Document:

Exhibit 4.1

ALLIANCE
FINANCIAL CORPORATION,

as Issuer

INDENTURE

Dated as of September 21, 2006

WILMINGTON TRUST COMPANY,

as Trustee

FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES

DUE 2036

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
 

	

	
 

	
ARTICLE I.
  DEFINITIONS

	
 

	
1

	
 

	
 

	
 

	
 

	
Section 1.1.

	
 

	
Definitions

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE II.
  DEBENTURES

	
 

	
8

	
 

	
 

	
 

	
 

	
Section 2.1.

	
 

	
Authentication
  and Dating

	
 

	
8

	
 

	
Section 2.2.

	
 

	
Form of
  Trustee’s Certificate of Authentication

	
 

	
9

	
 

	
Section 2.3.

	
 

	
Form and
  Denomination of Debentures

	
 

	
9

	
 

	
Section 2.4.

	
 

	
Execution of
  Debentures

	
 

	
9

	
 

	
Section 2.5.

	
 

	
Exchange and
  Registration of Transfer of Debentures

	
 

	
10

	
 

	
Section 2.6.

	
 

	
Mutilated,
  Destroyed, Lost or Stolen Debentures

	
 

	
12

	
 

	
Section 2.7.

	
 

	
Temporary
  Debentures

	
 

	
12

	
 

	
Section 2.8.

	
 

	
Payment of
  Interest and Additional Interest

	
 

	
13

	
 

	
Section 2.9.

	
 

	
Cancellation
  of Debentures Paid, etc.

	
 

	
14

	
 

	
Section
  2.10.

	
 

	
Computation
  of Interest

	
 

	
14

	
 

	
Section
  2.11.

	
 

	
Extension of
  Interest Payment Period

	
 

	
15

	
 

	
Section
  2.12.

	
 

	
CUSIP
  Numbers

	
 

	
16

	
 

	
Section
  2.13.

	
 

	
Global
  Debentures

	
 

	
17

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE III.
  PARTICULAR COVENANTS OF THE COMPANY

	
 

	
18

	
 

	
 

	
 

	
 

	
Section 3.1.

	
 

	
Payment of
  Principal, Premium and Interest; Agreed Treatment of the Debentures

	
 

	
18

	
 

	
Section 3.2.

	
 

	
Offices for
  Notices and Payments, etc.

	
 

	
19

	
 

	
Section 3.3.

	
 

	
Appointments
  to Fill Vacancies in Trustee’s Office

	
 

	
19

	
 

	
Section 3.4.

	
 

	
Provision as
  to Paying Agent

	
 

	
20

	
 

	
Section 3.5.

	
 

	
Certificate
  to Trustee

	
 

	
20

	
 

	
Section 3.6.

	
 

	
Additional
  Sums

	
 

	
21

	
 

	
Section 3.7.

	
 

	
Compliance
  with Consolidation Provisions

	
 

	
21

	
 

	
Section 3.8.

	
 

	
Limitation
  on Dividends

	
 

	
21

	
 

	
Section 3.9.

	
 

	
Covenants as
  to the Trust

	
 

	
22

	
 

	
Section
  3.10.

	
 

	
Additional
  Junior Indebtedness

	
 

	
22

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE IV.
  SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

	
 

	
22

	
 

	
 

	
 

	
 

	
Section 4.1.

	
 

	
Securityholders’
  Lists

	
 

	
22

	
 

	
Section 4.2.

	
 

	
Preservation
  and Disclosure of Lists

	
 

	
22

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
23

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 5.1.

	
 

	
Events of
  Default

	
 

	
23

	
 

	
Section 5.2.

	
 

	
Payment of
  Debentures on Default; Suit Therefor

	
 

	
25

	
 

	
Section 5.3.

	
 

	
Application
  of Moneys Collected by Trustee

	
 

	
26

	
 

	
Section 5.4.

	
 

	
Proceedings
  by Securityholders

	
 

	
27

	
 

	
Section 5.5.

	
 

	
Proceedings
  by Trustee

	
 

	
27

	
 

	
Section 5.6.

	
 

	
Remedies
  Cumulative and Continuing; Delay or Omission Not a Waiver

	
 

	
27

i

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 5.7.

	
 

	
Direction of
  Proceedings and Waiver of Defaults by Majority of Securityholders

	
 

	
28

	
 

	
Section 5.8.

	
 

	
Notice of
  Defaults

	
 

	
28

	
 

	
Section 5.9.

	
 

	
Undertaking
  to Pay Costs

	
 

	
28

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE VI.
  CONCERNING THE TRUSTEE

	
 

	
29

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 6.1.

	
 

	
Duties and
  Responsibilities of Trustee

	
 

	
29

	
 

	
Section 6.2.

	
 

	
Reliance on Documents, Opinions, etc.

	
 

	
30

	
 

	
Section 6.3.

	
 

	
No
  Responsibility for Recitals, etc.

	
 

	
30

	
 

	
Section 6.4.

	
 

	
Trustee,
  Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own
  Debentures

	
 

	
31

	
 

	
Section 6.5.

	
 

	
Moneys to be
  Held in Trust

	
 

	
31

	
 

	
Section 6.6.

	
 

	
Compensation
  and Expenses of Trustee

	
 

	
31

	
 

	
Section 6.7.

	
 

	
Officers’
  Certificate as Evidence

	
 

	
32

	
 

	
Section 6.8.

	
 

	
Eligibility
  of Trustee

	
 

	
32

	
 

	
Section 6.9.

	
 

	
Resignation
  or Removal of Trustee

	
 

	
32

	
 

	
Section
  6.10.

	
 

	
Acceptance
  by Successor Trustee

	
 

	
33

	
 

	
Section
  6.11.

	
 

	
Succession
  by Merger, etc.

	
 

	
34

	
 

	
Section
  6.12.

	
 

	
Authenticating
  Agents

	
 

	
34

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE VII.
  CONCERNING THE SECURITYHOLDERS

	
 

	
35

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 7.1.

	
 

	
Action by
  Securityholders

	
 

	
35

	
 

	
Section 7.2.

	
 

	
Proof of
  Execution by Securityholders

	
 

	
36

	
 

	
Section 7.3.

	
 

	
Who Are
  Deemed Absolute Owners

	
 

	
36

	
 

	
Section 7.4.

	
 

	
Debentures
  Owned by Company Deemed Not Outstanding

	
 

	
36

	
 

	
Section 7.5.

	
 

	
Revocation
  of Consents; Future Holders Bound

	
 

	
36

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE
  VIII. SECURITYHOLDERS’ MEETINGS

	
 

	
37

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 8.1.

	
 

	
Purposes of
  Meetings

	
 

	
37

	
 

	
Section 8.2.

	
 

	
Call of
  Meetings by Trustee

	
 

	
37

	
 

	
Section 8.3.

	
 

	
Call of
  Meetings by Company or Securityholders

	
 

	
37

	
 

	
Section 8.4.

	
 

	
Qualifications
  for Voting

	
 

	
37

	
 

	
Section 8.5.

	
 

	
Regulations

	
 

	
38

	
 

	
Section 8.6.

	
 

	
Voting

	
 

	
38

	
 

	
Section 8.7.

	
 

	
Quorum;
  Actions

	
 

	
38

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE IX.
  SUPPLEMENTAL INDENTURES

	
 

	
39

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 9.1.

	
 

	
Supplemental
  Indentures without Consent of Securityholders

	
 

	
39

	
 

	
Section 9.2.

	
 

	
Supplemental
  Indentures with Consent of Securityholders

	
 

	
40

	
 

	
Section 9.3.

	
 

	
Effect of
  Supplemental Indentures

	
 

	
41

	
 

	
Section 9.4.

	
 

	
Notation on
  Debentures

	
 

	
41

	
 

	
Section 9.5.

	
 

	
Evidence of
  Compliance of Supplemental Indenture to be Furnished to Trustee

	
 

	
41

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE X.
  REDEMPTION OF SECURITIES

	
 

	
41

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section
  10.1.

	
 

	
Optional
  Redemption

	
 

	
41

	
 

	
Section
  10.2.

	
 

	
Special
  Event Redemption

	
 

	
42

	
 

	
Section
  10.3.

	
 

	
Notice of
  Redemption; Selection of Debentures

	
 

	
42

	
 

	
Section
  10.4.

	
 

	
Payment of
  Debentures Called for Redemption

	
 

	
42

ii

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE XI.
  CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

	
 

	
43

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section
  11.1.

	
 

	
Company May
  Consolidate, etc., on Certain Terms

	
 

	
43

	
 

	
Section
  11.2.

	
 

	
Successor
  Entity to be Substituted

	
 

	
43

	
 

	
Section
  11.3.

	
 

	
Opinion of
  Counsel to be Given to Trustee

	
 

	
44

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE XII.
  SATISFACTION AND DISCHARGE OF INDENTURE

	
 

	
44

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section
  12.1.

	
 

	
Discharge of
  Indenture

	
 

	
44

	
 

	
Section
  12.2.

	
 

	
Deposited
  Moneys to be Held in Trust by Trustee

	
 

	
44

	
 

	
Section
  12.3.

	
 

	
Paying Agent
  to Repay Moneys Held

	
 

	
44

	
 

	
Section
  12.4.

	
 

	
Return of
  Unclaimed Moneys

	
 

	
45

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE
  XIII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
             
          DIRECTORS

	
 

	
45

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section
  13.1.

	
 

	
Indenture
  and Debentures Solely Corporate Obligations

	
 

	
45

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE XIV.
  MISCELLANEOUS PROVISIONS

	
 

	
45

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section
  14.1.

	
 

	
Successors

	
 

	
45

	
 

	
Section
  14.2.

	
 

	
Official
  Acts by Successor Entity

	
 

	
45

	
 

	
Section
  14.3.

