring
any Capital Securities as a fiduciary or agent for one or more investor
accounts, we represent that we have sole discretion with respect to each such
investor account and that we have full power to make the foregoing
acknowledgments, representations and agreements on behalf of each such investor
account.

    

     

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

     

    

     

    

     

    __________________________________

     

    (Name of
Purchaser)

     

    
      	
               
      

            	
              By:_______________________________

            

    

     

    
      	
               
      

            	
              Date:______________________________

            

    

     

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

     

    Name:_______________________

     

    Address:______________________

     

    Taxpayer
ID Number:_____________________

     

    
      
        
          C-3

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
D

     

    FORM OF
TRANSFEROR CERTIFICATE

    TO BE
EXECUTED FOR QIBs

     

    __________,
[     ]

     

    Washington
Trust Bancorp, Inc.

    Washington
Preferred Capital Trust

    23 Broad
Street

    Westerly,
Rhode Island 02891

     

    
      	
              Re:

            	
              Purchase
      of $[SPECIFY] liquidation amount of MMCapSSM

            
	 	(the “Capital
      Securities”) of Washington Preferred Capital Trust (the
      “Trust”)

    

     

    Reference
is hereby made to the Amended and Restated Declaration of Trust of Washington
Preferred Capital Trust, dated as of April 7, 2008 (the “Declaration”), among
David V. Devault, John F. Treanor and Mark K. W. Gim, as Administrators,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Institutional Trustee, Washington Trust Bancorp, Inc., as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of the
Trust.  Capitalized terms used but not defined herein shall have the
meanings given them in the Declaration.

     

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

     

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

     

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

     

    _________________________

    (Name of
Transferor)

     

    
      	
               
      

            	
              By:__________________________

            

    

    Name:                                                                

     

    Title:__________________________

     

    Date:__________________________

     

     

     

     

    
 

    
      
        
          D-1

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
E

     

    FORM OF
TRANSFEREE CERTIFICATE

    TO BE
EXECUTED BY NON-U.S. PERSONS

     

    __________,
[     ]

     

    Washington
Trust Bancorp, Inc.

    Washington
Preferred Capital Trust

    23 Broad
Street

    Westerly,
Rhode Island 02891

     

    
      	
              Re:

            	
              Purchase
      of $[SPECIFY] liquidation amount of MMCapSSM

            
	 	(the “Capital
      Securities”) of Washington Preferred Capital Trust (the
      “Trust”)

    

     

    Reference
is hereby made to the Amended and Restated Declaration of Trust of Washington
Preferred Capital Trust, dated as of April 7, 2008 (the “Declaration”), among
David V. Devault, John F. Treanor and Mark K. W. Gim, as Administrators,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Institutional Trustee, Washington Trust Bancorp, Inc., as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of the
Trust.  Capitalized terms used but not defined herein shall have the
meanings given them in the Declaration.

     

    [This
letter relates to $[_______________] aggregate liquidation amount of Capital
Securities which are held in the name of [name of transferor]]2.

     

    [This
letter relates to $[_______________] aggregate liquidation amount of Capital
Securities represented by a beneficial interest in a Rule 144A Global Capital
Security (CUSIP No. ________) held with the Depositary by or on behalf of
[____________] transferor as beneficial owner (the “Transferor”). The Transferor
has requested an exchange or transfer of its beneficial interests for an
interest in a Regulation S Global Capital Security (CUSIP No.
____________)]3

     

    In
accordance with Section 8.2(b) of the Declaration, we do hereby certify that (i)
we are not a “U.S. person” (as such term is defined in Rule 902 under the
Securities Act), (ii) we are not acquiring the Capital Securities for the
account or benefit of any U.S. person, and (iii) the offer and sale of Capital
Securities to us constitutes an “offshore transaction” under Regulation S under
the Securities Act.

     

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

     

    

      

    

      
      1 Only
applicable to transfer of Definitive Capital Securities.

    

    
      2  Only
applicable to transfer of Book-Entry Capital Securities.

    

    
      
        
          E-1

        

         

      

      
         

        
          

        

      

      
         

      

    

    _________________________

    (Name of
Transferee)

     

    
      	
               
      

            	
              By:__________________________

            

    

    Name:                                                                

    Title:__________________________

     

    Date:__________________________

     

     

    
      
        D-2

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
10.2

     

     

     

     

     

     

     

    
 

     

    WASHINGTON
TRUST BANCORP, INC.

     

    as
Issuer

     

    INDENTURE

     

    Dated as
of April 7, 2008

     

     

     

    WILMINGTON
TRUST COMPANY

     

    as
Trustee

     

    FLOATING
RATE JUNIOR SUBORDINATED DEBT SECURITIES DUE 2038

     

     

     

     

     

     

     

     

     

    

     

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      	ARTICLE
      I DEFINITIONS	1
	
              Section
      1.01

            	
              Definitions

            	
              1

            
	 	 	 
	
              ARTICLE
      II DEBT SECURITIES

            	9
	
              Section
      2.01

            	
              Authentication
      and Dating

            	
              9

            
	
              Section
      2.02

            	
              Form
      of Trustee’s Certificate of Authentication

            	
              10

            
	
              Section
      2.03

            	
              Form
      and Denomination of Debt Securities

            	
              10

            
	
              Section
      2.04

            	
              Execution
      of Debt Securities

            	
              10

            
	
              Section
      2.05

            	
              Exchange
      and Registration of Transfer of Debt Securities

            	
              11

            
	
              Section
      2.06

            	
              Mutilated,
      Destroyed, Lost or Stolen Debt Securities

            	
              14

            
	
              Section
      2.07

            	
              Temporary
      Debt Securities

            	
              15

            
	
              Section
      2.08

            	
              Payment
      of Interest

            	
              15

            
	
              Section
      2.09

            	
              Cancellation
      of Debt Securities Paid, etc

            	
              16

            
	
              Section
      2.10

            	
              Computation
      of Interest

            	
              17

            
	
              Section
      2.11

            	
              Extension
      of Interest Payment Period

            	
              18

            
	
              Section
      2.12

            	
              CUSIP
      Numbers

            	
              19

            
	
              Section
      2.13

            	
              Global
      Debentures

            	
              19

            
	 	 	 
	
              ARTICLE
      III PARTICULAR COVENANTS OF THE COMPANY

            	22
	
              Section
      3.01

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

            	
              22

            
	
              Section
      3.02

            	
              Offices
      for Notices and Payments, etc.

            	
              23

            
	
              Section
      3.03

            	
              Appointments
      to Fill Vacancies in Trustee’s Office

            	
              23

            
	
              Section
      3.04

            	
              Provision
      as to Paying Agent

            	
              23

            
	
              Section
      3.05

            	
              Certificate
      to Trustee

            	
              24

            
	
              Section
      3.06

            	
              Additional
      Amounts

            	
              25

            
	
              Section
      3.07

            	
              Compliance
      with Consolidation Provisions

            	
              25

            
	
              Section
      3.08

            	
              Limitation
      on Dividends

            	
              25

            
	
              Section
      3.09

            	
              Covenants
      as to the Trust

            	
              26

            
	 	 	 
	
              ARTICLE
      IV LISTS

            	26
	
              Section
      4.01

            	
              Securityholders’
      Lists

            	
              26

            
	
              Section
      4.02

            	
              Preservation
      and Disclosure of Lists

            	
              27

            
	
              Section
      4.03

            	
              Financial
      and Other Information

            	
              28

            
	 	 	 
	
              ARTICLE
      V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

            	29
	
              Section
      5.01

            	
              Events
      of Default

            	
              29

            
	
              Section
      5.02

            	
              Payment
      of Debt Securities on Default; Suit Therefor

            	
              31

            
	
              Section
      5.03

            	
              Application
      of Moneys Collected by Trustee

            	
              32

            

    

     

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
      5.04

            	
              Proceedings
      by Securityholders

            	
              33

            
	
              Section
      5.05

            	
              Proceedings
      by Trustee

            	
              33

            
	
              Section
      5.06

            	
              Remedies
      Cumulative and Continuing

            	
              33

            
	
              Section
      5.07

            	
              Direction
      of Proceedings and Waiver of Defaults by Majority of
      Securityholders

            	
              34

            
	
              Section
      5.08

            	
              Notice
      of Defaults

            	
              35

            
	
              Section
      5.09

            	
              Undertaking
      to Pay Costs

            	
              35

            
	 	 	 
	
              ARTICLE
      VI CONCERNING THE TRUSTEE

            	35
	
              Section
      6.01

            	
              Duties
      and Responsibilities of Trustee

            	
              35

            
	
              Section
      6.02

            	
              Reliance
      on Documents, Opinions, etc.

            	
              37

            
	
              Section
      6.03

            	
              No
      Responsibility for Recitals, etc.

            	
              38

            
	
              Section
      6.04

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

            	
              38

            
	
              Section
      6.05

            	
              Moneys
      to be Held in Trust

            	
              38

            
	
              Section
      6.06

            	
              Compensation
      and Expenses of Trustee

            	
              38

            
	
              Section
      6.07

            	
              Officers’
      Certificate as Evidence

            	
              39

            
	
              Section
      6.08

            	
              Eligibility
      of Trustee

            	
              39

            
	
              Section
      6.09

            	
              Resignation
      or Removal of Trustee

            	
              40

            
	
              Section
      6.10

            	
              Acceptance
      by Successor Trustee

            	
              41

            
	
              Section
      6.11

            	
              Succession
      by Merger, etc.

            	
              42

            
	
              Section
      6.12

            	
              Authenticating
      Agents

            	
              42

            
	 	 	 
	
              ARTICLE
      VII CONCERNING THE SECURITYHOLDERS

            	43
	
              Section
      7.01

            	
              Action
      by Securityholders

            	
              43

            
	
              Section
      7.02

            	
              Proof
      of Execution by Securityholders

            	
              44

            
	
              Section
      7.03

            	
              Who
      Are Deemed Absolute Owners

            	
              44

            
	
              Section
      7.04

            	
              Debt
      Securities Owned by Company Deemed Not Outstanding

            	
              45

            
	
              Section
      7.05

            	
              Revocation
      of Consents; Future Holders Bound

            	
              45

            
	 	 	 
	
              ARTICLE
      VIII SECURITYHOLDERS’ MEETINGS

            	45
	
              Section
      8.01

            	
              Purposes
      of Meetings

            	
              45

            
	
              Section
      8.02

            	
              Call
      of Meetings by Trustee

            	
              46

            
	
              Section
      8.03

            	
              Call
      of Meetings by Company or Securityholders

            	
              46

            
	
              Section
      8.04

            	
              Qualifications
      for Voting

            	
              46

            
	
              Section
      8.05

            	
              Regulations

            	
              47

            
	
              Section
      8.06

            	
              Voting

            	
              47

            
	
              Section
      8.07

            	
              Quorum;
      Actions

            	
              48

            
	 	 	 
	
              ARTICLE
      IX SUPPLEMENTAL INDENTURES

            	49
	
              Section
      9.01

            	
              Supplemental
      Indentures without Consent of Securityholders

            	
              49

            
	
              Section
      9.02

            	
              Supplemental
      Indentures with Consent of Securityholders

            	
              50

            

    

     

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
      9.03

            	
              Effect
      of Supplemental Indentures

            	
              51

            
	
              Section
      9.04

            	
              Notation
      on Debt Securities

            	
              51

            
	
              Section
      9.05

            	
              Evidence
      of Compliance of Supplemental Indenture to be Furnished to
      Trustee

            	
              52

            
	 	 	 
	
              ARTICLE
      X REDEMPTION OF SECURITIES

            	52
	
              Section
      10.01

            	
              Optional
      Redemption

            	
              52

            
	
              Section
      10.02

            	
              Special
      Event Redemption

            	
              52

            
	
              Section
      10.03

            	
              Notice
      of Redemption; Selection of Debt Securities

            	
              52

            
	
              Section
      10.04

            	
              Payment
      of Debt Securities Called for Redemption

            	
              53

            
	 	 	 
	
              ARTICLE
      XI CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

            	54
	
              Section
      11.01

            	
              Company
      May Consolidate, etc., on Certain Terms

            	
              54

            
	
              Section
      11.02

            	
              Successor
      Entity to be Substituted

            	
              54

            
	
              Section
      11.03

            	
              Opinion
      of Counsel to be Given to Trustee

            	
              55

            
	 	 	 
	
              ARTICLE
      XII SATISFACTION AND DISCHARGE OF INDENTURE

            	55
	
              Section
      12.01

            	
              Discharge
      of Indenture

            	
              55

            
	
              Section
      12.02

            	
              Deposited
      Moneys to be Held in Trust by Trustee

            	
              56

            
	
              Section
      12.03

            	
              Paying
      Agent to Repay Moneys Held

            	
              56

            
	
              Section
      12.04

            	
              Return
      of Unclaimed Moneys

            	
              56

            
	 	 	 
	
              ARTICLE
      XIII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
      DIRECTORS

            	57
	
              Section
      13.01

            	
              Indenture
      and Debt Securities Solely Corporate Obligations

            	
              57

            
	 	 	 
	
              ARTICLE
      XIV MISCELLANEOUS PROVISIONS

            	57
	
              Section
      14.01

            	
              Successors

            	
              57

            
	
              Section
      14.02

            	
              Official
      Acts by Successor Entity

            	
              57

            
	
              Section
      14.03

            	
              Surrender
      of Company Powers

            	
              57

            
	
              Section
      14.04

            	
              Addresses
      for Notices, etc.