	
 

	
Surrender of
  Company Powers

	
 

	
45

	
 

	
Section
  14.4.

	
 

	
Addresses
  for Notices, etc.

	
 

	
45

	
 

	
Section
  14.5.

	
 

	
Governing
  Law

	
 

	
46

	
 

	
Section
  14.6.

	
 

	
Evidence of
  Compliance with Conditions Precedent

	
 

	
46

	
 

	
Section
  14.7.

	
 

	
Table of
  Contents, Headings, etc.

	
 

	
46

	
 

	
Section
  14.8.

	
 

	
Execution in
  Counterparts

	
 

	
46

	
 

	
Section
  14.9.

	
 

	
Separability

	
 

	
46

	
 

	
Section
  14.10.

	
 

	
Assignment

	
 

	
46

	
 

	
Section
  14.11.

	
 

	
Acknowledgment
  of Rights

	
 

	
47

	
 

	
 

	
 

	
 

	
 

	
 

	
ARTICLE XV.
  SUBORDINATION OF DEBENTURES

	
 

	
47

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section
  15.1.

	
 

	
Agreement to
  Subordinate

	
 

	
47

	
 

	
Section
  15.2.

	
 

	
Default on
  Senior Indebtedness

	
 

	
47

	
 

	
Section
  15.3.

	
 

	
Liquidation,
  Dissolution, Bankruptcy

	
 

	
48

	
 

	
Section
  15.4.

	
 

	
Subrogation

	
 

	
49

	
 

	
Section
  15.5.

	
 

	
Trustee to
  Effectuate Subordination

	
 

	
49

	
 

	
Section
  15.6.

	
 

	
Notice by
  the Company

	
 

	
49

	
 

	
Section
  15.7.

	
 

	
Rights of
  the Trustee; Holders of Senior Indebtedness

	
 

	
50

	
 

	
Section
  15.8.

	
 

	
Subordination
  May Not Be Impaired

	
 

	
50

	
 

	
 

	
 

	
 

	
 

	
 

	
Exhibit A          Form of
  Floating Rate Junior Subordinated Deferrable Interest Debenture

	
 

	
 

	
Exhibit B          Form of
  Certificate to Trustee

	
 

	
 

iii

          THIS
INDENTURE, dated as of September 21, 2006, between Alliance Financial
Corporation, a New York corporation (the “Company”), and Wilmington
Trust Company, a Delaware banking corporation, as debenture trustee (the “Trustee”).

WITNESSETH:

          WHEREAS,
for its lawful corporate purposes, the Company has duly authorized the issuance
of its Floating Rate Junior Subordinated Deferrable Interest Debentures due
2036 (the “Debentures”) under this Indenture to provide, among other
things, for the execution and authentication, delivery and administration
thereof, and the Company has duly authorized the execution of this Indenture;
and

          WHEREAS,
all acts and things necessary to make this Indenture a valid agreement
according to its terms, have been done and performed;

          NOW,
THEREFORE, This Indenture Witnesseth:

          In
consideration of the premises, and the purchase of the Debentures 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 Debentures as follows:

ARTICLE I.

DEFINITIONS

          Section
1.1.     Definitions.  The
terms defined in this Section 1.1 (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 1.1.
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.

          “Acceleration
Event of Default” means an Event of Default under Section 5.1(a), (d),
(e) or (f), whatever the reason for such Acceleration Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body.

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

          “Additional
Junior Indebtedness” means, without duplication and other than the
Debentures, any indebtedness, liabilities or obligations of the Company, or any
Subsidiary of the Company, under debt securities (or guarantees in respect of
debt securities) initially issued after the date of this Indenture to any
trust, or a trustee of a trust, partnership or other entity affiliated with the
Company that is, directly or indirectly, a finance subsidiary (as such term is
defined in Rule 3a-5 under the Investment Company Act of 1940) or other
financing vehicle of the Company or any Subsidiary of the Company in connection
with the issuance by that entity of preferred securities or other securities
that are eligible to qualify for Tier 1 capital treatment (or its then
equivalent) for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Company (or, if the Company is
not a bank holding company, such guidelines applied to the Company as if the Company
were subject to such guidelines); provided, however, that the
inability of the Company to treat all or any portion of the Additional Junior
Indebtedness as Tier 1 capital shall not disqualify it as Additional
Junior Indebtedness if such inability results from the Company having
cumulative preferred stock, minority interests in consolidated 

1

subsidiaries,
or any other class of security or interest which the Federal Reserve now or may
hereafter accord Tier 1 capital treatment (including the Debentures) in
excess of the amount which may qualify for treatment as Tier 1 capital
under applicable capital adequacy guidelines.

          “Additional
Sums” has the meaning set forth in Section 3.6.

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

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

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

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

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

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

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

          “Capital
Securities” means undivided beneficial interests in the assets of the Trust
which rank pari passu with Common Securities issued by the
Trust; provided, however, that upon the occurrence and
continuance of an Event of Default (as defined in the Declaration), 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 enters
into with Wilmington Trust Company, as guarantee trustee, or other Persons that
operates directly or indirectly for the benefit of holders of Capital
Securities of the Trust.

          “Capital
Treatment Event” means the receipt by the Company and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of any amendment to, or change (including any announced
prospective 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 Company will not, within 90 days of the date of such opinion, be
entitled to treat an amount equal to the aggregate liquidation amount of the
Capital Securities as “Tier 1 Capital” (or its then equivalent) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company (or if the Company is not a bank holding
company or is otherwise not subject to the Federal Reserve’s risk-based capital
adequacy guidelines, such guidelines applied to the Company as if the Company
were

2

subject to
such guidelines); provided, however, that the inability of the
Company to treat all or any portion of the liquidation amount of the Capital
Securities as Tier l Capital shall not constitute the basis for a Capital
Treatment Event, if such inability results from the Company having cumulative
preferred stock, minority interests in consolidated subsidiaries, or any other
class of security or interest which the Federal Reserve or OTS, as applicable,
may now or hereafter accord Tier 1 Capital treatment in excess of the
amount which may now or hereafter qualify for treatment as Tier 1 Capital
under applicable capital adequacy guidelines; provided further, however,
that the distribution of Debentures in connection with the liquidation of the
Trust shall not in and of itself constitute a Capital Treatment Event unless
such liquidation shall have occurred in connection with a Tax Event or an
Investment Company Event.

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

          “Common
Securities” means undivided beneficial interests in the assets of the Trust
which rank pari passu with
Capital Securities issued by the Trust; provided, however, that
upon the occurrence and continuance of an Event of Default (as defined in the
Declaration), 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 Alliance Financial Corporation, a New York corporation, and, subject to
the provisions of Article XI, shall include its successors and assigns.

          “Coupon
Rate” has the meaning set forth in Section 2.8.

          “Debenture”
or “Debentures” has the meaning stated in the first recital of this
Indenture.

          “Debenture
Register” has the meaning specified in Section 2.5.

          “Declaration”
means the Amended and Restated Declaration of Trust of the Trust, 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 2.8.

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

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

          “Determination
Date” has the meaning set forth in Section 2.10.

          “Distribution
Period” means (i) with respect to interest paid on the first Interest
Payment Date, the period beginning on (and including) the date of original
issuance and ending on (but excluding) the Interest Payment Date in December
2006 and (ii) thereafter, with respect to interest paid on each successive
Interest Payment Date, the period beginning on (and including) the preceding
Interest Payment Date and ending on (but excluding) such current Interest
Payment Date.

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

3

          “Event
of Default” means any event specified in Section 5.1, 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 from time to
time, or any successor legislation.

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

          “Federal
Reserve” means the Board of Governors of the Federal Reserve System, or its
designated district bank, as applicable, and any successor federal agency that
is primarily responsible for regulating the activities of bank holding
companies.

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

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

          “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 during the term of this Indenture, or if such day
is not a Business Day, then the next succeeding Business Day (it being
understood that interest accrues for any such non-Business Day), commencing in
December 2006.

          “Interest
Rate” means for the Distribution Period beginning on (and including) the
date of original issuance and ending on (but excluding) the Interest Payment
Date in December 2006 the rate per annum of 7.04%, and for each Distribution
Period beginning on or after the Interest Payment Date in December 2006, the
Coupon Rate for such Distribution Period.

          “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 the
occurrence of a change in law or regulation or written change (including any
announced prospective change) in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Trust is or,
within 90 days of the date of such opinion will be considered an “investment
company” that is required to be registered under the Investment Company Act of
1940, as amended which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Debentures.

          “Liquidation
Amount” means the stated amount of $1,000.00 per Trust Security.

          “Maturity
Date” means December 15, 2036.

          “Officers’
Certificate” means a certificate signed by the Chairman of the Board, the
Chief Executive Officer, the Vice Chairman, the President, any Managing
Director or any Vice President, and by the Treasurer, an Assistant Treasurer,
the Comptroller, an Assistant Comptroller, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.  Each such certificate shall include the
statements provided for in Section 14.6 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. 

4

Each such
opinion shall include the statements provided for in Section 14.6 if and
to the extent required by the provisions of such Section.

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

          The
term “outstanding,” when used with reference to Debentures, means,
subject to the provisions of Section 7.4, as of any particular time, all
Debentures authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except:

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

         (b)           Debentures, 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, however, that, if such Debentures, or portions
thereof, are to be redeemed prior to maturity thereof, notice of such
redemption shall have been given as provided in Section 10.3 or provision
satisfactory to the Trustee shall have been made for giving such notice; and

          (c)          Debentures
paid pursuant to Section 2.6 or in lieu of or in substitution for which
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.6 unless proof satisfactory to the Company and the
Trustee is presented that any such Debentures are held by bona fide holders in
due course.