            	
              57

            
	
              Section
      14.05

            	
              Governing
      Law

            	
              58

            
	
              Section
      14.06

            	
              Evidence
      of Compliance with Conditions Precedent

            	
              58

            
	
              Section
      14.07

            	
              Business
      Day Convention

            	
              58

            
	
              Section
      14.08

            	
              Table
      of Contents, Headings, etc.

            	
              59

            
	
              Section
      14.09

            	
              Execution
      in Counterparts

            	
              59

            
	
              Section
      14.10

            	
              Separability

            	
              59

            
	
              Section
      14.11

            	
              Assignment

            	
              59

            
	
              Section
      14.12

            	
              Acknowledgment
      of Rights

            	
              59

            
	 	 	 
	
              ARTICLE
      XV SUBORDINATION OF DEBT SECURITIES

            	60

    

     

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    
      	
              Section
      15.01

            	
              Agreement
      to Subordinate

            	
              60

            
	
              Section
      15.02

            	
              Default
      on Senior Indebtedness

            	
              60

            
	
              Section
      15.03

            	
              Liquidation;
      Dissolution; Bankruptcy

            	
              60

            
	
              Section
      15.04

            	
              Subrogation

            	
              62

            
	
              Section
      15.05

            	
              Trustee
      to Effectuate Subordination

            	
              63

            
	
              Section
      15.06

            	
              Notice
      by the Company

            	
              63

            
	
              Section
      15.07

            	
              Rights
      of the Trustee; Holders of Senior Indebtedness

            	
              63

            
	
              Section
      15.08

            	
              Subordination
      May Not Be Impaired

            	
              64

            

    

    

    EXHIBITS

    EXHIBIT
A                                Form
of Debt Security

    EXHIBIT
B                                Form
of Certificate of Officer of the Company

    

    
      
        
           

           

        

         

      

      
        iv

        
          

        

      

      
         

      

    

    THIS
INDENTURE, dated as of April 7, 2008, between Washington Trust Bancorp, Inc., a
bank holding company incorporated in the State of Rhode Island (hereinafter
sometimes called the “Company”), and Wilmington Trust Company, a Delaware
banking corporation, as trustee (hereinafter sometimes called the
“Trustee”).

     

    W I T N E
S S E T H :

     

    WHEREAS,
for its lawful corporate purposes, the Company has duly authorized the issuance
of its Floating Rate Junior Subordinated Debt Securities due 2038 (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
Amounts” has the meaning set forth in Section 3.06.

     

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

     

    “Administrative
Action” has the meaning specified within the definition of “Tax Event” in this
Section 1.01.

     

    “Applicable
Depositary Procedures” means, with respect to any transfer or transaction
involving a Book-Entry Capital Security or a Debt Security represented by a
Global Debenture, the rules and procedures of the Depositary for such Book-Entry
Capital Security or Debt Security represented by a 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.

     

    “Book-Entry
Capital Security” means a Capital Security the ownership and transfers of which
shall be reflected and made, as applicable, through book entries by the
Depositary.

     

    “Business
Day” means any day other than a Saturday, Sunday or any other day on which
banking institutions in Wilmington, Delaware, The City of New York or
Providence, Rhode Island are permitted or required by 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 “MMCapSSM” and
rank pari passu with
Common Securities issued by the Trust; provided, however, that if an
Event of Default (as defined in the Declaration) has occurred and is continuing,
the rights of holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of such Capital Securities.

     

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

     

    “Capital
Treatment Event” means, if the Company is organized and existing under the laws
of the United States or any state thereof or the District of Columbia, the
receipt by the Company and the Trust of an Opinion of Counsel experienced in
such matters to the effect that, as a result of any amendment to, or change in,
the laws, rules or regulations of the United States or any political subdivision
thereof or therein, or as the result of any official or administrative
pronouncement or action or decision interpreting or applying such laws, rules or
regulations, which amendment or change is effective or which pronouncement,
action or decision is announced on or after the date of original issuance of the
Debt Securities, there is more than an insubstantial risk that the Company will
not, within 90 days of the date of such opinion, be entitled to treat Capital
Securities as “Tier 1 Capital” (or the then equivalent thereof) for purposes of
the capital adequacy guidelines of the Federal Reserve (or any successor
regulatory authority with jurisdiction over bank holding companies), as then in
effect and applicable to the Company; provided, however, that the
inability of the Company to treat all or any portion of the aggregate
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 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        
preferred
stock, minority interests in consolidated subsidiaries and any other class of
security or interest which the Federal Reserve (or any successor regulatory
authority with jurisdiction over bank holding companies) may now or hereafter
accord “Tier 1 Capital” treatment that, in the aggregate, exceed the amount
which may now or hereafter qualify for treatment as “Tier 1 Capital” under
applicable capital adequacy guidelines of the Federal Reserve (or any successor
regulatory authority with jurisdiction over bank holding companies); 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.  For the avoidance of doubt, the
inability of the Company to treat all or any portion of the aggregate
Liquidation Amount of the Capital Securities as “Tier 1 Capital” as a result of
the changes effected by the final rule adopted by the Federal Reserve on March
1, 2005 shall not constitute the basis for a Capital Treatment
Event.

    

     

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

     

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

     

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

     

    “Company”
means Washington Trust Bancorp, Inc., a bank holding company incorporated in the
State of Rhode Island, 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
April 7, 2008, 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 Exchange Act
that is designated as Depositary by the Company.  DTC will be the
initial Depositary.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “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 or on behalf of 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.

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Interest
Payment Date” means March 15, June 15, September 15, and December 15 of each
year, commencing on June 15, 2008, subject to Section 14.07.

     

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

     

    “Interest
Rate” means, with respect to any Interest Period, a per annum rate of interest
equal to LIBOR, as determined on the LIBOR Determination Date for such Interest
Period (or, in the case of the first Interest Period, 2.72750%), plus 3.50%;
provided, however, that the
Interest Rate for any Interest Period may not exceed the highest rate permitted
by New York law, as the same may be modified by United States law of general
application.

     

    “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 becomes effective on or after the date of the original
issuance of the Debt Securities.

     

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

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    “Major
Depository Institution Subsidiary” means any subsidiary of the Company that (i)
is a depository institution and (ii) meets the definition of “significant
subsidiary” within the meaning of Rule 405 under the Securities
Act.

     

    “Maturity
Date” means June 15, 2038, subject to Section 14.07.

     

    “Maturity
Redemption Price” has the meaning set forth in Section 3.01(a).

     

    “Officer”
means, with respect to the execution and delivery of any certificate or other
document by the Company hereunder, any of the following officers of the Company:
the Chairman and Chief Executive Officer, the President and Chief Operating
Officer, the Chief Financial Officer, any Executive Vice President, or any
Senior Vice President.

     

    “Officers’
Certificate” means a certificate signed by any two Officers, and delivered to
the Trustee.  Each such certificate shall include the statements
provided for in Section 14.06 if and to the extent required by the provisions of
such Section.

     

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

     

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

     

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

     

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

     

    (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

    
      
        
        

      

      
        5

        
          

        

      

      
        
        
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.

    

     

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

     

    “Optional
Redemption Price” means an amount in cash equal to 100% of the principal amount
of the Debt Securities being redeemed plus unpaid interest accrued on such Debt
Securities to the related Optional Redemption Date.

     

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

     

    “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.

     

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

     

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

     

    “Reference
Banks” has the meaning set forth in Section 2.10(b)(ii).

     

    “Resale
Restriction Termination Date” means, with respect to any Debt Security, the date
which is the later of (i) one year (or such shorter period of time as permitted
by Rule 144 under the Securities Act) after the later of (y) the date of
original issuance of such Debt Security and (z) the last date on which the
Company or any Affiliate (as defined in Rule 405 under the Securities Act) of
the Company was the holder of such Debt Security (or any predecessor thereto)
and (ii) such later date, if any, as may be required by any subsequent change in
applicable law.

     

    “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.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    “Special
Redemption Price” means, with respect to the redemption of any Debt Security
following a Special Event, an amount in cash equal to 103.10% of the principal
amount of Debt Securities to be redeemed prior to June 15, 2009 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:

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              Special Redemption
      During the 12-Month Period Beginning June
      15,

            	
              Percentage of
      Principal Amount

            
	
              2009

            	
              102.48%

            
	
              2010

            	
              101.86%

            
	
              2011

            	
              101.24%

            
	
              2012

            	
              100.62%

            
	
              2013
      and thereafter

            	
              100.00%

            

    

    

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

     

    “Tax
Event” means the receipt by the Company and the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to
or change (including any announced prospective change) in the laws or any
regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement (including any private letter ruling, technical
advice memorandum, regulatory procedure, notice or announcement (an
“Administrative Action”)) or judicial decision interpreting or applying such
laws or regulations, regardless of whether such Administrative Action or
judicial decision is issued to or in connection with a proceeding involving the
Company or the Trust and whether or not subject to review or appeal, which
amendment, clarification, change, Administrative Action or decision is enacted,
promulgated or announced, in each case on or after the date of original issuance
of the Debt Securities, there is more than an insubstantial risk that: (i) the
Trust is, or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income received or accrued on
the Debt Securities; (ii) if the Company is organized and existing under the
laws of the United States or any state thereof or the District of Columbia,
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.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Trust”
means Washington Preferred Capital Trust, 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 the
Trust.

     

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

     

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

     

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

     

    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 $10,310,000 may be
executed and delivered by the Company to the Trustee for authentication, and the
Trustee shall thereupon authenticate and make available for delivery said Debt
Securities to or upon the written order of the Company, signed by its Chairman
of the Board of Directors, Vice Chairman, President or Chief Financial Officer
or one of its Vice Presidents, without any further action by the Company
hereunder.  In authenticating such Debt Securities, and accepting the
additional responsibilities under this Indenture in relation to such Debt
Securities, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon a copy of any Board Resolution or
Board Resolutions relating thereto and, if applicable, an appropriate record of
any action taken pursuant to such resolution, in each case certified by the
Secretary or an Assistant Secretary or other officers with appropriate delegated
authority of the Company as the case may be.

     

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

     

    The
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.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Section
2.02 Form of Trustee’s
Certificate of Authentication.

     

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

     

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

     

    
      	
               
      

            	
              Wilmington
      Trust Company,

            

    

    
      	
               
      

            	
              not
      in its individual capacity

            

    

    
      	
               
      

            	
              but
      solely as trustee

            

    

     

    By:                                                                                                                            

    Authorized
Officer

     

    Section
2.03 Form and Denomination of
Debt Securities.

     

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

     

    Section
2.04 Execution of Debt
Securities.

     

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

    
      
        
        

      

      
        10

        
          

        

      

      
        
        
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.

     

    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 other than exchanges pursuant to Section 2.07,
Section 9.04 or Section 10.04 not involving any transfer.

     

    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 prior to the Resale
Restriction Termination Date except in compliance with the legend set forth
below, 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        
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 OR ANY INTEREST OR PARTICIPATION
HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) ONE YEAR (OR SUCH SHORTER
PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT) AFTER THE
LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST DATE ON WHICH
THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT)
OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION
(OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE COMPANY OR
ITS SUBSIDIARY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER”, AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION 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, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES
ACT, (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, SUBJECT TO THE
COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C)
OR (E) ABOVE 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 OR ANY INTEREST OR PARTICIPATION 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        
HEREIN, BY ITS ACCEPTANCE HEREOF OR
THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

    

     

    THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION HEREIN, 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 OR SUCH INTEREST OR PARTICIPATION 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 OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

     

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

     

    THIS
SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF
$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF.  ANY ATTEMPTED
TRANSFER OF THIS SECURITY IN DENOMINATIONS 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 OR ANY INTEREST OR
PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        
NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN.

    

     

    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 THE 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 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        
contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.

    

     

    Section
2.07 Temporary Debt
Securities.

     

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

     

    Section
2.08 Payment of
Interest.

     

    Each Debt
Security will bear interest at the then applicable Interest Rate (i) in the case
of the initial Interest Period, for the period from, and including, the date of
original issuance of such Debt Security to, but excluding, the initial Interest
Payment Date and (ii) thereafter, for the period from, and including, the first
day following the end of the preceding Interest Period to, but excluding, the
applicable Interest Payment Date or, in the case of the last Interest Period,
the related Optional Redemption Date, Special Redemption Date or Maturity Date,
as applicable (each such period, an “Interest Period”), on the principal
thereof, on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on Deferred Interest and on any
overdue installment of interest (including Defaulted Interest), payable (subject
to the provisions of Article XV) on each Interest Payment Date and on the
Maturity Date, any Optional Redemption Date or the Special Redemption Date, as
the case may be.  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
such Debt Security (or one or more Predecessor Securities) is registered at the
close of business on the regular record date for such interest installment,
except that interest and any Deferred Interest payable on the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be,
other than any Interest Payment Date shall be paid to the Person to whom
principal is paid.  In case (i) the Maturity Date of any Debt
Security or (ii) any Debt Security or portion thereof is called for
redemption and the related Optional Redemption 

    
      
        
        

      

      
        15

        
          

        

      

      
        
        
Date or
the Special Redemption Date, as the case may be, is subsequent to the regular
record date with respect to any Interest Payment Date and prior to such Interest
Payment Date, interest on such Debt Security will be paid upon presentation and
surrender of such Debt Security.

    

     

    Any
interest on any Debt Security, other than Deferred Interest, that is payable,
but is not punctually paid or duly provided for by the Company, on any Interest
Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be
payable to the 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 provided in this
paragraph.  Thereupon the Trustee shall fix a special record date for
the payment of such Defaulted Interest, which shall not be more than fifteen nor
less than ten days prior to the date of the proposed payment and not less than
ten days after the receipt by the Trustee of the notice of the proposed
payment.  The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the special
record date therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Debt Security
Register, not less than ten days prior to such special record
date.  Notice of the proposed payment of such Defaulted Interest and
the special record date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Debt Securities (or
their respective Predecessor Securities) are registered on  such
special record date and thereafter the Company shall have no further payment
obligation in respect of the Defaulted Interest.

     

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

     

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

     

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

     

    Section
2.09 Cancellation of Debt
Securities Paid, etc.

     

    All Debt
Securities surrendered for the purpose of payment, redemption, exchange or
registration of transfer, shall, if surrendered to the Company or any Paying
Agent, 

    
      
        
        

      

      
        16

        
          

        

      

      
        
        
be
surrendered to the Trustee and promptly canceled by it, or, if surrendered to
the Trustee or any Authenticating Agent, shall be promptly canceled by it, and
no Debt Securities shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture.  All Debt Securities
canceled by any Authenticating Agent shall be delivered to the
Trustee.  The Trustee shall destroy all canceled Debt Securities
unless the Company otherwise directs the Trustee in writing, in which case the
Trustee shall dispose of such Debt Securities as directed by the
Company.  The Company shall promptly deliver or cause to be delivered
to the Trustee for cancellation any Debt Securities previously authenticated and
delivered hereunder that the Company or any Affiliate (as defined in Rule 405
under the Securities Act) of the Company may have acquired in any manner
whatsoever, and all Debt Securities so delivered shall be promptly cancelled.
Any such acquisition of Debt Securities by the Company or any Affiliate of the
Company 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 Period will be computed on the basis
of a 360-day year and the actual number of days elapsed in such Interest
Period.

     

    (b) LIBOR
shall be determined by the Calculation Agent for each Interest Period (other
than the first Interest Period, in which case LIBOR will be 2.72750% per annum)
in accordance with the following provisions:

     

    (i) 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 Interest Payment Date that commences
such Interest Period (each such day, a “LIBOR Determination Date”), LIBOR shall
equal the rate, as obtained by the Calculation Agent, for three-month U.S.
Dollar deposits in Europe, which appears on Telerate (as defined in the
International Swaps and Derivatives Association, Inc. 2000 Interest Rate and
Currency Exchange Definitions) page 3750 or such other page as may replace such
page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date, as
reported by Bloomberg Financial Markets Commodities News or any successor
service (“Telerate Page 3750”).  “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 such LIBOR Determination Date, the corrected rate as so substituted
will be LIBOR for such LIBOR Determination Date.

     

    (ii) If, on
such LIBOR Determination Date, such rate does not appear on Telerate Page 3750,
the Calculation Agent shall determine the arithmetic mean of the offered
quotations of the Reference Banks to leading banks in the London interbank
market for three-month U.S. Dollar deposits in Europe (in an amount determined
by the Calculation Agent) by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on such LIBOR Determination Date made by
the Calculation Agent to the 

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

      Reference
Banks.  If, on such LIBOR Determination Date, at least two of the
Reference Banks provide such quotations, LIBOR shall equal the arithmetic mean
of such quotations.  If, on such 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
such 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.

    

     

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

     

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

     

    (d) On each
LIBOR Determination Date, the Calculation Agent shall notify, in writing, the
Company and the Paying Agent of the applicable Interest Rate that applies to the
related Interest Period.  The Calculation Agent shall, upon the
request of a holder of any Debt Securities, inform such holder of the Interest
Rate that applies to the related Interest Period.  All calculations
made by the Calculation Agent in the absence of manifest error shall be
conclusive for all purposes and binding on the Company and the holders of the
Debt Securities.  The Paying Agent shall be entitled to rely on
information received from the Calculation Agent or the Company as to the
applicable 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.

     

    So long
as no Event of Default pursuant to Sections 5.01(b), (e), (f), (g), (h) or (i)
of this Indenture has occurred and is continuing, the Company shall have the
right, from time to time and without causing an Event of Default, to defer
payments of interest on the Debt Securities by extending the interest payment
period on the Debt Securities at any time and from time to time during the term
of the Debt Securities, for up to 20 consecutive quarterly periods (each such
extended interest payment period, together with all previous and further
consecutive extensions thereof, is referred to herein as an “Extension
Period”).  No Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may
be.  During any Extension Period, interest will continue to accrue on
the Debt Securities, and interest on such accrued interest (such accrued
interest and interest thereon referred to herein as “Deferred Interest”) will
accrue at an annual rate equal to the Interest Rate applicable during such
Extension Period, compounded quarterly from the date such Deferred Interest
would have been payable were it not 

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    for the
Extension Period, to the extent permitted by applicable law.  No
interest or Deferred Interest (except any Additional Amounts that may be due and
payable) shall be due and payable during an Extension Period, except at the end
thereof.  At the end of any Extension Period, the Company shall pay
all Deferred Interest then accrued and unpaid on the Debt Securities; provided, however, that during
any Extension Period, the Company shall be subject to the restrictions set forth
in Section 3.08.  Prior to the termination of any Extension Period,
the Company may further extend such Extension Period, provided, that no
Extension Period (including all previous and further consecutive extensions that
are part of such Extension Period) shall exceed 20 consecutive quarterly
periods.  Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Company may commence a new Extension
Period, subject to the foregoing requirements.  The Company must give
the Trustee notice of its election to begin or extend an Extension Period no
later than the close of business on the fifteenth Business Day prior to the
applicable Interest Payment Date.  The Trustee shall give notice of
the Company’s election to begin or extend an Extension Period to the
Securityholders, promptly after receipt of notice from the Company of its
election to begin or extend an Extension Period.

    

    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 an owner of beneficial interests in outstanding Debt Securities, the
Debt Securities owned by such beneficial owner shall be issued in the form of
one or more Global Debentures.  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 of such Depositary and
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 in certificated form, 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 

    
      
        
        

      

      
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(90) days
after obtaining knowledge of such event or (iii) an Event of Default shall have
occurred and be continuing.  Upon obtaining knowledge of the
occurrence of any event specified in clause (i), (ii) or (iii) 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 in certificated form to
such beneficial owners requesting the same.  Upon the issuance of such
Debt Securities in certificated form and the registration in the Debt Security
Register of such Debt Securities in the names of the holders thereof, the
Trustee shall recognize such holders as holders of Debt Securities for all
purposes of this Indenture and the Debt Securities.

    

     

    (c) If any
Global Debenture is to be exchanged for Debt Securities in certificated form or
canceled in part, or if a Debt Security in certificated form 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 herein or (ii) the principal amount thereof shall be
reduced or increased, subject to Section 2.03, by an amount equal to the portion
thereof to be so exchanged or canceled, or equal to the principal amount of such
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
Depositary 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 Debt Securities issuable
in exchange for such Global Debenture (or any portion thereof) in accordance
with the instructions of the Depositary.  The Trustee 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.

     

    (e) Debt
Securities distributed to holders of Book-Entry Capital Securities (as defined
in the Declaration) upon the dissolution of the Trust shall be distributed in
the form of one or more Global Debentures registered in the name of the
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 owners of beneficial interests in such Book-Entry Capital
Securities.  Debt Securities distributed to holders of Capital
Securities in certificated form upon the dissolution of the Trust shall be
issued in certificated form.

     

    (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 Depositary
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 

    
      
        
        

      

      
        20

        
          

        

      

      
        
        
with the
Depositary for all purposes of this Indenture relating to a Global Debenture as
the sole holder of the Debt Security and shall have no obligation to any
beneficial owner of a Global Debenture.  Neither the Trustee nor the
Debt Securities registrar shall have any liability in respect of any transfers
affected by the Depositary or its Depositary Participants.

    

     

    (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 owner
of any beneficial interest in any Global Debenture shall have any rights under
this Indenture with respect to such Global Debenture, and the Depositary may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the owner and holder of such Global Debenture for all purposes under the
Indenture.  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 in 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 the Depositary or impair, as between the Depositary and such
beneficial owners, the operation of customary practices governing the exercise
of the rights of the Depositary or its nominee as holder of any Debt
Security.

     

    (i) Global
Debentures shall bear the following legend on the face thereof:

     

    THIS
SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE
OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     

    UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO 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.

    
      
        
        

      

      
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    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 in respect of the Debt Securities at the place, at the
respective times and in the manner provided in this Indenture and the Debt
Securities. The Debt Securities will mature on the Maturity Date at an amount in
cash equal to 100% of the principal amount thereof plus unpaid interest accrued
thereon to such date (the “Maturity Redemption Price”).   Payment
of the principal of and premium, if any, and interest on the Debt Securities due
on the Maturity Date, any Optional Redemption Date or the Special Redemption
Date, as the case may be, will be made by the Company in immediately available
funds against presentation and surrender of such Debt Securities.  At
the option of the Company, each installment of interest on the Debt Securities
due on an Interest Payment Date other than the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be, may be paid
(i) by mailing checks for such interest payable to the order of the holders of
Debt Securities entitled thereto as they appear on the Debt Security Register or
(ii) by wire transfer of immediately available funds to any account with a
banking institution located in the United States designated by such holders to
the Paying Agent no later than the related record
date.  Notwithstanding anything to the contrary contained in this
Indenture or any Debt Security, if the Trust or the trustee of the Trust is the
holder of any Debt Security, then all payments in respect of such Debt Security
shall be made by the Company in immediately available funds when
due.

     

    (b) The
Company will treat the Debt Securities as indebtedness, and the interest payable
in respect of such Debt Securities (including any Additional Amounts) 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 provided, that (i) any beneficial owner thereof that is a “United States
person” within the meaning of Section 7701(a)(30) of the Code (A) has provided
an Internal Revenue Service Form W-9 (or any substitute or successor form) in
the manner required establishing its status as a “United States person” for U.S.
federal income tax purposes, and (B) the Internal Revenue Service has neither
notified the Issuer that the taxpayer identification number furnished by such
beneficial owner is incorrect nor notified the Issuer that there is
underreporting by such beneficial owner, and (ii) any beneficial owner thereof
that is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code has provided an Internal Revenue Service Form W-8 BEN, Internal
Revenue Service Form W-8ECI, or Internal Revenue Service Form W-8EXP, as
applicable (or any substitute or successor form) in the manner required
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

    
      
        
        

      

      
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Securities
are outstanding is remote because of the restrictions that would be imposed on
the Company’s ability to declare or pay dividends or distributions on, or to
redeem, purchase or make a liquidation payment with respect to, any of its
outstanding equity and on the Company’s ability to make any payments of
principal of or premium, if any, or interest on, or repurchase or redeem, any of
its debt securities that rank pari passu in all respects
with or junior in interest to the Debt Securities.

    

     

    Section
3.02 Offices for Notices and
Payments, etc.

     

    So long
as any of the Debt Securities remain outstanding, the Company will maintain in
Wilmington, Delaware or in Providence, Rhode Island 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 2.05, such
office or agency for all of the above purposes shall be the Principal Office of
the Trustee.  In case the Company shall fail to maintain any such
office or agency in Wilmington, Delaware or in Providence, Rhode Island, 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
Providence, Rhode Island where the Debt Securities may be presented for
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in Wilmington, Delaware or in
Providence, Rhode Island 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,

     

    (i) 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

    
      
        
        

      

      
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      Company
or by any other obligor on the Debt Securities) in trust for the benefit of the
holders of the Debt Securities;

    

     

    (ii) 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

     

    (iii) 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
make such payments so becoming due and will notify the Trustee in writing of any
failure to take such action and of any failure by the Company (or by any other
obligor under the Debt Securities) to make any payment on the Debt Securities
when the same shall become due and payable.

     

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

     

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

     

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

     

    (e) The
Company hereby initially appoints the Trustee to act as paying agent for the
Debt Securities (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, substantially in the form of Exhibit B attached hereto, stating
that in the course of the performance by the signers of their duties as officers
of the Company they would normally have knowledge of any default by the Company
in the performance of any covenants 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.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    Section
3.06 Additional
Amounts.