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

          “Predecessor
Security” of any particular Debenture means every previous Debenture
evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for purposes of this definition, any Debenture
authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.

          “Principal
Office of the Trustee,” or other similar term, means the office of the
Trustee, at which at any particular time its corporate trust business shall be
principally administered, which at the time of the execution of this Indenture
shall be Rodney Square North, 1100 North Market Street, Wilmington,
Delaware  19890-1600, Attention:
Corporate Trust Administration.

          “Redemption
Date” has the meaning set forth in Section 10.1.

          “Redemption
Price” means 100% of the principal amount of the Debentures being redeemed,
plus accrued and unpaid interest (including any Additional Interest) on such
Debentures to the Redemption Date.

          “Responsible
Officer” means, with respect to the Trustee, any officer within the
Principal Office of the Trustee, 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 Trust
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.

5

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

          “Securityholder,”
“holder of Debentures,” or other similar terms, means any Person in whose name
at the time a particular Debenture is registered on the register kept by the
Company or the Trustee for that purpose in accordance with the terms hereof.

          “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 all borrowed and purchased money 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; (iv) all
obligations of the Company for the reimbursement of any letter of credit, any
banker’s acceptance, any security purchase facility, any repurchase agreement
or similar arrangement, any interest rate swap, any other hedging arrangement,
any obligation under options or any similar credit or other transaction;
(v) all obligations of the Company associated with derivative products
such as interest and foreign exchange rate contracts, commodity contracts, and
similar arrangements; (vi) all obligations of the type referred to in
clauses (i) through (v) above of other Persons for the payment of which
the Company is responsible or liable as obligor, guarantor or otherwise
including, without limitation, similar obligations arising from off-balance
sheet guarantees and direct credit substitutes; and (vii) all obligations
of the type referred to in clauses (i) through (vi) above of other Persons
secured by any lien on any property or asset of the Company (whether or not
such obligation is assumed by the Company), whether incurred on or prior to the
date of this Indenture or thereafter incurred.
Notwithstanding the foregoing, “Senior Indebtedness” shall not include
(1) any Additional Junior Indebtedness, (2) Debentures issued pursuant
to this Indenture and guarantees in respect of such Debentures, (3) trade
accounts payable of the Company arising in the ordinary course of business
(such trade accounts payable being pari
passu in right of payment to the Debentures), or
(4) obligations with respect to which (a) in the instrument creating
or evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are pari
passu, junior or otherwise not superior in right of payment to the
Debentures and (b) the Company, prior to the issuance thereof, has
notified (and, if then required under the applicable guidelines of the
regulating entity, has received approval from) the Federal Reserve (if the
Company is a bank holding company) or the OTS (if the Company is a savings and
loan holding company).  Senior
Indebtedness shall continue to be Senior Indebtedness and be entitled to the
subordination provisions irrespective of any amendment, modification or waiver
of any term of such Senior Indebtedness.

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

          “Special
Redemption Date” has the meaning set forth in Section 10.2.

          “Special
Redemption Price” means the price set forth in the following table for any
Special Redemption Date that occurs on the date indicated below (or if such day
is not a Business Day, then the next succeeding Business Day), expressed as the
percentage of the principal amount of the Debentures being redeemed:

6

	
 

	
 

	
 

	
Month in which Special

  Redemption Date Occurs

	
 

	
Special Redemption Price

	

	
 

	

	
 

	
December 2006

	
 

	
104.625%

	
 

	
March 2007

	
 

	
104.300%

	
 

	
June 2007

	
 

	
104.000%

	
 

	
September 2007

	
 

	
103.650%

	
 

	
December 2007

	
 

	
103.350%

	
 

	
March 2008

	
 

	
103.000%

	
 

	
June 2008

	
 

	
102.700%

	
 

	
September 2008

	
 

	
102.350%

	
 

	
December 2008

	
 

	
102.050%

	
 

	
March 2009

	
 

	
101.700%

	
 

	
June 2009

	
 

	
101.400%

	
 

	
September 2009

	
 

	
101.050%

	
 

	
December 2009

	
 

	
100.750%

	
 

	
March 2010

	
 

	
100.450%

	
 

	
June 2010

	
 

	
100.200%

	
 

	
September 2010 and thereafter

	
 

	
100.000%

plus, in each
case, accrued and unpaid interest (including any Additional Interest) on such
Debentures to the Special Redemption Date.

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

          “Tax
Event” means the receipt by the Company and the Trust of an opinion of
counsel experienced in such matters to the effect that, as a result of any amendment
to or change (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, field service advice, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt

7

such
procedures or regulations) (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 Debentures, there is more
than an insubstantial risk that:  (i) the
Trust is, or will be within 90 days of the date of such opinion, subject
to United States federal income tax with respect to income received or accrued
on the Debentures; (ii) interest payable by the Company on the Debentures
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 more than a de minimis amount of other
taxes, duties or other governmental charges.

          “3-Month
LIBOR” has the meaning set forth in Section 2.10.

          “Telerate
Page 3750” has the meaning set forth in Section 2.10.

          “Trust”
shall mean Alliance Financial Capital Trust II, a Delaware statutory
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debentures under this Indenture,
of which the Company is the sponsor.

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

          “Trustee”
means Wilmington Trust Company, and, subject to the provisions of
Article VI hereof, shall also include its successors and assigns as
Trustee hereunder.

ARTICLE II.

DEBENTURES

          Section 2.1.     
Authentication and Dating.  Upon
the execution and delivery of this Indenture, or from time to time thereafter,
Debentures in an aggregate principal amount not in excess of $15,464,000.00 may
be executed and delivered by the Company to the Trustee for authentication, and
the Trustee, upon receipt of a written authentication order from the Company,
shall thereupon authenticate and make available for delivery said Debentures to
or upon the written order of the Company, signed by its Chairman of the Board
of Directors, Chief Executive Officer, Vice Chairman, the President, one of its
Managing Directors or one of its Vice Presidents without any further action by
the Company hereunder.  Notwithstanding
anything to the contrary contained herein, the Trustee shall be fully protected
in relying upon the aforementioned authentication order and written order in
authenticating and delivering said Debentures.
In authenticating such Debentures, and accepting the additional responsibilities
under this Indenture in relation to such Debentures, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected
in relying upon:

          (a)          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
of the Company, as the case may be; and

          (b)          an Opinion
  of Counsel prepared in accordance with Section 14.6 which shall also
  state:

	
 

	
 

	
 

	
 

	
 

	
          (1)          that
  such Debentures, when authenticated and delivered by the Trustee and issued
  by the Company in each case in the manner and subject to any conditions
  specified in such Opinion of Counsel, will constitute valid and legally
  binding obligations of the Company, subject to or limited by applicable
  bankruptcy, insolvency, reorganization, conservatorship, receivership,
  moratorium and other statutory or

8

	
 

	
 

	
 

	
 

	
 

	
decisional laws relating to or affecting creditors’ rights
  or the reorganization of financial institutions (including, without
  limitation, preference and fraudulent conveyance or transfer laws),
  heretofore or hereafter enacted or in effect, affecting the rights of
  creditors generally; and

	
 

	
 

	
 

	
 

	
 

	
          (2)          that
  all laws and requirements in respect of the execution and delivery by the
  Company of the Debentures have been complied with and that authentication and
  delivery of the Debentures by the Trustee will not violate the terms of this
  Indenture.

          The
Trustee shall have the right to decline to authenticate and deliver any
Debentures under this Section if the Trustee, being advised in writing 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 holders.

          The
definitive Debentures 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 Debentures, as evidenced by their
execution of such Debentures.

          Section 2.2.     Form
of Trustee’s Certificate of Authentication.  The
Trustee’s certificate of authentication on all Debentures shall be in
substantially the following form:

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

	
 

	
 

	
 

	
 

	
WILMINGTON
  TRUST COMPANY, as Trustee

	
 

	
 

	
 

	
By

	
 

	
 

	

	
 

	
 

	
Authorized
  Signer

	
 

          Section
2.3.     Form and Denomination of Debentures.  The
Debentures shall be substantially in the form of Exhibit A attached
hereto.  The Debentures shall be in
registered, certificated form without coupons and in minimum denominations of
$100,000.00 and any multiple of $1,000.00 in excess thereof.  Any attempted transfer of the Debentures in
a block having an aggregate principal amount of less than $100,000.00 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 Debentures for any purpose, including, but not limited to the receipt
of payments on such Debentures, and such purported transferee shall be deemed
to have no interest whatsoever in such Debentures.  The Debentures 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
2.4.      Execution of Debentures.  The
Debentures 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, Chief
Executive Officer, Vice Chairman, President, one of its Managing Directors or
one of its Executive Vice Presidents, Senior Vice Presidents or Vice
Presidents.  Only such Debentures as
shall bear thereon a certificate of authentication substantially in the form
herein before recited, executed by the Trustee or the Authenticating Agent by
the manual signature of an authorized signer, 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 Debenture executed by the Company shall be
conclusive evidence that the Debenture 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 Debentures
shall cease to be such officer before the Debentures so signed shall have been
authenticated and delivered by the Trustee or 

9

the
Authenticating Agent, or disposed of by the Company, such Debentures
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed such Debentures had not ceased to be such officer of the
Company; and any Debenture may be signed on behalf of the Company by such
Persons as, at the actual date of the execution of such Debenture, shall be the
proper officers of the Company, although at the date of the execution of this
Indenture any such person was not such an officer.

          Every Debenture shall be dated the date of
its authentication.

          Section
2.5.      Exchange and Registration of
Transfer of Debentures.  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 3.2, a register (the “Debenture
Register”) for the Debentures issued hereunder in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration and transfer of all Debentures as in this Article II
provided.  The Debenture Register shall
be in written form or in any other form capable of being converted into written
form within a reasonable time.