     

    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 Amounts”) on the
Debt Securities or the Trust Securities, as the case may be, as shall be
required so that the net amounts received and retained by the holders of Debt
Securities or Trust Securities, as the case may be, after payment of all taxes
(including withholding taxes), duties, assessments or other governmental
charges, will be equal to the amounts that such holders would have received and
retained had no such taxes (including withholding taxes), duties, assessments or
other governmental charges been imposed.

     

    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 Amounts provided for in this Section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts 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 Amounts
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 (i)
there shall have occurred and be continuing a Default or an Event of Default,
(ii) the Company shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee or (iii) the Company shall
have given notice of its election to defer payments of interest on the Debt
Securities by extending the interest payment period as provided herein and such
period, or any extension thereof, shall have commenced and be continuing, then
the Company may not (A) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company’s capital stock, (B) make any payment of principal of or 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 (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 

    
      
        
        

      

      
        25

        
          

        

      

      
        
        
arrangement
with or for the benefit of one or more employees, officers, directors or
consultants, (II) in connection with a dividend reinvestment or stockholder
stock purchase plan or (III) in connection with the issuance of capital stock of
the Company (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to the
occurrence of (i), (ii) or (iii) above, (b) as a result of any exchange or
conversion of any class or series of the Company’s capital stock (or any capital
stock of a subsidiary of the Company) for any class or series of the Company’s
capital stock or of any class or series of the Company’s indebtedness for any
class or series of the Company’s capital stock, (c) the purchase of fractional
interests in shares of the Company’s capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder’s rights plan, or the issuance of rights, stock or other property
under any stockholder’s rights plan, or the redemption or repurchase of rights
pursuant thereto or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior in
interest to such stock).

    

     

    Section
3.09 Covenants as to the
Trust.

     

    For so
long as such Trust Securities remain outstanding, the Company shall maintain
100% ownership of the Common Securities; provided, however, that any
permitted successor of the Company under this Indenture 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 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

     

    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.

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    Section
4.02 Preservation and Disclosure
of Lists.

     

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

     

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

     

    (i) 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

     

    (ii) 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.

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    (c) Each and
every holder of Debt Securities, by receiving and holding the same, agrees with
the Company and the Trustee that none of the Company, the Trustee or any Paying
Agent shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the holders of Debt Securities in
accordance with the provisions of subsection (b) of this Section 4.02,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under said subsection (b).

     

    Section
4.03 Financial and Other
Information.

     

    (a) The
Company shall deliver, by hardcopy or electronic transmission, to each
Securityholder (i) each Report on Form 10-K and Form 10-Q, if any, prepared by
the Company and filed with the Securities and Exchange Commission in accordance
with the Exchange Act within 10 Business Days after the filing thereof or (ii)
if the Company is (a) not then subject to Section 13 or 15(d) of the Exchange
Act (a “Private Entity”) or (b) exempt from reporting pursuant to Rule 12g3-2(b)
thereunder, the information required by Rule 144A(d)(4) under the Securities
Act.  Notwithstanding the foregoing, so long as a Holder of the Debt
Securities is BankNewport, WFC Holdings Corporation or an entity that holds a
pool of trust preferred securities and/or debt securities as collateral for its
securities or a trustee thereof, and the Company is (i) a Private Entity that,
on the date of original issuance of the Debt Securities, is required to provide
audited consolidated financial statements to its primary regulatory authority,
(ii) a Private Entity that, on the date of original issuance of the Debt
Securities, is not required to provide audited consolidated financial statements
to its primary regulatory authority but subsequently becomes subject to the
audited consolidated financial statement reporting requirements of that
regulatory authority or (iii) subject to Section 13 or 15(d) of the Exchange Act
on the date of original issuance of the Debt Securities or becomes so subject
after the date hereof but subsequently becomes a Private Entity, then, within 90
days after the end of each fiscal year, beginning with the fiscal year in which
the Debt Securities were originally issued if the Company was then subject to
(x) Section 13 or 15(d) of the Exchange Act or (y) audited consolidated
financial statement reporting requirements of its primary regulatory authority
or, otherwise, the earliest fiscal year in which the Company becomes subject to
(1) Section 13 or 15(d) of the Exchange Act or (2) the audited consolidated
financial statement reporting requirements of its primary regulatory authority,
the Company shall deliver, by hardcopy or electronic transmission, to each
Securityholder, unless otherwise provided pursuant to the preceding sentence,
(A) a copy of the Company’s audited consolidated financial statements (including
balance sheet and income statement) covering the related annual period and (B)
the report of the independent accountants with respect to such financial
statements.  In addition to the foregoing, the Company shall deliver
to each Securityholder 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.

     

    (b) If and so
long as the Holder of the Debt Securities is BankNewport, WFC Holdings
Corporation or an entity that holds a pool of trust preferred securities and/or
debt securities or a trustee thereof, the Company will cause copies of its
reports on Form FR Y-9C, 

    
      
        
        

      

      
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FR Y-9LP
and FR Y-6 to be delivered to such Holder promptly following their filing with
the Federal Reserve.

    

     

    

    ARTICLE
V

     

    REMEDIES
OF THE TRUSTEE AND SECURITYHOLDERS

     

    Section
5.01 Events of
Default.

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
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shall
make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or

    

     

    (g) a court
or administrative or governmental agency or body shall enter a decree or order
for the appointment of a receiver of a Major Depository Institution Subsidiary
or all or substantially all of its property in any liquidation, insolvency or
similar proceeding with respect to such Major Depository Institution Subsidiary
or all or substantially all of its property; or

     

    (h) a Major
Depository Institution Subsidiary shall consent to the appointment of a receiver
for it or all or substantially all of its property in any liquidation,
insolvency or similar proceeding with respect to it or all or substantially all
of its property; or

     

    (i) 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) mergers, consolidations or amalgamations,
each as permitted by the Declaration.

     

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

     

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

    
      
        
        

      

      
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any right
consequent thereon; provided, however, that if the
Debt Securities are held by the Trust or a trustee of the Trust, such waiver or
rescission and annulment shall not be effective until the holders of a majority
in aggregate liquidation amount of the outstanding Capital Securities of the
Trust shall have consented to such waiver or rescission and
annulment.

    

     

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

     

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

     

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

     

    In case
there shall be pending proceedings for the bankruptcy or for the reorganization
of the Company or any other obligor on the Debt Securities under Bankruptcy Law,
or in case a receiver or trustee shall have been appointed for the property of
the Company or such other obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the Debt Securities,
or to the creditors or property of the Company or such other obligor, the
Trustee, irrespective of whether the principal of the Debt Securities shall then
be due and payable as therein expressed or by acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to the
provisions of this Section 5.02, shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of principal and interest owing and unpaid in
respect of the Debt Securities and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all other
amounts due to the Trustee under Section 6.06) and of the Securityholders
allowed in such judicial proceedings relative to the Company or any other
obligor on the Debt Securities, or to the creditors or property of the Company
or such other 

    
      
        
        

      

      
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obligor,
unless prohibited by applicable law and regulations, to vote on behalf of the
holders of the Debt Securities in any election of a trustee or a standby trustee
in arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or Person performing similar functions in comparable proceedings,
and to collect and receive any moneys or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of its
charges and expenses; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the Securityholders to make such
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to the Securityholders, to pay to the Trustee
such amounts as shall be sufficient to cover reasonable compensation to the
Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other amounts due to the Trustee under Section
6.06.

    

     

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

     

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

     

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

     

    Section
5.03 Application of Moneys
Collected by Trustee.

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

    Section
5.05 Proceedings by
Trustee.

     

    In case
of an Event of Default, 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

    
      
        
        

      

      
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Trustee
or to the Securityholders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the
Securityholders.

    

     

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

     

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

    
      
        
        

      

      
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    Section
5.08 Notice of
Defaults.

     

    The
Trustee shall, within 90 days after a Responsible Officer of the Trustee shall
have actual knowledge or received written notice of the occurrence of a default
with respect to the Debt Securities, mail to all Securityholders, as the names
and addresses of such holders appear upon the Debt Security Register, notice of
all defaults with respect to the Debt Securities known to the Trustee, unless
such defaults shall have been cured before the giving of such notice (the term
“default” for the purpose of this Section is hereby defined to be any event
specified in Section 5.01, not including periods of grace, if any, provided for
therein); provided, that, except in the
case of default in the payment of the principal of or 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 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount of
the outstanding Debt Securities (or, if such Debt Securities are held by the
Trust or a trustee of the Trust, more than 10% in liquidation amount of the
outstanding Capital Securities), 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.

    
      
        
        

      

      
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    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 or bad faith, except that:

     

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

     

    (i) 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

     

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

     

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

     

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

     

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

     

    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.

    
      
        
        

      

      
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    Section
6.02 Reliance on Documents,
Opinions, etc.

     

    Except as
otherwise provided in Section 6.01:

     

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

     

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

     

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

     

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

     

    (e) the
Trustee shall not be liable for any action taken or omitted by it in good faith
and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the occurrence of an
Event of Default with respect to the Debt Securities (which 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 a
majority in aggregate principal amount of the outstanding Debt Securities
affected thereby; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expense or liability as a condition to so
proceeding; and

     

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

    
      
        
        

      

      
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    Section
6.03 No Responsibility for
Recitals, etc.

     

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

     

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

     

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

     

    Section
6.05 Moneys to be Held in
Trust.

     

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

     

    Section
6.06 Compensation and Expenses of
Trustee.

     

    The
Company covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as shall be agreed to in writing
between the Company and the Trustee (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust), and the
Company will pay or reimburse the Trustee upon its written request for all
documented reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance that arises from its
negligence, willful misconduct or bad faith.  The Company also
covenants to indemnify each of the Trustee (including in its individual
capacity) and any predecessor Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense including taxes (other than taxes based on the
income of the Trustee), except to the extent such loss, damage, claim, liability
or expense results from the negligence, willful misconduct or bad faith of such

    
      
        
        

      

      
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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 to compensate and indemnify the Trustee and to pay or reimburse the
Trustee for documented expenses, disbursements and advances shall constitute
additional indebtedness hereunder.

    

     

    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 clause (e), (f), (g), (h) or (i) of Section 5.01, the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.

     

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

     

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

     

    Section
6.07 Officers’ Certificate as
Evidence.

     

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

     

    Section
6.08 Eligibility of
Trustee.

     

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

    
      
        
        

      

      
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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, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.09.

     

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

     

    Section
6.09 Resignation or Removal of
Trustee.

     

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

     

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

     

    (i) 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;

     

    (ii) 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

     

    (iii) 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,

    
      
        
        

      

      
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     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 (i), (ii) or (iii) 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, may petition any court of competent jurisdiction
for an appointment of a successor.

     

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

     

    Section
6.10 Acceptance by Successor
Trustee.

     

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

     

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

    
      
        
        

      

      
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    In no
event shall a retiring Trustee be liable for the acts or omissions of any
successor Trustee hereunder.

     

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

     

    Section
6.11 Succession by Merger,
etc.

     

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

     

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

     

    Section
6.12 Authenticating
Agents.

     

    There may
be one or more Authenticating Agents appointed by the Trustee upon the request
of the Company with power to act on its behalf and subject to its direction in
the authentication and delivery of Debt Securities issued upon exchange or
registration of transfer thereof as fully to all intents and purposes as though
any such Authenticating Agent had been expressly authorized to authenticate and
deliver Debt Securities; provided, however, 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
corporation organized and doing business under the laws of the United States or
of any state 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 or District of Columbia authority.  If such corporation
publishes reports of condition at least annually pursuant to law or the
requirements of such authority, then for the purposes of this Section the
combined 

    
      
        
        

      

      
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capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.  If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect herein specified in this
Section.

    

     

    Any
corporation into which any Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
consolidation or conversion to which any Authenticating Agent shall be a party,
or any corporation succeeding to all or substantially all of the corporate trust
business of any Authenticating Agent, shall be the successor of such
Authenticating Agent hereunder, if such successor corporation is otherwise
eligible under this Section 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, the Trustee may, and upon the request
of the Company shall, promptly appoint a successor Authenticating Agent eligible
under this Section, 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 of its predecessor hereunder, with like effect as if originally
named as Authenticating Agent herein.

     

    The
Company agrees to pay to any Authenticating Agent from time to time reasonable
compensation for its services.  Any Authenticating Agent shall have no
responsibility or liability for any action taken by it as such in accordance
with the directions of the Trustee.

     

    ARTICLE
VII

     

    CONCERNING
THE SECURITYHOLDERS

     

    Section
7.01 Action by
Securityholders.

     

    Whenever
in this Indenture it is provided that the holders of a specified percentage in
aggregate principal amount of the Debt Securities 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 

    
      
        
        

      

      
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instruments
and any such record of such a meeting of such Securityholders or holders of
Capital Securities, as the case may be, or (d) by any other method the Trustee
deems satisfactory.

    

     

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

     

    Section
7.02 Proof of Execution by
Securityholders.