          Debentures
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 3.2, 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 Debenture
or Debentures which the Securityholder making the exchange shall be entitled to
receive.  Upon due presentment for
registration of transfer of any Debenture at the Principal Office of the
Trustee or at any office or agency of the Company maintained for such purpose
as provided in Section 3.2, 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 Debenture for a like aggregate principal amount.  Registration or registration of transfer of any Debenture by the
Trustee or by any agent of the Company appointed pursuant to Section 3.2,
and delivery of such Debenture, shall be deemed to complete the registration or
registration of transfer of such Debenture.

          All
Debentures 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 the Trustee or
the Authenticating Agent duly executed by the holder or his attorney duly
authorized in writing.

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

          The
Company or the Trustee shall not be required to exchange or register a transfer
of any Debenture for a period of 15 days next preceding the date of
selection of Debentures for redemption.

          Notwithstanding
anything herein to the contrary, Debentures may not be transferred except in
compliance with the restricted securities legend set forth below, unless
otherwise determined by the Company, upon the advice of counsel expert in securities
law, in accordance with applicable law:

          THIS
SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE
UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL
DEPOSIT INSURANCE CORPORATION.

10

          THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW.  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 AND ANY APPLICABLE STATE
SECURITIES LAWS.  THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH
RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF
WHICH MAY BE OBTAINED FROM THE COMPANY.

          THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF 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 THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER
OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF
LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14
OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS
NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
WITH RESPECT TO SUCH PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL
BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER
(i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF
SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL
NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

11

          THIS
SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN
AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000.00 AND MULTIPLES OF
$1,000.00 IN EXCESS THEREOF.  ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING AN AGGREGATE PRINCIPAL
AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL
EFFECT WHATSOEVER.

          THE
HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

          Section
2.6.     Mutilated, Destroyed, Lost or Stolen
Debentures.  In case any Debenture 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
Debenture bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Debenture, or in lieu of and in substitution for
the Debenture so destroyed, lost or stolen.
In every case the applicant for a substituted Debenture 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 Debenture and
of the ownership thereof.

          The
Trustee may authenticate any such substituted Debenture and deliver the same
upon the written request or authorization of any officer of the Company.  Upon the issuance of any substituted
Debenture, 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 Debenture 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 Debenture, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Debenture) 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 Debenture and of the ownership thereof.

          Every
substituted Debenture issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any such Debenture is destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Debenture 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 Debentures duly issued
hereunder.  All Debentures 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 Debentures and
shall preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.

          Section
2.7.     Temporary Debentures.  Pending
the preparation of definitive Debentures, the Company may execute and the
Trustee shall authenticate and make available for delivery temporary Debentures
that are typed, printed or lithographed.
Temporary Debentures shall be issuable in any authorized denomination,
and substantially in the form of the definitive Debentures in lieu of which
they are issued but with such omissions, insertions and variations as may be
appropriate for temporary Debentures, all as may be determined by the
Company.  Every such temporary Debenture
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 Debentures.  Without
unreasonable delay the Company will execute and deliver to the Trustee or the
Authenticating Agent 

12

definitive
Debentures and thereupon any or all temporary Debentures may be surrendered in
exchange therefor, at the principal corporate trust office of the Trustee or at
any office or agency maintained by the Company for such purpose as provided in
Section 3.2, and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange for such temporary
Debentures a like aggregate principal amount of such definitive
Debentures.  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 Debentures
shall in all respects be entitled to the same benefits under this Indenture as
definitive Debentures authenticated and delivered hereunder.

          Section
2.8.     Payment of Interest and Additional
Interest.  Interest at the Interest Rate
and any Additional Interest on any Debenture that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date for Debentures shall be
paid to the Person in whose name said Debenture (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 Additional Interest
payable on the Maturity Date shall be paid to the Person to whom principal is
paid.

          Each
Debenture shall bear interest for the period beginning on (and including) the
date of original issuance and ending on (but excluding) the Interest Payment
Date in December 2006 at a rate per annum of 7.04%, and shall bear interest for
each successive Distribution Period beginning on or after the Interest Payment
Date in December 2006 at a rate per annum equal to the 3-Month LIBOR,
determined as described in Section 2.10, plus 1.65% (the “Coupon Rate”),
applied to the principal amount thereof, until the principal thereof becomes
due and payable, and on any overdue principal and to the extent that payment of
such interest is enforceable under applicable law (without duplication) on any
overdue installment of interest (including Additional Interest) at the Interest
Rate in effect for each applicable period compounded quarterly.  Interest shall be payable (subject to any
relevant Extension Period) quarterly in arrears on each Interest Payment Date
with the first installment of interest to be paid on the Interest Payment Date
in December 2006.

          Any
interest on any Debenture, including Additional Interest, that is payable, but
is not punctually paid or duly provided for, on any Interest Payment Date
(herein called “Defaulted Interest”) shall forthwith cease to be payable
to the registered holder on the relevant regular record date by virtue of
having been such holder; and such Defaulted Interest shall be paid by the
Company to the Persons in whose names such Debentures (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 at least
25 days prior to the date of the proposed payment of the amount of Defaulted
Interest proposed to be paid on each such Debenture 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 satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall not be more
than 15 nor less than 10 days prior to the date of the proposed payment and not
less than 10 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 its address as it appears in
the Debenture Register, not less than 10 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 

13

whose names
such Debentures (or their respective Predecessor Securities) are registered on
such special record date and shall be no longer payable.

          The
Company may make payment of any Defaulted Interest on any Debentures in any
other lawful manner after notice given by the Company to the Trustee of the
proposed payment method; provided, however, the Trustee in its
sole discretion deems such payment method to be practical.

          Any
interest (including Additional 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 Debentures.

          The
term “regular record date” as used in this Section shall mean the close of
business on the 15th Business Day preceding the applicable Interest Payment
Date.

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

          Section
2.9.     Cancellation of Debentures Paid, etc.  All
Debentures surrendered for the purpose of payment, redemption, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent, be surrendered to the Trustee and promptly canceled by it, or, if
surrendered to the Trustee or any Authenticating Agent, shall be promptly
canceled by it, and no Debentures shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture.  All Debentures canceled by any
Authenticating Agent shall be delivered to the Trustee.  The Trustee shall destroy all canceled
Debentures unless the Company otherwise directs the Trustee in writing.  If the Company shall acquire any of the Debentures,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Debentures unless and until the same are
surrendered to the Trustee for cancellation.

          Section
2.10.     Computation of Interest.  The
amount of interest payable for each Distribution Period will be calculated by
applying the Interest Rate to the principal amount outstanding at the
commencement of the Distribution Period on the basis of the actual number of
days in the Distribution Period concerned divided by 360.  All percentages resulting from any
calculations on the Debentures 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)).

          (a)          “3-Month
LIBOR” means the London interbank offered interest rate for three-month,
U.S. dollar deposits determined by the Trustee in the following order of
priority:

	
 

	
 

	
 

	
               (1)          the
  rate (expressed as a percentage per annum) for U.S. dollar deposits having a
  three-month maturity that appears on Telerate Page 3750 as of
  11:00 a.m. (London time) on the related Determination Date (as defined
  below).  “Telerate Page 3750”
  means the display designated as “Page 3750” on the Moneyline Telerate
  Service or such other page as may replace Page 3750 on that service or
  such other service or services as may be nominated by the British Bankers’
  Association as the information vendor for the purpose of displaying London
  interbank offered rates for U.S. dollar deposits;

	
 

	
 

	
 

	
               (2)          
  if such rate cannot be identified on the related Determination Date, the
  Trustee will request the principal London offices of four leading banks in
  the London interbank market to provide such banks’ offered quotations
  (expressed as percentages per annum) to prime banks in

14

	
 

	
 

	
 

	
the London
  interbank market for U.S. dollar deposits having a three-month maturity as of
  11:00 a.m. (London time) on such Determination Date.  If at least two quotations are provided,
  3-Month LIBOR will be the arithmetic mean of such quotations;

	
 

	
 

	
 

	
          (3)          if
  fewer than two such quotations are provided as requested in clause (2)
  above, the Trustee will request four major New York City banks to provide
  such banks’ offered quotations (expressed as percentages per annum) to
  leading European banks for loans in U.S. dollars as of 11:00 a.m.
  (London time) on such Determination Date.
  If at least two such quotations are provided, 3-Month LIBOR will be
  the arithmetic mean of such quotations; and

	
 

	
 

	
 

	
          (4)          if
  fewer than two such quotations are provided as requested in clause (3)
  above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to the
  Distribution Period immediately preceding such current Distribution Period.

          If
the rate for U.S. dollar deposits having a three-month maturity that initially
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
related Determination Date is superseded on the Telerate Page 3750 by a
corrected rate by 12:00 noon (London time) on such Determination Date,
then the corrected rate as so substituted on the applicable page will be the
applicable 3-Month LIBOR for such Determination Date.

          (b)          The
Interest Rate for any Distribution Period will at no time be higher than the
maximum rate then permitted by New York law as the same may be modified by
United States law.

          (c)          “Determination
Date” means the date that is two London Banking Days (i.e., a business day
in which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the particular Distribution Period for which a
Coupon Rate is being determined.

          (d)          The
Trustee shall notify the Company, the Institutional Trustee and any securities
exchange or interdealer quotation system on which the Capital Securities are
listed, of the Coupon Rate and the Determination Date for each Distribution
Period, in each case as soon as practicable after the determination thereof but
in no event later than the thirtieth (30th) day of the relevant Distribution
Period.  Failure to notify the Company,
the Institutional Trustee or any securities exchange or interdealer quotation
system, or any defect in said notice, shall not affect the obligation of the
Company to make payment on the Debentures at the applicable Coupon Rate.  Any error in the calculation of the Coupon
Rate by the Trustee may be corrected at any time by notice delivered as above
provided.  Upon the request of a holder
of a Debenture, the Trustee shall provide the Coupon Rate then in effect and,
if determined, the Coupon Rate for the next Distribution Period.

          (e)          Subject
to the corrective rights set forth above, all certificates, communications,
opinions, determinations, calculations, quotations and decisions given,
expressed, made or obtained for the purposes of the provisions relating to the
payment and calculation of interest on the Debentures and distributions on the
Capital Securities by the Trustee or the Institutional Trustee will (in the
absence of willful default, bad faith and manifest error) be final, conclusive
and binding on the Trust, the Company and all of the holders of the Debentures
and the Capital Securities, and no liability shall (in the absence of willful
default, bad faith or manifest error) attach to the Trustee or the
Institutional Trustee in connection with the exercise or non-exercise by either
of them or their respective powers, duties and discretion.

          Section
2.11.     Extension of Interest Payment Period.  So
long as no Acceleration Event of Default has occurred and is continuing, the
Company shall have the right, from time to time, and without causing an Event
of Default, to defer payments of interest on the Debentures by extending the
interest payment period on the Debentures at any time and from time to time
during the term of the Debentures, for up to 20 consecutive quarterly
periods (each such extended interest payment period, an “Extension 

15

Period”), during which Extension Period no
interest (including Additional Interest) shall be due and payable (except any
Additional Sums that may be due and payable).
No Extension Period may end on a date other than an Interest Payment
Date.  During an Extension Period,
interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Interest Rate in
effect for such Extension Period, compounded quarterly from the date such
interest would have been payable were it not for the Extension Period, to the
extent permitted by law (such interest referred to herein as “Additional
Interest”).  At the end of any such
Extension Period the Company shall pay all interest then accrued and unpaid on
the Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date; provided further,
however, that during any such Extension Period, the Company shall not
and shall not permit any Affiliate to (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 or such Affiliate’s capital stock (other
than payments of dividends or distributions to the Company) or make any
guarantee payments with respect to the foregoing or (ii) make any payment
of principal of or interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company or any Affiliate that rank pari passu in all respects with or junior
in interest to the Debentures (other than, with respect to clauses (i) or (ii)
above, (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company 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, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as
a result of any exchange 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 stockholders’ rights plan, or the issuance of
rights, stock or other property under any stockholders’ rights plan, or the
redemption or repurchase of rights pursuant thereto, (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
and any cash payments in lieu of fractional shares issued in connection
therewith, or (f) payments under the Capital Securities Guarantee).  Prior to the termination of any Extension
Period, the Company may further extend such period, provided that such period
together with all such previous and further consecutive extensions thereof
shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date.  Upon the termination of
any Extension Period and upon the payment of all accrued and unpaid interest
and Additional Interest, the Company may commence a new Extension Period,
subject to the foregoing requirements.
No interest or Additional Interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest to the extent permitted by applicable law.  The Company must give the Trustee notice of
its election to begin or extend an Extension Period by the close of business at
least 15 Business Days prior to the Interest Payment Date with respect to which
interest on the Debentures would have been payable except for the election to
begin or extend such Extension Period.
The Trustee shall give notice of the Company’s election to begin a new
Extension Period to the Securityholders.

          Section
2.12.     CUSIP Numbers.  The
Company in issuing the Debentures may use “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use CUSIP numbers in notices of redemption
as a convenience to Securityholders; provided, however, that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification  

16

numbers
printed on the Debentures, 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 numbers.

          Section
2.13.      Global
Debentures. 

          (a)          Upon
the election of the holder of outstanding Debentures, which election need not
be in writing, the Debentures owned by such holder shall be issued in the form
of one or more Global Debentures registered in the name of the Depositary or
its nominee.  Each Global Debenture
issued under this Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Debenture or a nominee thereof,
delivered to such Depositary or a nominee thereof or custodian therefor and
shall contain such legends as may be required by the Depositary and each such
Global Debenture shall constitute a single Debenture 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 Debentures registered, and no transfer of a Global
Debenture in whole or in part may be registered, in the name of any Person
other than the Depositary for such Global Debenture or a nominee thereof unless
(i) such Depositary advises the Trustee and the Company in writing that
such Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Debenture, and no
qualified successor is appointed by the Company within ninety (90) days of
receipt by the Company of such notice, (ii) such Depositary ceases to be a
clearing agency registered under the Exchange Act and no successor is appointed
by the Company within ninety (90) days after obtaining knowledge of such event,
(iii) the Company executes and delivers to the Trustee a Company order
stating that the Company elects to terminate the book-entry system through the
Depositary or (iv) an Event of Default shall have occurred and be continuing.  Upon the occurrence of any event specified
in clause (i), (ii), (iii) or (iv) above, the Trustee shall notify the
Depositary and instruct the Depositary to notify all owners of beneficial
interests in such Global Debenture of the occurrence of such event and of the
availability of Debentures to such owners of beneficial interests requesting
the same.  Upon the issuance of such
Debentures and the registration in the Debenture Register of such Debentures in
the names of the holders of the beneficial interests therein, the Trustee shall
recognize such holders of beneficial interests as holders.

          (c)          If
any Global Debenture is to be exchanged for other Debentures or canceled in
part, or if another Debenture is to be exchanged in whole or in part for a
beneficial interest in any Global Debenture, then either (i) such Global
Debenture shall be so surrendered for exchange or cancellation as provided in
this Article II or (ii) the principal amount thereof shall be reduced
or increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Debentures 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 Debenture 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 any Debentures issuable in
exchange for such Global Debenture (or any portion thereof) in accordance with
the instructions of the Depositary.  The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such instructions.

          (d)          Every
Debenture 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 Debenture is registered in the name of a Person other than the
Depositary for such Global Debenture or a nominee thereof.

17

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

          (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 Debentures, 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 Debentures registrar and the Trustee shall be entitled to deal
with the Depositary for all purposes under this Indenture relating to a Global
Debenture (including the payment of principal and interest thereon and the
giving of instructions or directions by owners of beneficial interests therein
and the giving of notices) as the sole holder of the Debenture and shall have
no obligations to the owners of beneficial interests therein.  Neither the Trustee nor the Debentures
registrar shall have any liability in respect of any transfers effected by the
Depositary.

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

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

ARTICLE III.

PARTICULAR COVENANTS OF THE COMPANY 

          Section
3.1.     Payment of Principal, Premium and
Interest; Agreed Treatment of the Debentures.

          (a)          The
Company covenants and agrees that it will duly and punctually pay or cause to
be paid the principal of and premium, if any, and interest and any Additional
Interest and other payments on the Debentures at the place, at the respective
times and in the manner provided in this Indenture and the Debentures. Each
installment of interest on the Debentures may be paid (i) by mailing
checks for such interest payable to the order of the holders of Debentures
entitled thereto as they appear on the registry books of the Company if a
request for a wire transfer has not been received by the Company or
(ii) by wire transfer to any account with a banking institution located in
the United States designated in writing 

18

by such Person
to the paying agent no later than the related record date.  Notwithstanding the foregoing, so long as
the holder of this Debenture is the Institutional Trustee, the payment of the
principal of and interest on this Debenture will be made in immediately
available funds at such place and to such account as may be designated by the
Institutional Trustee.

          (b)          The
Company will treat the Debentures as indebtedness, and the amounts payable in
respect of the principal amount of such Debentures as interest, for all United
States federal income tax purposes.  All
payments in respect of such Debentures will be made free and clear of United
States withholding tax to any beneficial owner thereof that has provided an
Internal Revenue Service Form W8 BEN (or any substitute or successor form)
establishing its non-United States status for United States federal income tax
purposes.

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

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

          Section
3.2.     Offices for Notices and Payments, etc.  So
long as any of the Debentures remain outstanding, the Company will maintain in
Wilmington, Delaware, an office or agency where the Debentures may be presented
for payment, an office or agency where the Debentures may be presented for
registration of transfer and for exchange as in this Indenture provided and an
office or agency where notices and demands to or upon the Company in respect of
the Debentures 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 2.5, such office or agency for all of the above
purposes shall be the office or agency of the Trustee.  In case the Company shall fail to maintain
any such office or agency in Wilmington, Delaware, or shall fail to give such
notice of the location or of any change in the location thereof, presentations
and demands may be made and notices may be served at the Principal Office of
the Trustee.

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

          Section
3.3.     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 6.9, a Trustee, so that there shall at all
times be a Trustee hereunder.

19

          Section
3.4.      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 3.4,

	
 

	
 

	
 

	
 

	
(1)          that
  it will hold all sums held by it as such agent for the payment of the
  principal of and premium, if any, or interest, if any, on the Debentures
  (whether such sums have been paid to it by the Company or by any other
  obligor on the Debentures) in trust for the benefit of the holders of the
  Debentures;

	
 

	
 

	
 

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

	
 

	
 

	
 

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

          (b)          If
the Company shall act as its own paying agent, it will, on or before each due
date of the principal of and premium, if any, or interest or other payments, if
any, on the Debentures, set aside, segregate and hold in trust for the benefit
of the holders of the Debentures a sum sufficient to pay such principal,
premium, interest or other 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 Debentures) to make any payment of the
principal of and premium, if any, or interest or other payments, if any, on the
Debentures when the same shall become due and payable.

          Whenever
the Company shall have one or more paying agents for the Debentures, it will,
on or prior to each due date of the principal of and premium, if any, or
interest, if any, on the Debentures, deposit with a paying agent a sum
sufficient to pay the principal, premium, interest or other 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 3.4 to the contrary notwithstanding, the Company may, at
any time, for the purpose of obtaining a satisfaction and discharge with
respect to the Debentures, 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 trusts herein
contained.