     

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

     

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

     

    Section
7.03 Who Are Deemed Absolute
Owners.

     

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

    
      
        
        

      

      
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    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 request, demand, authorization, direction,
notice, consent or waiver under this Indenture, Debt Securities which are owned
by the Company or any other obligor on the Debt Securities or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company (other than the Trust) or any other obligor on
the Debt Securities shall be disregarded and deemed not to be outstanding for
the purpose of any such determination, provided, that for
the purposes of determining whether the Trustee shall be protected in relying on
any such request, demand, authorization, direction, notice, 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 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee’s right to vote such Debt Securities and that the pledgee is
not the Company or any such other obligor or Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor.  In the case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.

     

    Section
7.05 Revocation of Consents;
Future Holders Bound.

     

    At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debt Securities specified in this Indenture in
connection with such action, any holder (in cases where no record date has been
set pursuant to Section 7.01) or any holder as of an applicable record date (in
cases where a record date has been set pursuant to Section 7.01) of a Debt
Security (or any Debt Security issued in whole or in part in exchange or
substitution therefor) the serial number 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:

    
      
        
        

      

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

     

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

     

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

     

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

     

    Section
8.02 Call of Meetings by
Trustee.

     

    The
Trustee may at any time call a meeting of Securityholders to take any action
specified in Section 8.01, to be held at such time and at such place in The City
of New York, the Borough of Manhattan, or 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
Providence, Rhode Island 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 or (b) a Person appointed by an instrument
in writing as proxy by a holder of one or more 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.

    
      
        
        

      

      
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    Section
8.05 Regulations.

     

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

     

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

     

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

     

    Section
8.06 Voting.

     

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

    
      
        
        

      

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

     

    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.

    
      
        
        

      

      
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    ARTICLE
IX

     

    SUPPLEMENTAL
INDENTURES

     

    Section
9.01 Supplemental Indentures
without Consent of Securityholders.

     

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

     

    (a) to
evidence the succession of another corporation to the Company, or successive
successions, and the assumption by the successor corporation of the covenants,
agreements and obligations of the Company, pursuant to Article XI
hereof.  It being understood that, such supplemental indenture, unless
otherwise proposed by the Company, may modify only those provisions of the
Indenture related to the identity, address or other contact information of the
Company and leave all other provisions of the Indenture unchanged;

     

    (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 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 then outstanding;

     

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

     

    (e) to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Debt Securities and to add to or change any of the

    
      
        
        

      

      
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provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 6.10;

    

     

    (f) to make
any change (other than as elsewhere provided in this Section) 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 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 a majority in
aggregate principal amount of the Debt Securities at the time outstanding
affected by such supplemental indenture, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act, then in effect, applicable to indentures
qualified thereunder) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Debt Securities; provided, however, that no such
supplemental indenture shall, without 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 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 (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 the trustee of the Trust, such
supplemental indenture shall not be effective until the holders of a majority in
aggregate liquidation amount of the outstanding Capital Securities shall have
consented to such supplemental indenture; provided, further, that if the
consent of the Securityholder of each 

    
      
        
        

      

      
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outstanding
Debt Security is required, such supplemental indenture shall not be effective
until each holder of the outstanding Capital Securities shall have consented to
such supplemental indenture.

    

     

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

     

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

     

    It shall
not be necessary for the consent of the Securityholders under this Section 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.

    
      
        
        

      

      
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    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 as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article IX.  The Trustee shall
also receive an Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant to this Article IX is authorized or permitted by,
and conforms to, the terms of this Article IX and that it is proper for the
Trustee under the provisions of this Article IX to join in the execution
thereof.

     

    ARTICLE
X

     

    REDEMPTION
OF SECURITIES

     

    Section
10.01 Optional
Redemption.

     

    The
Company shall have the right, subject to the receipt by the Company of the prior
approval from the Federal Reserve, if then required under applicable capital
guidelines or policies of the Federal Reserve, to redeem the Debt Securities, in
whole or (provided that all accrued and unpaid interest has been paid on all
Debt Securities for all Interest Periods terminating on or prior to such date)
from time to time in part, on any Interest Payment Date on or after June 15,
2013 (each, an “Optional Redemption Date”), at the Optional Redemption
Price.

     

    Section
10.02 Special Event
Redemption.

     

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

     

    Section
10.03 Notice of Redemption;
Selection of Debt Securities.

     

    In case
the Company shall desire to exercise the right to redeem all, or, as the case
may be, any part of the Debt Securities, it shall fix a date for redemption and
shall mail, 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 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, 

    
      
        
        

      

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

    

     

    Prior to
10:00 a.m., New York City time, on the Optional 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 such date all the Debt
Securities so called for redemption at the applicable price therefor, together
with unpaid interest accrued to such date.

     

    The
Company will give the Trustee notice not less than 45 nor more than 75 days
prior to the date fixed for redemption as to the price at which the Debt
Securities are to be redeemed and the aggregate principal amount of Debt
Securities to be redeemed and the Trustee shall select, in such manner as in its
sole discretion it shall deem appropriate and fair, the Debt Securities or
portions thereof (in integral multiples of $1,000) to be redeemed.

     

    Section
10.04 Payment of Debt Securities
Called for Redemption.

     

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

     

    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.

    
      
        
        

      

      
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    ARTICLE
XI

     

    CONSOLIDATION,
MERGER, SALE, CONVEYANCE AND LEASE

     

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

     

    Nothing
contained in this Indenture or in the Debt Securities shall prevent any
consolidation or merger of the Company with or into any other corporation or
corporations (whether or not affiliated with the Company) or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party or parties, or shall prevent any sale, conveyance, transfer or
other disposition of all or substantially all of the property or capital stock
of the Company or its successor or successors to any other corporation (whether
or not affiliated with the Company or its successor or successors) authorized to
acquire and operate the same; provided, however, that the
Company hereby covenants and agrees that (i) upon any such consolidation,
merger (where the Company is not the surviving corporation), sale, conveyance,
transfer or other disposition, the successor entity shall be a corporation
organized and existing under the laws of the United States or any state thereof
or the District of Columbia (unless such corporation has (1) agreed to make all
payments due in respect of the Debt Securities or, if outstanding, the Trust
Securities and the Capital Securities Guarantee without withholding or deduction
for, or on account of, any taxes, duties, assessments or other governmental
charges under the laws or regulations of the jurisdiction of organization or
residence (for tax purposes) 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 Trust Securities, as the case may be, after payment of all
taxes (including withholding taxes), duties, assessments or other governmental
charges, will be equal to the amounts that such holders would have received and
retained had no such taxes (including withholding taxes), duties, assessments or
other governmental charges been imposed, (2) irrevocably and unconditionally
consented and submitted to the jurisdiction of any United States federal court
or New York state court, in each case located in the Borough of Manhattan, The
City of New York, 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 corporation, 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

    
      
        
        

      

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

    

     

    Section
11.03 Opinion of Counsel to be
Given to Trustee.

     

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

     

    ARTICLE
XII

     

    SATISFACTION
AND DISCHARGE OF INDENTURE

     

    Section
12.01 Discharge of
Indenture.

     

    When (a)
the Company shall deliver to the Trustee for cancellation all Debt Securities
theretofore authenticated (other than any Debt Securities which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.06) and not theretofore canceled, or (b) all the Debt Securities
not theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds, which shall be
immediately due and payable, sufficient to pay at maturity or upon redemption
all of the Debt Securities (other than any Debt Securities which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.06) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, as the case may be, but excluding, however, the amount of any
moneys for the payment of principal of and premium, if any, or interest on the
Debt Securities (1) theretofore repaid to the Company in accordance with the
provisions of Section 12.04, or (2) paid to any state or to the District of

    
      
        
        

      

      
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Columbia
pursuant to its unclaimed property or similar laws, and if in the case of either
clause (a) or (b) above the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, then this Indenture shall cease to be of
further effect except for the provisions of Sections 2.05, 2.06, 3.01, 3.02,
3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such Debt
Securities shall mature or are redeemed, as the case may be, and are paid in
full.  Thereafter, Sections 6.06, 6.09 and 12.04 shall survive, and
the Trustee, on demand of the Company accompanied by an Officers’ Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with, and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging this Indenture,
the Company, however, hereby agreeing to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Debt Securities.

    

     

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

     

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

    
      
        
        

      

      
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    ARTICLE
XIII

     

    IMMUNITY
OF INCORPORATORS, STOCKHOLDERS,

     

    OFFICERS
AND DIRECTORS

     

    Section
13.01 Indenture and Debt
Securities Solely Corporate Obligations.

     

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

     

    ARTICLE
XIV

     

    MISCELLANEOUS
PROVISIONS

     

    Section
14.01 Successors.

     

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

     

    Section
14.02 Official Acts by Successor
Entity.

     

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

     

    Section
14.03 Surrender of Company
Powers.

     

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

     

    Section
14.04 Addresses for Notices,
etc.

     

    Any
notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Securityholders on the
Company may be given or served in writing by being deposited postage prepaid by
registered or certified mail in a post office letter box addressed (until
another address is filed by the Company with the Trustee for such purpose) to
the Company at 23 Broad Street, Westerly, Rhode Island 02891, Attention: David
V. Devault, Chief Financial Officer.  Any notice, direction, request
or demand by any 

    
      
        
        

      

      
        57

        
          

        

      

      
        
        
Securityholder
or the Company to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the office of
Wilmington Trust Company at Rodney Square North, 1100 North Market Street,
Wilmington, DE 19890-0001, Attention: Corporate Capital
Markets.

    

     

    Section
14.05 Governing
Law.

     

    This
Indenture and the Debt Securities shall each be governed by, and construed in
accordance with, the laws of the State of New York, 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).

     

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

     

    Section
14.07 Business Day
Convention.

     

    Notwithstanding
anything to the contrary contained herein, if any Interest Payment Date, other
than the Maturity Date, any Optional 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 Optional
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.

    
      
        
        

      

      
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    Section
14.08 Table of Contents, Headings,
etc.

     

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

     

    Section
14.09 Execution in
Counterparts.

     

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

     

    Section
14.10 Separability.

     

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

     

    Section
14.11 Assignment.

     

    Subject
to Article XI, the Company will have the right at all times to assign any of its
rights or obligations under this Indenture and the Debt Securities to a direct
or indirect wholly owned Subsidiary of the Company; provided, 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 a trustee of the Trust, if such 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 aggregate liquidation amount of
the outstanding Capital Securities of the Trust have so directed in writing such
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 trustee’s rights under this Indenture without first
instituting any legal proceedings against such 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, on or principal of the Debt
Securities on the date such interest, premium, if any, or principal is otherwise
due and payable (or, in the case of redemption, on the related Optional
Redemption Date or the Special Redemption Date (as the case may be)), the
Company acknowledges that a holder of outstanding 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 

    
      
        
        

      

      
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holder on
or after the respective due date (or Optional Redemption Date or Special
Redemption Date (as the case may be)) specified in the Debt
Securities.

    

     

    ARTICLE
XV

     

    SUBORDINATION
OF DEBT SECURITIES

     

    Section
15.01 Agreement to
Subordinate.

     

    The
Company covenants and agrees, and each holder of Debt Securities issued
hereunder and under any supplemental indenture (the “Additional Provisions”) by
such holder’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 amount 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 or any Securityholder when such payment is prohibited by the preceding
paragraph of this Section, 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 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, 

    
      
        
        

      

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

    

     

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

     

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

    
      
        
        

      

      
        61

        
          

        

      

      
        
        
consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article XI
of this Indenture.  Nothing in Section 15.02 or in this Section 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.

    
      
        
        

      

      
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    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 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 

    
      
        
        

      

      
        63

        
          

        

      

      
        
        
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 or any other Person.

     

    
      
        
           

        

         

      

      
        64

        
          

        

      

      
         

      

    

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

     

    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.

     

    WASHINGTON
TRUST BANCORP, INC.

     

    By:  /s/ David V. Devault                                                                          

    Name:
David V. Devault

    Title:

     

    WILMINGTON
TRUST COMPANY,

    as Trustee

     

    By:  /s/ W. Thomas Morris,
II              

    Name: W.
Thomas Morris, II

    Title:

    
      
        
           

           

        

         

      

      
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    EXHIBIT
A

     

    FORM OF
DEBT SECURITY

     

    [FORM OF
FACE OF SECURITY]

     

    [THIS
SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE
OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

     

    UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO 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.]1

     

    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 OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i)
ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH 

    

      

    

      
      1 Only
applicable if this Debt Security is a Global Debt
Security.

    

    
      
        
           

           

        

         

      

      
        
        

        
          

        

      

      
         

      

    
THE
COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT) OF
THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION
(OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE COMPANY OR
ITS SUBSIDIARY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER”, AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION 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, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT,
SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) ABOVE 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 OR ANY INTEREST OR PARTICIPATION
HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

     

    THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION HEREIN, 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

     

    
      
        A-2

      

      
        
        

        
          

        

      

      
        
        
THIS
SECURITY OR SUCH INTEREST OR PARTICIPATION 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 OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

    

     

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

     

    THIS
SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF
$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF.  ANY ATTEMPTED
TRANSFER OF THIS SECURITY IN DENOMINATIONS 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 OR ANY INTEREST OR
PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

     

    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 THE DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.