          (d)          Anything
in this Section 3.4 to the contrary notwithstanding, the agreement to hold
sums in trust as provided in this Section 3.4 is subject to
Sections 12.3 and 12.4.

          Section
3.5.     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 Debentures are outstanding hereunder, a
Certificate stating that in the course of the performance by the signers of
their duties as officers of the Company they would normally have knowledge of
any default during such fiscal year by the Company in the performance of any
covenants 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 and status thereof.
A form of this Certificate is attached hereto as Exhibit B.

20

          Section
3.6.     Additional Sums.  If
and for so long as the Trust is the holder of all Debentures and the Trust is
required to pay 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 (“Additional Sums”) on the
Debentures as shall be required so that the net amounts received and retained
by the Trust after paying taxes (including withholding taxes), duties,
assessments or other governmental charges will be equal to the amounts the
Trust would have received if no such taxes, duties, assessments or other
governmental charges had been imposed.
Whenever in this Indenture or the Debentures there is a reference in any
context to the payment of principal of or interest on the Debentures, such
mention shall be deemed to include mention of payments of the Additional Sums
provided for in this paragraph to the extent that, in such context, Additional
Sums are, were or would be payable in respect thereof pursuant to the
provisions of this paragraph and express mention of the payment of Additional
Sums (if applicable) in any provisions hereof shall not be construed as
excluding Additional Sums in those provisions hereof where such express mention
is not made; provided, however, that the deferral of the payment
of interest during an Extension Period pursuant to Section 2.11 shall not
defer the payment of any Additional Sums that may be due and payable.

          Section
3.7.     Compliance with Consolidation Provisions.  The
Company will not, while any of the Debentures remain outstanding, consolidate
with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article XI hereof are complied with.

          Section
3.8.     Limitation on Dividends.  If
Debentures are initially issued to the Trust or a trustee of such Trust in
connection with the issuance of Trust Securities by the Trust (regardless of
whether Debentures continue to be held by such Trust) and (i) there shall
have occurred and be continuing an Event of Default, (ii) the Company
shall be in default with respect to its payment of any obligations under the
Capital Securities Guarantee, or (iii) the Company shall have given notice
of its election to defer payments of interest on the Debentures by extending
the interest payment period as provided herein and such period, or any
extension thereof, shall be continuing, then the Company shall not, and shall
not allow any Affiliate of the Company to, (x) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company’s capital stock or its
Affiliates’ capital stock (other than payments of dividends or distributions to
the Company) or make any guarantee payments with respect to the foregoing or
(y) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company or any Affiliate
that rank pari passu in all
respects with or junior in interest to the Debentures (other than, with respect
to clauses (x) and (y) above,
(1) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company 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, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of capital stock of the Company (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, if any,
(2) 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, (3) 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,
(4) any declaration of a dividend in connection with any stockholders’
rights plan, or the issuance of rights, stock or other property under any
stockholders’ rights plan, or the redemption or repurchase of rights pursuant
thereto, (5) 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 and any cash payments 

21

in lieu of
fractional shares issued in connection therewith, or (6) payments under
the Capital Securities Guarantee).

          Section
3.9.     Covenants as to the Trust.
For so long as the 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, except in connection with a distribution of
Debentures to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration, cause the Trust (a) to
remain a statutory trust, (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 Debentures.

          Section
3.10.   Additional Junior
Indebtedness. The Company shall not, and it shall not cause or
permit any Subsidiary of the Company to, incur, issue or be obligated on any
Additional Junior Indebtedness, either directly or indirectly, by way of
guarantee, suretyship or otherwise, other than Additional Junior Indebtedness
(i) that, by its terms, is expressly stated to be either junior and subordinate
or pari passu in all respects to
the Debentures, and (ii) of which the Company has notified (and, if then
required under the applicable guidelines of the regulating entity, has received
approval from) the Federal Reserve, if the Company is a bank holding company,
or the OTS, if the Company is a savings and loan holding company.

ARTICLE IV.

SECURITYHOLDERS’ LISTS AND REPORTS

BY THE COMPANY AND THE TRUSTEE

          Section
4.1.     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 the Debentures, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the
Securityholders of the Debentures 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 4.1 so long as the Trustee is
in possession thereof by reason of its acting as Debenture registrar.

          Section
4.2.     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 Debentures (1)
contained in the most recent list furnished to it as provided in Section 4.1 or
(2) received by it in the capacity of Debentures registrar (if so acting)
hereunder. The Trustee may destroy any list furnished to it as provided in
Section 4.1 upon receipt of a new list so furnished.

          (b)     In
case three or more holders of Debentures (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 Debenture for a period of
at least 6 months preceding the date of such application, and such application
states that the applicants desire to communicate with other holders of
Debentures with respect to their 

22

rights under
this Indenture or under such Debentures 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 5 Business Days after the receipt of such
application, at its election, either:

	
 

	
 

	
 

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

	
 

	
 

	
 

	
(2)     inform
  such applicants as to the approximate number of holders of Debentures 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
  4.2, 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 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 4.2 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 Debentures, as the case
may be, or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If said Commission, as permitted or
required by applicable law, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order sustaining
one or more of such objections, said Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met and
shall enter an order so declaring, the Trustee shall mail copies of such
material to all such Securityholders with reasonable promptness after the entry
of such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.

          (c)     Each
and every holder of Debentures, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
paying agent shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the holders of Debentures in accordance
with the provisions of subsection (b) of this Section 4.2, 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).

ARTICLE V.

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

UPON AN EVENT OF DEFAULT

          Section
5.1.     Events of Default.
“Event of Default,” wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

          (a)     the
Company defaults in the payment of any interest upon any Debenture, including
any Additional Interest in respect thereof, following the nonpayment of any
such interest for twenty or more consecutive Distribution Periods; or

23

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

          (c)     the
Company defaults in the performance of, or breaches, any of its covenants or
agreements in this Indenture or in the terms of the Debentures established as
contemplated in 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 60 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 at least 25% in
aggregate principal amount of the outstanding Debentures, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder; or

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

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

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

          If
an Acceleration Event of Default occurs and is continuing with respect to the
Debentures, then, and in each and every such case, unless the principal of the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debentures
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
Debentures and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately
due and payable. If an Event of Default under Section 5.1(b) or (c) occurs and
is continuing with respect to the Debentures, then, and in each and every such
case, unless the principal of the Debentures shall have already become due and
payable, either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Debentures then outstanding hereunder, by notice in
writing to the Company (and to the Trustee if given by Securityholders), may
proceed to remedy the default or breach thereunder by such appropriate judicial
proceedings as the Trustee or such holders shall deem most effectual to remedy
the defaulted covenant or enforce the provisions of this Indenture so breached,
either by suit in equity or by action at law, for damages or otherwise.

          The
foregoing provisions, however, are subject to the condition that if, at any
time after the principal of the Debentures shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured

24

installments
of interest upon all the Debentures and the principal of and premium, if any,
on the Debentures which shall have become due otherwise than by acceleration
(with interest upon such principal and premium, if any, and Additional
Interest) 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 6.6, if any, and (ii) all Events of Default under this
Indenture, other than the non-payment of the principal of or premium, if any,
on Debentures which shall have become due by acceleration, shall have been
cured, waived or otherwise remedied as provided herein -- then and in every
such case the holders of a majority in aggregate principal amount of the
Debentures then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent thereon.

          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 Debentures 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 Debentures shall continue as
though no such proceeding had been taken.

          Section
5.2.     Payment of Debentures on Default; Suit
Therefor. The Company covenants that upon the
occurrence of an Event of Default pursuant to Section 5.1(a) or (b) then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Debentures the whole amount that then shall have become due
and payable on all Debentures for principal and premium, if any, or interest,
or both, as the case may be, with Additional Interest accrued on the Debentures
(to the extent that payment of such interest is enforceable under applicable
law and, if the Debentures are held by the Trust or a trustee of such Trust,
without duplication of any other amounts paid by the Trust or a trustee in
respect thereof); 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 6.6. 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 Debentures and collect in the
manner provided by law out of the property of the Company or any other obligor
on such Debentures 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 Debentures 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
Debentures, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the Debentures
shall then be due and payable as therein expressed or by declaration of
acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 5.2, shall be
entitled and empowered, by intervention in such proceedings or otherwise,

	
 

	
 

	
 

	
 

	
(i)

	
to file and
  prove a claim or claims for the whole amount of principal and interest owing
  and unpaid in respect of the Debentures,

25

	
 

	
 

	
 

	
 

	
(ii)

	
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
  6.6), and of the Securityholders allowed in such judicial proceedings
  relative to the Company or any other obligor on the Debentures, or to the
  creditors or property of the Company or such other obligor, unless prohibited
  by applicable law and regulations, to vote on behalf of the holders of the
  Debentures 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, 

	
 

	
 

	
 

	
(iii)

	
to collect
  and receive any moneys or other property payable or deliverable on any such
  claims, and 

	
 

	
 

	
 

	
(iv)

	
to
  distribute the same after the deduction of its charges and expenses.

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 6.6.

          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 Debentures
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 Debentures, may be enforced by the Trustee without the possession of any of
the Debentures, 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
Debentures.

          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
Debentures, and it shall not be necessary to make any holders of the Debentures
parties to any such proceedings.

          Section
5.3.     Application
of Moneys Collected by Trustee. Any moneys collected by the
Trustee pursuant to this Article V 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 Debentures 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 6.6;

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

26

          Third:
To the payment of the amounts then due and unpaid upon Debentures for principal
(and premium, if any), and interest on the Debentures, in respect of which or
for the benefit of which money has been collected, ratably, without preference
or priority of any kind, according to the amounts due on such Debentures
(including Additional Interest); and

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

          Section 5.4.     Proceedings
by Securityholders. No holder of any Debenture
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 Debentures and unless
the holders of not less than 25% in aggregate principal amount of the
Debentures 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.

          Notwithstanding
any other provisions in this Indenture, however, the right of any holder of any
Debenture to receive payment of the principal of, premium, if any, and
interest, on such Debenture 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 and by accepting a Debenture hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Debenture with every
other such taker and holder and the Trustee, that no one or more holders of
Debentures shall have any right in any manner whatsoever by virtue or by
availing itself of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other Debentures, or to obtain or
seek to obtain priority over or preference to any other such holder, or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all holders of Debentures. 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
5.5.     Proceedings by Trustee.
In case of an Event of Default hereunder the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any of such rights, either by suit in equity or by
action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture
or in aid of the exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this Indenture or
by law.

          Section
5.6.     Remedies
Cumulative and Continuing; Delay or Omission Not a Waiver.
Except as otherwise provided in Section 2.6, 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 Debentures, 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 Debentures, and no delay or omission of the
Trustee or of any holder of any of the Debentures to exercise any right, remedy
or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right, remedy 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 5.4, every power and remedy given by this Article V
or by law to the Trustee or to the Securityholders may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee (in
accordance with its duties under Section 6.1) or by the Securityholders.

27

          Section
5.7.     Direction
of Proceedings and Waiver of Defaults by Majority of Securityholders.
The holders of a majority in aggregate principal amount of the Debentures
affected (voting as one class) at the time outstanding 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 Debentures; provided, however, that
(subject to the provisions of Section 6.1) 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. 

          The
holders of a majority in aggregate principal amount of the Debentures at the
time outstanding may on behalf of the holders of all of the Debentures waive
(or modify any previously granted waiver of) any past default or Event of
Default, and its consequences, except a default (a) in the payment of principal
of, premium, if any, or interest on any of the Debentures, (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Debenture affected, or (c) in respect of the
covenants contained in Section 3.9; provided, however, that if
the Debentures are held by the Trust or a trustee of such trust, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in Liquidation Amount of Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver, provided, further,
that if the consent of the holder of each outstanding Debenture is required,
such waiver shall not be effective until each holder of the Trust Securities of
the Trust shall have consented to such waiver. Upon any such waiver, the
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 Debentures shall
be restored to their former positions and rights hereunder, respectively; but
no 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 Debentures and this
Indenture be deemed to have been cured and to be not continuing.

          Section
5.8.     Notice of
Defaults. The Trustee shall, within 90 days after the actual
knowledge by a Responsible Officer of the Trustee of the occurrence of a
default with respect to the Debentures, mail to all Securityholders, as the
names and addresses of such holders appear upon the Debenture Register, notice
of all defaults with respect to the Debentures known to the Trustee, unless
such defaults shall have been cured before the giving of such notice (the term
“defaults” for the purpose of this Section 5.8 being hereby defined to be the
events specified in clauses (a), (b), (c), (d), (e) and (f) of Section 5.1, not
including periods of grace, if any, provided for therein); provided, however,
that, except in the case of default in the payment of the principal of,
premium, if any, or interest on any of the Debentures, 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
5.9.     Undertaking
to Pay Costs. All parties to this Indenture agree, and each
holder of any Debenture by his 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; provided, however, that the
provisions of this Section 5.9 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 Debentures outstanding, or to any suit instituted by
any

28

Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture against the Company on or after
the same shall have become due and payable.

ARTICLE VI.

CONCERNING THE TRUSTEE

          Section
6.1.     Duties
and Responsibilities of Trustee. With respect to the holders of
Debentures issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Debentures and after the curing or waiving of
all Events of Default which may have occurred, with respect to the Debentures,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee. In case an Event of Default with respect to the
Debentures 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 man would
exercise or use under the circumstances in the conduct of his own affairs.

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

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

	
 

	
 

	
 

	
(1)     the
  duties and obligations of the Trustee with respect to Debentures 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 Debentures as are specifically set forth in
  this Indenture, and no implied covenants or obligations shall be read into
  this Indenture against the Trustee, and

	
 

	
 

	
 

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

          (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 5.7, 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.

          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, if there is ground for believing that the repayment of such funds or
liability is not assured to it under the terms of this Indenture or indemnity
satisfactory to the Trustee against such risk is not reasonably assured to it.

29

           Section
6.2.     Reliance on Documents,
Opinions, etc. Except as otherwise provided in Section 6.1:

          (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 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 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 Debentures (that has not been cured or waived)
to exercise with respect to Debentures 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 man would exercise or use under the circumstances in the
conduct of his own affairs;

          (f)     the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, coupon or other
paper or document, unless requested in writing to do so by the holders of not
less than a majority in aggregate principal amount of the outstanding
Debentures 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;

          (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; and

          (h)     with
the exceptions of defaults under Sections 5.1(a) or (b), the Trustee shall not
be charged with knowledge of any Default or Event of Default with respect to
the Debentures unless a 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
Debentures or by any holder of the Debentures.

          Section
6.3.     No
Responsibility for Recitals, etc. The recitals contained herein
and in the Debentures (except in the certificate of authentication of the
Trustee or the Authenticating Agent) shall be 

30

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 Debentures. The Trustee and the Authenticating
Agent shall not be accountable for the use or application by the Company of any
Debentures or the proceeds of any Debentures authenticated and delivered by the
Trustee or the Authenticating Agent in conformity with the provisions of this
Indenture.

          Section
6.4.     Trustee,
Authenticating Agent, Paying Agents, Transfer Agents or
Registrar May Own Debentures. The Trustee or any Authenticating Agent or any
paying agent or any transfer agent or any Debenture registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
with the same rights it would have if it were not Trustee, Authenticating
Agent, paying agent, transfer agent or Debenture registrar.  

          Section
6.5.     Moneys to
be Held in Trust. Subject to the provisions of Section 12.4, 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 shall be paid from
time to time upon the written order of the Company, signed by the Chairman of
the Board of Directors, the Chief Executive Officer, the President, a Managing
Director, a Vice President, the Treasurer or an Assistant Treasurer of the
Company.

          Section
6.6.     Compensation
and Expenses of Trustee. The Company covenants and agrees to pay
or reimburse the Trustee upon its request for all 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 expenses and disbursements of its counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advance as
may arise from its negligence or willful misconduct. For purposes of
clarification, this Section 6.6 does not contemplate the payment by the Company
of acceptance or annual administration fees owing to the Trustee pursuant to
the services to be provided by the Trustee under this Indenture or the fees and
expenses of the Trustee’s counsel in connection with the closing of the
transactions contemplated by this Indenture. The Company also covenants to
indemnify each of the Trustee or 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) incurred without negligence or willful
misconduct on the part of the Trustee and 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 of liability. The obligations of the
Company under this Section 6.6 to compensate and indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Debentures upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Debentures.

          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 Section 5.1(d), (e) or (f), 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.

31

          Notwithstanding
anything in this Indenture or any Debenture 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 Debentures or otherwise
advance funds to or on behalf of the Company.

          Section
6.7.     Officers’
Certificate as Evidence. Except as otherwise provided in
Sections 6.1 and 6.2, 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 or willful misconduct 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 or willful misconduct 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
6.8.     Eligibility
of Trustee. The Trustee hereunder shall at all times be a
corporation organized and doing business under the laws of the United States of
America or any state or territory thereof or of the District of Columbia or a
corporation or other Person authorized under such laws to exercise corporate
trust powers, having (or whose obligations under this Indenture are guaranteed
by an affiliate having) a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000.00) and subject to supervision or examination by
federal, state, territorial, or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 6.8 the combined capital and surplus of
such corporation 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.

          In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.8, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.9.

          If
the Trustee has or shall acquire any “conflicting interest” within the meaning
of § 310(b) of the Trust Indenture Act of 1939, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner described by
this Indenture.

          Section
6.9.     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 Debentures at
their addresses as they shall appear on the Debenture 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 Debenture or Debentures for at least six
months may, subject to the provisions of Section 5.9, on behalf of himself 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.

32

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

	
 

	
 

	
 

	
(1)     the
  Trustee shall fail to comply with the provisions of Section 6.8 after written
  request therefor by the Company or by any Securityholder who has been a bona
  fide holder of a Debenture or Debentures for at least 6 months, or

	
 

	
 

	
 

	
(2)     the
  Trustee shall cease to be eligible in accordance with the provisions of
  Section 6.8 and shall fail to resign after written request therefor by the
  Company or by any such Securityholder, or

	
 

	
 

	
 

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

	
 

	
 

	
 

	
then, in any
  such case, the Company may remove the Trustee and appoint a successor Trustee
  by written instrument, in duplicate, executed by order of the Board of
  Directors, one copy of which instrument shall be delivered to the Trustee so
  removed and one copy to the successor Trustee, or, subject to the provisions
  of Section 5.9, any Securityholder who has been a bona fide holder of a
  Debenture or Debentures for at least 6 months may, on behalf of himself 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 successor Trustee.

          (c)      Upon
prior written notice to the Company and the Trustee, the holders of a majority
in aggregate principal amount of the Debentures 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 10 Business Days after such
nomination the Company objects thereto, in which case, or in the case of a
failure by such holders to nominate a successor Trustee, the Trustee so removed
or any Securityholder, upon the terms and conditions and otherwise as in
subsection (a) of this Section 6.9 provided, 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 6.9 shall execute, acknowledge and deliver to the Company and to its
predecessor Trustee an instrument accepting such appointment hereunder, 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 Debentures 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 any amounts then due it pursuant to the
provisions of Section 6.6, 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 thereunder. 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 6.6.

33

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

          No
successor Trustee shall accept appointment as provided in this Section unless
at the time of such acceptance such successor Trustee shall be eligible under
the provisions of Section 6.8.