     

    
      
        A-3

      

      
        
        

        
          

        

      

      
        
        
Floating
Rate Junior Subordinated Debt Security due 2038

    

     

    of

    WASHINGTON
TRUST BANCORP, INC.

     

    Washington
Trust Bancorp, Inc., a bank holding company incorporated in the State of Rhode
Island (the “Company”, which term includes any successor permitted under the
Indenture (as defined herein)), for value received, promises to pay to
Wilmington Trust Company, not in its individual capacity but solely as
Institutional Trustee for Washington Preferred Capital Trust, a Delaware
statutory trust, or registered assigns, the principal amount of ______________
Dollars ($______________) on June 15, 2038 (the “Maturity Date”) (or any
Optional Redemption Date or the Special Redemption Date, each as defined herein,
or any earlier date of acceleration of the maturity of this Debt Security), and
to pay interest on the outstanding principal amount of this Debt Security from
April 7, 2008, or from the most recent Interest Payment Date (as defined below)
to which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on March 15, June 15, September 15, and
December 15 of each year, commencing on June 15, 2008 (each, an “Interest
Payment Date”), at a rate per annum, which, with respect to any Interest Period
(as defined in the Indenture), will be equal to LIBOR (as defined in the
Indenture), as determined on the LIBOR Determination Date (as defined in the
Indenture) for such Interest Period (or, in the case of the first Interest
Period, will be 2.72750%), plus 3.50% (the “Interest Rate”) (provided that the
Interest Rate for any Interest Period may not exceed the highest rate permitted
by New York law, as the same may be modified by United States law of general
application) until the principal hereof shall have been paid or duly provided
for, 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 then applicable
Interest Rate, compounded quarterly.  The amount of interest payable
for any Interest Period shall be computed on the basis of a 360-day year and the
actual number of days elapsed in such Interest Period.

     

    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 the Indenture) is registered at the close of business on the
“regular record date” for such interest installment, which shall be the
fifteenth day prior to such Interest Payment Date, whether or not such day is a
Business Day (as defined herein).  Any such interest installment
(other than Deferred Interest (as defined herein)) not punctually paid or duly
provided for shall forthwith cease to be payable to the holders on such regular
record date and may be paid to the Person in whose name this Debt Security (or
one or more Predecessor 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 holders of the Debt Securities
not less than 10 days prior to such special record date, all as more fully
provided in the Indenture.

     

    Payment
of the principal of and premium, if any, and interest on this Debt Security due
on the Maturity Date, any Optional Redemption Date or the Special Redemption
Date, as the case may be, shall be made in immediately available funds against
presentation and surrender of this Debt Security at the office or agency of the
Trustee maintained for that purpose 

     

    
      
        A-4

      

      
        
        

        
          

        

      

      
        
        
in
Wilmington, Delaware, or at the office or agency of any other Paying Agent
appointed by the Company maintained for that purpose in Wilmington, Delaware or
Providence, Rhode Island.  Payment of interest on this Debt Security
due on any Interest Payment Date other than the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be, shall be
made at the option of the Company by check mailed to the holder thereof 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, 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.

    

     

    Notwithstanding
anything to the contrary contained herein, if any Interest Payment Date, other
than the Maturity Date, any Optional 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 Optional
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.

     

    So long
as no Event of Default pursuant to Sections 5.01(b), (e), (f), (g), (h) or (i)
of the Indenture has occurred and is continuing, the Company shall have the
right, from time to time and without causing an Event of Default, to defer
payments of interest on the Debt Securities by extending the interest payment
period on the Debt Securities at any time and from time to time during the term
of the Debt Securities, for up to 20 consecutive quarterly periods (each such
extended interest payment period, together with all previous and further
consecutive extensions thereof, is referred to herein as an “Extension
Period”).  No Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may
be.  During any Extension Period, interest will continue to accrue on
the Debt Securities, and interest on such accrued interest (such accrued
interest and interest thereon referred to herein as “Deferred Interest”) will
accrue at an annual rate equal to the Interest Rate 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 applicable law.  No interest or Deferred Interest (except
any Additional Amounts (as defined in the Indenture) that may be due and
payable) shall be due and payable during an Extension Period, except at the end
thereof.  At the end of any Extension Period, the Company shall pay
all Deferred Interest then accrued and unpaid on the Debt Securities; provided, however, that during
any Extension Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s capital stock, (ii) make any payment 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 

     

    
      
        A-5

      

      
        
        

        
          

        

      

      
        
        
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 such Extension
Period, (b) as a result of any exchange or conversion of any class or series of
the Company’s capital stock (or any capital stock of a subsidiary of the
Company) for any class or series of the Company’s capital stock or of any class
or series of the Company’s indebtedness for any class or series of the Company’s
capital stock, (c) the purchase of fractional interests in shares of the
Company’s capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholder’s rights plan, or
the issuance of rights, stock or other property under any stockholder’s rights
plan, or the redemption or repurchase of rights pursuant thereto or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with
or junior to such stock).  Prior to the termination of any Extension
Period, the Company may further extend such Extension Period, provided, that no
Extension Period (including all previous and further consecutive extensions that
are part of such Extension Period) shall exceed 20 consecutive quarterly
periods.  Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Company may commence a new Extension
Period, subject to the foregoing requirements.  The Company must give
the Trustee notice of its election to begin or extend an Extension Period no
later than the close of business on the fifteenth Business Day prior to the
applicable Interest Payment Date.

    

     

    The
indebtedness evidenced by this Debt Security is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness (as defined in the Indenture), 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.

     

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

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          A-7

        

         

      

      
         

        
          

        

      

      
         

      

    

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

     

    WASHINGTON
TRUST BANCORP, INC.

     

    By:          _____________________________

    Name:

    Title:

     

    Dated:  ______________________,
____

     

    CERTIFICATE
OF AUTHENTICATION

     

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

     

     

    WILMINGTON
TRUST COMPANY,

    not in
its individual capacity but solely as

    the
Trustee

     

    By:       _____________________________

    Authorized
Officer

     

    Dated:  ______________________,
____

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
          A-8

        

         

      

      
         

        
          

        

      

      
         

      

    

    [FORM OF
REVERSE OF SECURITY]

     

    This Debt
Security is one of a duly authorized series of debt securities of the Company
(collectively, the “Debt Securities”), all issued or to be issued pursuant to an
Indenture (the “Indenture”), dated as of April 7, 2008, duly executed and
delivered between the Company and Wilmington Trust Company, as Trustee (the
“Trustee”), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debt Securities of which this Debt Security is a
part.

     

    Upon the
occurrence and continuation of a Tax Event, an Investment Company Event or a
Capital Treatment Event (each, a “Special Event”), the Company shall have the
right to redeem this Debt Security, at its option, in whole with all other Debt
Securities but not in part, at any time, within 90 days following the occurrence
of such Special Event (the “Special Redemption Date”), at the Special Redemption
Price (as defined herein).

     

    The
Company shall also have the right to redeem this Debt Security at its option, in
whole or (provided that all accrued and unpaid interest has been paid on all
Debt Securities for all Interest Periods terminating on or prior to such date)
from time to time in part, on any Interest Payment Date on or after June 15,
2013 (each, an “Optional Redemption Date”), at the Optional Redemption Price (as
defined herein).

     

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

     

    “Optional
Redemption Price” means an amount in cash equal to 100% of the principal amount
of this Debt Security being redeemed plus unpaid interest accrued thereon to the
related Optional Redemption Date.

     

    “Special
Redemption Price” means, with respect to the redemption of this Debt Security
following a Special Event, an amount in cash equal to 103.10% of the principal
amount of this Debt Security to be redeemed prior to June 15, 2009 and
thereafter equal to the percentage of the principal amount of this Debt Security
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 June
      15,

            	
              Percentage of
      Principal Amount

            
	
              2009

            	
              102.48%

            
	
              2010

            	
              101.86%

            
	
              2011

            	
              101.24%

            
	
              2012

            	
              100.62%

            
	
              2013
      and thereafter

            	
              100.00%

            

    

    

     

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

     

    The
Indenture contains provisions permitting the Company and the Trustee, with the
consent of the holders of 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 United States Dollars, or impair or affect the right of any holder to
institute suit for 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 the holders of all 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 holder of this Debt Security (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon 

     

    
      
        A-10

      

      
        
        

        
          

        

      

      
        
        
all
future holders and owners of this Debt Security and of any Debt Security issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debt Security.

    

     

    No
reference herein to the Indenture and no provision of this Debt Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to make 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 holder hereof on the Debt
Security Register (as defined in the Indenture) of the Company, upon surrender
of this Debt Security for registration of transfer at the office or agency of
the Trustee in Wilmington, Delaware, or at any other office or agency of the
Company in Wilmington, Delaware or Providence, Rhode Island, accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the 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 or the Trustee may require payment of a sum sufficient to cover any tax,
fee or other governmental charge payable in relation thereto as specified in the
Indenture.

     

    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 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 none of the Company, the Trustee,
any Authenticating Agent, any Paying Agent, any transfer agent or any Debt
Security registrar shall be affected by any notice to the contrary.

     

    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 different authorized denominations, as requested by
the holder surrendering the same.

     

    The Debt
Securities are issuable only in registered certificated form without
coupons.

     

    No
recourse shall be had for the payment of the principal of or premium, if any, or
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, director, employee or agent, past, present
or future, as such, of the Company or of any predecessor or 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,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and
released.

     

    
      
        A-11

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    All terms
used but not defined in this Debt Security shall have the meanings assigned to
them in the Indenture.

     

    THIS DEBT
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SAID STATE
OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          A-12

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
B

     

    

     

    FORM OF
CERTIFICATE OF OFFICER OF THE COMPANY

     

    

     

    Pursuant
to Section 3.05 of the Indenture, dated as of April 7, 2008 (as amended or
supplemented from time to time, the “Indenture”), between Washington Trust
Bancorp, Inc., as issuer (the “Company”), and Wilmington Trust Company, as
trustee, the undersigned certifies that he/she is a [principal executive
officer, principal financial officer or principal accounting officer] of the
Company and in the course of the performance by the undersigned of his/her
duties as an officer of the Company, the undersigned would normally have
knowledge of any default by the Company in the performance of any covenants
contained in the Indenture, and the undersigned hereby further certifies that
he/she has no knowledge of any default for the fiscal year ending on __________,
20___ [, except as follows: specify each such default and the
nature thereof].

     

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

     

    IN
WITNESS WHEREOF, the undersigned has executed this Certificate as
of

     

    ____________,
20____.

     

    

     

    _________________________________

    Name:

    Title:

     

    
      
        
          B-1

        

         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
10.3

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    GUARANTEE
AGREEMENT

     

    WASHINGTON
TRUST BANCORP, INC.

     

    Dated as
of April 7, 2008

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    
      	 	 	Page
	ARTICLE
      I
	
              DEFINITIONS
      AND INTERPRETATION

            
	
              SECTION
      1.1

            	
              Definitions
      and Interpretation

            	
              2

            
	 	 	 
	
              ARTICLE
      II

            
	
              POWERS,
      DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

            
	
              SECTION
      2.1

            	
              Powers
      and Duties of the Guarantee Trustee

            	
              9

            
	
              SECTION
      2.2

            	
              Certain
      Rights of the Guarantee Trustee

            	
              12

            
	
              SECTION
      2.3

            	
              Not
      Responsible for Recitals or Issuance of Guarantee

            	
              17

            
	
              SECTION
      2.4

            	
              Events
      of Default; Waiver

            	
              17

            
	
              SECTION
      2.5

            	
              Events
      of Default; Notice

            	
              18

            
	 	 	 
	
              ARTICLE
      III

            
	
              THE
      GUARANTEE TRUSTEE

            
	
              SECTION
      3.1

            	
              The
      Guarantee Trustee; Eligibility

            	
              19

            
	
              SECTION
      3.2

            	
              Appointment,
      Removal and Resignation of the Guarantee Trustee

            	
              20

            
	 	 	 
	
              ARTICLE
      IV

            
	
              GUARANTEE

            
	
              SECTION
      4.1

            	
              Guarantee

            	
              22

            
	
              SECTION
      4.2

            	
              Waiver
      of Notice and Demand

            	
              23

            
	
              SECTION
      4.3

            	
              Obligations
      Not Affected

            	
              23

            
	
              SECTION
      4.4

            	
              Rights
      of Holders

            	
              25

            
	
              SECTION
      4.5

            	
              Guarantee
      of Payment

            	
              26

            
	
              SECTION
      4.6

            	
              Subrogation

            	
              26

            
	
              SECTION
      4.7

            	
              Independent
      Obligations

            	
              27

            
	
              SECTION
      4.8

            	
              Enforcement

            	
              27

            
	 	 	 
	
              ARTICLE
      V

            
	
              LIMITATION
      OF TRANSACTIONS; SUBORDINATION

            
	
              SECTION
      5.1

            	
              Limitation
      of Transactions

            	
              28

            
	
              SECTION
      5.2

            	
              Ranking

            	
              30

            

    

     

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              ARTICLE
      VI

            
	
              TERMINATION

            
	
              SECTION
      6.1

            	
              Termination

            	
              30

            
	 	 	 
	
              ARTICLE
      VII

            
	
              INDEMNIFICATION

            
	
              SECTION
      7.1

            	
              Exculpation

            	
              31

            
	
              SECTION
      7.2

            	
              Indemnification

            	
              32

            
	
              SECTION
      7.3

            	
              Compensation;
      Reimbursement of Expenses

            	
              34

            
	 	 	 
	
              ARTICLE
      VIII

            
	
              MISCELLANEOUS

            
	
              SECTION
      8.1

            	
              Successors
      and Assigns

            	
              35

            
	
              SECTION
      8.2

            	
              Amendments

            	
              36

            
	
              SECTION
      8.3

            	
              Notices

            	
              36

            
	
              SECTION
      8.4

            	
              Benefit

            	
              38

            
	
              SECTION
      8.5

            	
              Governing
      Law

            	
              38

            
	
              SECTION
      8.6

            	
              Counterparts

            	
              38

            

    

    

    
      
        
           

        

         

      

      
        ii

        
          

        

      

      
         

      

    

    GUARANTEE
AGREEMENT

     

    This
GUARANTEE AGREEMENT (the “Guarantee”), dated as of April 7, 2008, is executed
and delivered by Washington Trust Bancorp, Inc., a bank holding company
incorporated in the State of Rhode Island (the “Guarantor”), and Wilmington
Trust Company, a Delaware banking corporation, 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 Washington Preferred Capital
Trust, a Delaware statutory trust (the “Issuer”).

     

    WHEREAS,
pursuant to an Amended and Restated Declaration of Trust (the “Declaration”),
dated as of April 7, 2008, among the trustees named therein of the Issuer,
Washington Trust 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
$10,000,000, designated in the Declaration as MMCapSSM (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.

     

    “Common
Securities” has the meaning specified in the Declaration.

     

    “Corporate
Trust Office”  means the office of the Guarantee 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 Guarantee shall be Rodney Square North,
1100 North Market Street, Wilmington, DE 19890-0001.

     

    “Covered
Person” means any Holder of Capital Securities.

     

    “Debenture
Issuer” means Washington Trust Bancorp, Inc. or any successor entity resulting
from any consolidation, amalgamation, merger or other business combination, in
its capacity as issuer of the Debentures.

     

    “Debentures”
means the junior subordinated debentures of the Debenture Issuer that are
designated in the Indenture as the “Floating Rate Junior Subordinated Debt
Securities due 2038” and 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 price payable upon the redemption
of any Capital Securities to the extent the Issuer has funds available in the
Property Account therefor at such time, with respect to any Capital Securities
that are (1) called for redemption by the Issuer or (2) mandatorily redeemed by
the Issuer, in each case, in accordance with the terms of such Capital
Securities, and (iii) 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 of the Capital Securities 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 Wilmington Trust Company, 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 Person in whose name any Capital Securities are registered on the
books and records of the Issuer; provided, however, that, in
determining whether the 

    
      
        
        

      

      
        2

        
          

        

      

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

     

    “Indenture”
means the Indenture, dated as of April 7, 2008, between the Debenture Issuer and
Wilmington Trust Company, 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 amount that would be paid upon the redemption, liquidation or
otherwise on the date upon which the voting percentages are determined, plus
unpaid Distributions accrued thereon to such date) 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 such 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 such officer in rendering the Officer’s Certificate;

     

    (c)           a
statement that 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 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, 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        
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 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.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (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 or bad faith, 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:

     

    (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 willful misconduct or 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 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:

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (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.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (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 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, 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        
waive any
past Event of Default and its consequences.  Upon such waiver, any
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 any
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 any 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 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 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by federal,
state or District of Columbia authority.  If such corporation or
national association publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority referred
to above, then, for the purposes of this Section 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).

     

    (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 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        
ither
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 defense of payment
by the Issuer), right of set-off or counterclaim that the Issuer may have or
assert.  The 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.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (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, the price payable upon the redemption of the Capital Securities,
the 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, the price
payable upon the redemption of the Capital Securities, the Liquidation
Distribution or other sums payable that results from the extension of any
interest payment period on the Debentures);

     

    (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;

     

    (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

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (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
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.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    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.  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 Beneficiaries and to pay over such amount to the
Beneficiaries.

     

    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) Debenture Issuer shall have
selected an Extension Period as provided in the Indenture 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, (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 in all respects pari passu with or junior in
interest to the Debentures or (z) make any payment under any guarantees of the
Guarantor that rank in all respects pari passu with or junior in
interest to this Guarantee (other than (i) 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 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        
applicable
Extension Period, (ii) as a result of any exchange or 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, (iii) 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,
(iv) 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 (v)
any dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with
or junior in interest to such stock).

    

     

    SECTION
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.

     

    ARTICLE
VI

     

    TERMINATION

     

    SECTION
6.1 Termination.

     

    This
Guarantee shall terminate as to the Capital Securities (i) upon full payment of
the price payable upon redemption 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.

     

    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 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        
incurred
by reason of such Indemnified Person’s negligence, willful misconduct or bad
faith 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, willful misconduct or bad faith 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 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, 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 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        
which are
different from or additional to those available to the Guarantor, (iii) the
Guarantor shall not have employed counsel reasonably 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 may participate at its expense in the defense of
any such action.  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 the negligence, willful misconduct or bad faith of the Guarantee
Trustee.

     

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

     

    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 a
Majority in liquidation amount of the Capital Securities.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    SECTION
8.2 Amendments.

     

    Except
with respect to any changes that do not adversely affect the powers,
preferences, rights or interests of Holders of the Capital Securities in any
material respect (in which case no approval or consent of Holders will be
required), this Guarantee may be amended only with the prior approval of the
Holders of 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): Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Capital Markets, Telecopy: 302-636-4140,
Telephone:  302-651-1000;

     

    (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): Washington Trust Bancorp, Inc., 23
Broad Street, Westerly, Rhode Island 02891, Attention: David V. Devault, Chief
Financial Officer, Telecopy: 401-348-1565, Telephone: 401-348-1319;
or

     

    (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 LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES OF SAID
STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      	 	WASHINGTON
      TRUST BANCORP, INC.,	 
	 	as
      Guarantor	 

    

     

    
      	
               

            	
              By:

            	/s/ David V.
      Devault         
      
	 	 	Name:
      David V. Devault
	 	 	Title:

    

     

    
      
        	 	WILMINGTON
      TRUST COMPANY,	 
	 	as
      Guarantee Trustee	 

      

       

      
        	
                 

              	
                By:

              	/s/ W. Thomas
      Morris, II   
 
	 	 	Name:
      W. Thomas Morris, II
	 	 	Title:

      

    

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    
Exhibit
10.4

    CAPITAL
SECURITY CERTIFICATE

     

     THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(“DTC”) OR A NOMINEE OF DTC.  THIS SECURITY IS EXCHANGEABLE FOR
CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION, AND NO
TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN THE CIRCUMSTANCES SPECIFIED IN THE
DECLARATION.

     

    UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE TRUST
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO 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.

     

    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 OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i)
ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF
AND (Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN
RULE 405 UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY
OR SUCH INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH
LATER DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE
LAW, ONLY (A) TO THE DEBENTURE ISSUER OR ITS SUBSIDIARY OR THE TRUST, (B)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE
HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER,” AS DEFINED IN
RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),
(3), (7) OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY OR SUCH INTEREST OR PARTICIPATION 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, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES
ACT, (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, SUBJECT TO THE RIGHT OF THE DEBENTURE ISSUER AND THE TRUST PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUER
OR THE TRUST.  THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

    

     

    THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION HEREIN, 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 OR SUCH INTEREST OR PARTICIPATION 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 OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, 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 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        
EMPLOYEE
BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY
EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE
AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

    

     

    IN
CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE
REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

     

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

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Certificate
Number  P-1 (Rule
144A)                                                                Number
of Capital Securities 10,000

     

    CUSIP NO
940610 AA 6

     

    Certificate
Evidencing Capital Securities

     

    of

     

    WASHINGTON
PREFERRED CAPITAL TRUST

     

    Capital
Securities

     

    (liquidation
amount $1,000 per Capital Security)

     

    Washington
Preferred Capital Trust, a statutory trust created under the laws of the State
of Delaware (the “Trust”), hereby certifies that Cede & Co. is the
registered owner (the “Holder”) of 10,000 capital securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
designated as MMCapSSM
(liquidation amount $1,000 per Capital Security) (the “Capital
Securities”).  Subject to the Declaration (as defined below), the
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this Certificate duly
endorsed and in proper form for transfer.  The Capital Securities
represented hereby are issued pursuant to, and the designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Capital Securities shall in all respects be subject to, the provisions of the
Amended and Restated Declaration of Trust of the Trust, dated as of April 7,
2008, among David V. Devault, John F. Treanor and Mark K. W. Gim, as
Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional Trustee, Washington Trust Bancorp, Inc., as Sponsor,
and the holders from time to time of undivided beneficial interests in the
assets of the Trust, including the designation of the terms of the Capital
Securities as set forth in Annex I to the Declaration, as the same may be
amended from time to time (the “Declaration”). Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration.  The
Holder is entitled to the benefits of the Guarantee and the Indenture to the
extent provided therein.  The Sponsor will provide a copy of the
Declaration, the Guarantee, and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business.

     

    The
aggregate liquidation amount of the Capital Securities represented by this
Global Capital Security may from time to time be reduced to reflect transfers or
redemptions of all or a portion of such Capital Securities or cancellations of
all or a portion of such Capital Securities, in each case, and in any such case,
by means of notations on the Global Certificate Transfer Schedule on the last
page hereof. Notwithstanding any provisions of this Global Capital Security to
the contrary, transfers or redemptions of all or a portion of the Capital
Securities represented hereby and cancellations of all or a portion of the
Capital Securities represented hereby, may be effected without the surrendering
of this Global Capital Security, provided the appropriate notations on the
Global Certificate Transfer Schedule are made by the Institutional Trustee or
the Depositary at the direction of the Institutional Trustee, to reflect the
appropriate reduction or increase, as the case may be, in the aggregate
liquidation amount of the Capital Securities evidenced by this Global Capital
Security.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

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

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

     

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

     

    This
Certificate may contain more than one counterpart of the signature page and this
Certificate may be executed and authenticated by the affixing of the signature
of an Administrator on behalf of the Trust, and the signature of the
Institutional Trustee providing authentication, to any of such counterpart
signature pages.  All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though the
Trust had executed, and the Institutional Trustee had authenticated, a single
signature page.

     

     

     

     

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

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

     

    
      	
               
      

            	
              WASHINGTON
      PREFERRED CAPITAL TRUST

            

    

     

    
      	
               
      

            	
              By:
      /s/ David V.
      Devault                                
      

            

    

    
      	
               
      

            	
              Name:
      David V. Devault

            

    

    
      	
               
      

            	
              Title:
      Administrator

            

    

     

    
      	
               
      

            	
              Dated:
      __________________________

            

    

     

    CERTIFICATE
OF AUTHENTICATION

     

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

     

    
      	
               
      

            	
              WILMINGTON
      TRUST COMPANY,

            

    

    not in
its individual capacity but solely as the Institutional Trustee

     

    
      	
               
      

            	
              By:
      /s/ W. Thomas Morris,
      II                         

            

    

    
      	
               
      

            	
              Authorized
      Officer

            

    

     

    
      	
               
      

            	
              Dated:
      ___________________________

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     REVERSE
OF SECURITY

     

    Distributions
payable on each Capital Security will be payable at a rate of interest per
annum, which, with respect to any Distribution Period, will be equal to LIBOR,
as determined on the LIBOR Determination Date for such Distribution Period (or,
in the case of the first Distribution Period, will be 2.72750%), plus 3.50% (the
“Coupon Rate”); provided, however, that the
Coupon Rate for any Distribution Period may not exceed the Interest Rate (as
defined in the Indenture) for the related Interest Period (as defined in the
Indenture).  Distributions in arrears for more than one Distribution
Period will bear interest thereon, compounded quarterly, at the applicable
Coupon Rate for each Distribution Period thereafter (to the extent permitted by
applicable law).  The term “Distributions”, as used herein, includes
cash Distributions, any such compounded Distributions and any Additional Amounts
payable on the Debentures, unless otherwise stated.  A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds legally available in the Property Account therefor.  The
amount of Distributions payable for any Distribution Period will be computed on
the basis of a 360-day year and the actual number of days elapsed in such
Distribution Period.

     

    Except as
otherwise described below, Distributions on the Capital Securities will be
cumulative, will accrue from the date of original issuance and will be payable
quarterly in arrears on March 15, June 15, September 15, and December 15 of each
year, commencing on June 15, 2008 (each, a “Distribution Payment Date”), and on
any earlier date of redemption, subject, in each case, to the Business Day
convention specified in the Declaration.  The Debenture Issuer has the
right under the Indenture to defer payments of interest on the Debentures by
extending the interest payment period for up to 20 consecutive quarterly periods
(each such extended interest payment period, together with all previous and
future consecutive extensions thereof, is referred to herein as an “Extension
Period”) at any time and from time to time on the Debentures, subject to the
conditions described below and in the Declaration and the
Indenture.  No Extension Period may end on a date other than a
Distribution Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may
be.  During any Extension Period, interest will continue to accrue on
the Debentures, and interest on such accrued interest (such accrued interest and
interest thereon referred to herein as “Deferred Interest”) will accrue, at an
annual rate equal to the Coupon Rate 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
applicable law.  At the end of any Extension Period, the Debenture
Issuer shall pay all Deferred Interest then accrued and unpaid on the
Debentures; provided, however, that prior
to the termination of any Extension Period, the Debenture Issuer may further
extend such Extension Period, provided, that no
Extension Period (including all previous and further consecutive extensions that
are part of such Extension Period) shall exceed 20 consecutive quarterly
periods.  Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Debenture Issuer may commence a new
Extension Period, subject to the requirements set forth herein and in the
Declaration and the Indenture.  No interest or Deferred Interest
(except any Additional Amounts that may be due and payable) 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.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    As a
consequence of any Extension Period, Distributions will be
deferred.  If Distributions are deferred, the Distributions due shall
be paid on the date that the related Extension Period terminates to Holders of
the Capital Securities as they appear on the books and records of the Trust on
the regular record date immediately preceding the Distribution Payment Date on
which such Extension Period terminates to the extent that the Trust has funds
legally available for the payment of such Distributions in the Property Account
of the Trust.

     

    The
Capital Securities shall be redeemable, and shall be entitled to the Liquidation
Distribution, as provided in the Declaration.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    ASSIGNMENT

     

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

     

    ____________________________

     

    ____________________________

     

    ____________________________

     

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

     

    ____________________________

     

    ____________________________

     

    ____________________________

     

    (Insert
address and zip code of assignee),

     

    and
irrevocably appoints
________________________________________________________

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

     

    Date:__________________

     

    Signature:__________________

     

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

     

    Signature
Guarantee:1 ____________________________

     

    

      

    

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

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Schedule
A

     

    Global
Certificate Transfer Schedule

     

    Changes
to Liquidation Amount of Global Capital Security

     

    

    
      	  

              Date

            	
              
                 

              

            	 Liquidation
      Amount of Capital Securities by which this Global Capital Security Is to
      Be Reduced or Increased	
              
                 

              

            	
              
                Remaining
      Liquidation Amount of the Global Capital Security (following decrease or
      increase)

              

            
	 
      	 
      	 
      

    

     

    Schedule
to be maintained by Institutional Trustee or Depositary in cooperation with
Institutional Trustee, as applicable.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    
Exhibit
10.5

    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 OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i)
ONE YEAR (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405
UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A)
TO THE COMPANY OR ITS SUBSIDIARY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER”, AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
“ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7)
OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION 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, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT,
SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) ABOVE 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 OR ANY INTEREST OR PARTICIPATION

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        
HEREIN,
BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL
COMPLY WITH THE FOREGOING RESTRICTIONS.

    

     

    THE
HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION HEREIN, 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 OR SUCH INTEREST OR PARTICIPATION 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 OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

     

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

     

    THIS
SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF
$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF.  ANY ATTEMPTED
TRANSFER OF THIS SECURITY IN DENOMINATIONS 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 OR ANY INTEREST OR
PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        
NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN.

    

     

    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 THE 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.

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    Floating
Rate Subordinated Debt Security due 2038

    of

    WASHINGTON
TRUST BANCORP, INC.

     

    Washington
Trust Bancorp, Inc., a bank holding company incorporated in the State of Rhode
Island (the “Company”, which term includes any successor permitted under the
Indenture (as defined herein)), for value received, promises to pay to
Wilmington Trust Company, not in its individual capacity but solely as
Institutional Trustee for Washington Preferred Capital Trust, a Delaware
statutory trust, or registered assigns, the principal amount of TEN MILLION
THREE HUNDRED TEN THOUSAND Dollars ($10,310,000) on June 15, 2038 (the “Maturity
Date”) (or any Optional Redemption Date or the Special Redemption Date, each as
defined herein, or any earlier date of acceleration of the maturity of this Debt
Security), and to pay interest on the outstanding principal amount of this Debt
Security from April 7, 2008, or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on March 15, June 15,
September 15, and December 15 of each year, commencing on June 15, 2008 (each,
an “Interest Payment Date”), at a rate per annum, which, with respect to any
Interest Period (as defined in the Indenture), will be equal to LIBOR (as
defined in the Indenture), as determined on the LIBOR Determination Date (as
defined in the Indenture) for such Interest Period (or, in the case of the first
Interest Period, will be 2.72750%), plus 3.50% (the “Interest Rate”) (provided that the
Interest Rate for any Interest Period may not exceed the highest rate permitted
by New York law, as the same may be modified by United States law of general
application) until the principal hereof shall have been paid or duly provided
for, 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 then applicable
Interest Rate, compounded quarterly.  The amount of interest payable
for any Interest Period shall be computed on the basis of a 360-day year and the
actual number of days elapsed in such Interest Period.

     

    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 the Indenture) is registered at the close of business on the
“regular record date” for such interest installment, which shall be the
fifteenth day prior to such Interest Payment Date, whether or not such day is a
Business Day (as defined herein).  Any such interest installment
(other than Deferred Interest (as defined herein)) not punctually paid or duly
provided for shall forthwith cease to be payable to the holders on such regular
record date and may be paid to the Person in whose name this Debt Security (or
one or more Predecessor 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 holders of the Debt Securities
not less than 10 days prior to such special record date, all as more fully
provided in the Indenture.

     

    Payment
of the principal of and premium, if any, and interest on this Debt Security due
on the Maturity Date, any Optional Redemption Date or the Special Redemption
Date, as the case may be, shall be made in immediately available funds against
presentation and 

    
      
        
        

      

      
        4

        
          

        

      

      
        
        
surrender
of this Debt Security at the office or agency of the Trustee maintained for that
purpose in Wilmington, Delaware, or at the office or agency of any other Paying
Agent appointed by the Company maintained for that purpose in Wilmington,
Delaware or Providence, Rhode Island.  Payment of interest on this
Debt Security due on any Interest Payment Date other than the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be,
shall be made at the option of the Company by check mailed to the holder thereof
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, 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.

    

     

    Notwithstanding
anything to the contrary contained herein, if any Interest Payment Date, other
than the Maturity Date, any Optional 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 Optional
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.

     

    So long
as no Event of Default pursuant to Sections 5.01(b), (e), (f), (g), (h) or (i)
of the Indenture has occurred and is continuing, the Company shall have the
right, from time to time and without causing an Event of Default, to defer
payments of interest on the Debt Securities by extending the interest payment
period on the Debt Securities at any time and from time to time during the term
of the Debt Securities, for up to 20 consecutive quarterly periods (each such
extended interest payment period, together with all previous and further
consecutive extensions thereof, is referred to herein as an “Extension
Period”).  No Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may
be.  During any Extension Period, interest will continue to accrue on
the Debt Securities, and interest on such accrued interest (such accrued
interest and interest thereon referred to herein as “Deferred Interest”) will
accrue at an annual rate equal to the Interest Rate 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 applicable law.  No interest or Deferred Interest (except
any Additional Amounts (as defined in the Indenture) that may be due and
payable) shall be due and payable during an Extension Period, except at the end
thereof.  At the end of any Extension Period, the Company shall pay
all Deferred Interest then accrued and unpaid on the Debt Securities; provided, however, that during
any Extension Period, the Company may not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Company’s capital stock, (ii) make any payment 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 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        
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 such Extension Period, (b) as a result of any exchange or conversion of
any class or series of the Company’s capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company’s capital
stock or of any class or series of the Company’s indebtedness for any class or
series of the Company’s capital stock, (c) the purchase of fractional interests
in shares of the Company’s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any stockholder’s rights
plan, or the issuance of rights, stock or other property under any stockholder’s
rights plan, or the redemption or repurchase of rights pursuant thereto or (e)
any dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with
or junior to such stock).  Prior to the termination of any Extension
Period, the Company may further extend such Extension Period, provided, that no
Extension Period (including all previous and further consecutive extensions that
are part of such Extension Period) shall exceed 20 consecutive quarterly
periods.  Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Company may commence a new Extension
Period, subject to the foregoing requirements.  The Company must give
the Trustee notice of its election to begin or extend an Extension Period no
later than the close of business on the fifteenth Business Day prior to the
applicable Interest Payment Date.

    

     

    The
indebtedness evidenced by this Debt Security is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness (as defined in the Indenture), 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.

    
      
        
        

      

      
        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.

     

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

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

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

     

    WASHINGTON
TRUST BANCORP, INC.

     

    By:          /s/ David V.
Devault                        

    Name:
David V. Devault

    Title:

     

    Dated:  ______________________,
____

     

     

     

     

    CERTIFICATE
OF AUTHENTICATION

     

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

     

     

    WILMINGTON
TRUST COMPANY,

    not in
its individual capacity but solely as

    the
Trustee

     

    By:       /s/ W. Thomas Morris,
II                      

    Authorized
Officer

     

    Dated:  ______________________,
____

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     REVERSE
OF SECURITY

     

    This Debt
Security is one of a duly authorized series of debt securities of the Company
(collectively, the “Debt Securities”), all issued or to be issued pursuant to an
Indenture (the “Indenture”), dated as of April 7, 2008, duly executed and
delivered between the Company and Wilmington Trust Company, as Trustee (the
“Trustee”), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debt Securities of which this Debt Security is a
part.

     

    Upon the
occurrence and continuation of a Tax Event, an Investment Company Event or a
Capital Treatment Event (each, a “Special Event”), the Company shall have the
right to redeem this Debt Security, at its option, in whole with all other Debt
Securities but not in part, at any time, within 90 days following the occurrence
of such Special Event (the “Special Redemption Date”), at the Special Redemption
Price (as defined herein).

     

    The
Company shall also have the right to redeem this Debt Security at its option, in
whole or (provided that all accrued and unpaid interest has been paid on all
Debt Securities for all Interest Periods terminating on or prior to such date)
from time to time in part, on any Interest Payment Date on or after June 15,
2013 (each, an “Optional Redemption Date”), at the Optional Redemption Price (as
defined herein).

     

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

     

    “Optional
Redemption Price” means an amount in cash equal to 100% of the principal amount
of this Debt Security being redeemed plus unpaid interest accrued thereon to the
related Optional Redemption Date.

     

    “Special
Redemption Price” means, with respect to the redemption of this Debt Security
following a Special Event, an amount in cash equal to 103.10% of the principal
amount of this Debt Security to be redeemed prior to June 15, 2009 and
thereafter equal to the percentage of the principal amount of this Debt Security
that is specified below for the Special Redemption Date plus, in each case,
unpaid interest accrued thereon to the Special Redemption Date:

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

     

    
      	
              Special Redemption
      During the 12-Month Period Beginning June
      15,

            	
              Percentage of
      Principal Amount

            
	
              2009

            	
              102.48%

            
	
              2010

            	
              101.86%

            
	
              2011

            	
              101.24%

            
	
              2012

            	
              100.62%

            
	
              2013
      and thereafter

            	
              100.00%

            

    

    

     

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

     

    The
Indenture contains provisions permitting the Company and the Trustee, with the
consent of the holders of 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 United States Dollars, or impair or affect the right of any holder to
institute suit for 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 the holders of all 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 holder of this Debt Security (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        
all
future holders and owners of this Debt Security and of any Debt Security issued
in exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debt Security.

    

     

    No
reference herein to the Indenture and no provision of this Debt Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to make 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 holder hereof on the Debt
Security Register (as defined in the Indenture) of the Company, upon surrender
of this Debt Security for registration of transfer at the office or agency of
the Trustee in Wilmington, Delaware, or at any other office or agency of the
Company in Wilmington, Delaware or Providence, Rhode Island, accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the 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 or the Trustee may require payment of a sum sufficient to cover any tax,
fee or other governmental charge payable in relation thereto as specified in the
Indenture.

     

    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 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 none of the Company, the Trustee,
any Authenticating Agent, any Paying Agent, any transfer agent or any Debt
Security registrar shall be affected by any notice to the contrary.

     

    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 different authorized denominations, as requested by
the holder surrendering the same.

     

    The Debt
Securities are issuable only in registered certificated form without
coupons.

     

    No
recourse shall be had for the payment of the principal of or premium, if any, or
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, director, employee or agent, past, present
or future, as such, of the Company or of any predecessor or 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,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and
released.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    All terms
used but not defined in this Debt Security shall have the meanings assigned to
them in the Indenture.

     

    THIS DEBT
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SAID STATE
OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

     

    
      
         

      

      
        12

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