          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
6.10, the Company shall mail notice of the succession of such Trustee hereunder
to the holders of Debentures at their addresses as they shall appear on the
Debenture Register. If the Company fails to mail such notice within 10 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 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 Debentures 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 Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee may authenticate such
Debentures 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 Debentures 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 Debentures 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 Debentures
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 Debentures; 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 Debentures. 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 or territory thereof or of the District of Columbia authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of at least $50,000,000.00 and being subject to supervision or
examination by federal, state, territorial 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

34

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

          Any
Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent with respect to the Debentures
by giving written notice of termination to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section 6.12, the Trustee may, and upon the request of the
Company shall, promptly appoint a successor Authenticating Agent eligible under
this Section 6.12, shall give written notice of such appointment to the Company
and shall mail notice of such appointment to all holders of Debentures as the
names and addresses of such holders appear on the Debenture Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities with
respect to the Debentures 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
7.1.     Action by
Securityholders. Whenever in this Indenture it is provided that
the holders of a specified percentage in aggregate principal amount of the
Debentures 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
in person or by agent or proxy appointed in writing, or (b) by the record of
such holders of Debentures voting in favor thereof at any meeting of such
Securityholders duly called and held in accordance with the provisions of
Article VIII, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of such Securityholders 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 Debentures 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 

35

for the
purposes of determining whether Securityholders of the requisite proportion of
outstanding Debentures 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 Debentures 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 6 months after the record date.

          Section
7.2.     Proof of
Execution by Securityholders. Subject to the provisions of
Section 6.1, 6.2 and 8.5, proof of the execution of any instrument by a
Securityholder or his 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
Debentures shall be proved by the Debenture Register or by a certificate of the
Debenture 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 8.6.

          Section
7.3.     Who Are
Deemed Absolute Owners. Prior to due presentment for
registration of transfer of any Debenture, the Company, the Trustee, any
Authenticating Agent, any paying agent, any transfer agent and any Debenture
registrar may deem the Person in whose name such Debenture shall be registered
upon the Debenture Register to be, and may treat him as, the absolute owner of
such Debenture (whether or not such Debenture shall be overdue) for the purpose
of receiving payment of or on account of the principal of, premium, if any, and
interest on such Debenture and for all other purposes; and neither the Company
nor the Trustee nor any Authenticating Agent nor any paying agent nor any
transfer agent nor any Debenture registrar shall be affected by any notice to
the contrary. All such payments so made to any holder for the time being or
upon his 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
Debenture.

          Section
7.4.     Debentures
Owned by Company Deemed Not Outstanding. In determining whether
the holders of the requisite aggregate principal amount of Debentures have
concurred in any direction, consent or waiver under this Indenture, Debentures
which are owned by the Company or any other obligor on the Debentures or by any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any other obligor on the Debentures
shall be disregarded and deemed not to be outstanding for the purpose of any
such determination; provided, however, that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debentures which a Responsible Officer of
the Trustee actually knows are so owned shall be so disregarded. Debentures so
owned which have been pledged in good faith may be regarded as outstanding for
the purposes of this Section 7.4 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee’s right to vote such Debentures 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
7.5.     Revocation
of Consents; Future Holders Bound. At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 7.1, of the taking
of any action by the holders of the percentage in aggregate principal amount of
the Debentures specified in this Indenture in connection with such action, any
holder (in cases where no record date has been set pursuant to Section 7.1) or
any holder as of an applicable record date (in cases where a record date has
been set pursuant to Section 7.1) of a Debenture (or any Debenture issued in
whole or in part in exchange or

36

substitution
therefor) the serial number of which is shown by the evidence to be included in
the Debentures 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 7.2, revoke such action so far
as concerns such Debenture (or so far as concerns the principal amount
represented by any exchanged or substituted Debenture). Except as aforesaid any
such action taken by the holder of any Debenture shall be conclusive and
binding upon such holder and upon all future holders and owners of such
Debenture, and of any Debenture 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 Debenture or any Debenture issued
in exchange or substitution therefor.

ARTICLE VIII.

SECURITYHOLDERS’ MEETINGS

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

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

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

          (c)     to
consent to the execution of an indenture or indentures supplemental hereto
pursuant to the provisions of Section 9.2; 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 Debentures under any other
provision of this Indenture or under applicable law.

          Section
8.2.     Call of
Meetings by Trustee. The Trustee may at any time call a meeting
of Securityholders to take any action specified in Section 8.1, to be held at
such time and at such place 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 Debentures affected at their addresses as they
shall appear on the Debentures Register and, if the Company is not a holder of
Debentures, to the Company. Such notice shall be mailed not less than 20 nor
more than 180 days prior to the date fixed for the meeting.

          Section
8.3.     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 Debentures, 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
for such meeting and may call such meeting to take any action authorized in
Section 8.1, by mailing notice thereof as provided in Section 8.2.

          Section
8.4.     Qualifications
for Voting. To be entitled to vote at any meeting of
Securityholders a Person shall (a) be a holder of one or more Debentures with
respect to which the meeting is being held or (b) a Person appointed by an
instrument in writing as proxy by a holder of one or more such Debentures. The
only Persons who shall be entitled to be present or to speak at any meeting of 

38

Securityholders
shall be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.

          Section
8.5.     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 Debentures 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 think fit.

          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 8.3, 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 of the meeting.

          Subject
to the provisions of Section 7.4, at any meeting each holder of Debentures with
respect to which such meeting is being held or proxy therefor shall be entitled
to one vote for each $1,000.00 principal amount of Debentures held or
represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Debenture 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
Debentures held by him or instruments in writing as aforesaid duly designating
him as the Person to vote on behalf of other Securityholders. Any meeting of
Securityholders duly called pursuant to the provisions of Section 8.2 or 8.3
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
8.6.     Voting.
The vote upon any resolution submitted to any meeting of holders of
Debentures 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 Debentures
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 8.2. The record
shall show the serial numbers of the Debentures voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.

          Any
record so signed and verified shall be conclusive evidence of the matters
therein stated.

          Section
8.7.     Quorum;
Actions. The Persons entitled to vote a majority in principal
amount of the Debentures 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 principal amount of the
Debentures then outstanding, the Persons holding or representing such specified
percentage in principal amount of the Debentures then outstanding will
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such

38

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 8.2, except that such
notice need be given only once not less than 5 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 principal amount of the Debentures then outstanding which shall constitute
a quorum.

          Except
as limited by the provisos in the first paragraph of Section 9.2, 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 principal amount of the Debentures then outstanding; provided,
however, that, except as limited by the provisos in the first paragraph
of Section 9.2, any resolution with respect to any consent, waiver, request,
demand, notice, authorization, direction or other action which this Indenture
expressly provides may be given by the holders of not less than a specified
percentage in principal amount of the Debentures then outstanding 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 a not less
than such specified percentage in principal amount of the Debentures then
outstanding.

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

ARTICLE IX.

SUPPLEMENTAL INDENTURES

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

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

          (b)     to
add to the covenants of the Company such further covenants, restrictions or
conditions for the protection of the holders of Debentures as the Board of
Directors shall consider to be for the protection of the holders of such
Debentures, 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 

39

questions
arising under this Indenture; provided that any such action shall not
materially adversely affect the interests of the holders of the Debentures;

          (d)     to
add to, delete from, or revise the terms of Debentures, including, without
limitation, any terms relating to the issuance, exchange, registration or
transfer of Debentures, including to provide for transfer procedures and
restrictions substantially similar to those applicable to the Capital
Securities as required by Section 2.5 (for purposes of assuring that no
registration of Debentures is required under the Securities Act); provided,
however, that any such action shall not adversely affect the interests
of the holders of the Debentures then outstanding (it being understood, for
purposes of this proviso, that transfer restrictions on Debentures
substantially similar to those that were applicable to Capital Securities shall
not be deemed to materially adversely affect the holders of the Debentures);

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

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

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

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

          Any
supplemental indenture authorized by the provisions of this Section 9.1 may be
executed by the Company and the Trustee without the consent of the holders of
any of the Debentures at the time outstanding, notwithstanding any of the
provisions of Section 9.2.

          Section
9.2.     Supplemental
Indentures with Consent of Securityholders. With the consent
(evidenced as provided in Section 7.1) of the holders of not less than a
majority in aggregate principal amount of the Debentures at the time
outstanding affected by such supplemental indenture (voting as a class), the
Company, when authorized by a Board Resolution, and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto 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
Debentures; provided, however, that no such supplemental
indenture shall without the consent of the holders of each Debenture then
outstanding and affected thereby (i) change the fixed maturity of any
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof or make the principal thereof or any
interest or premium thereon payable in any coin or currency other than that
provided in the Debentures, or impair or affect the right of any Securityholder
to institute suit for payment thereof or impair the right of repayment, if any,
at the option of the holder, or (ii) reduce the aforesaid percentage of
Debentures the holders of which are required to consent to any such
supplemental indenture; provided further, however, that if
the Debentures are held by a trust or a trustee of such trust, such
supplemental indenture shall not be effective until the holders of a majority
in Liquidation Amount of Trust Securities shall have consented to such
supplemental indenture; provided further, however, that if
the consent of the 

40

Securityholder
of each outstanding Debenture is required, such supplemental indenture shall
not be effective until each holder of the Trust 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 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
Debenture Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.

          It
shall not be necessary for the consent of the Securityholders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

          Section
9.3.     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 Debentures
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
9.4.     Notation
on Debentures. Debentures 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
Debentures 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 Debentures then outstanding.

          Section
9.5.     Evidence
of Compliance of Supplemental Indenture to be Furnished to Trustee. The
Trustee, subject to the provisions of Sections 6.1 and 6.2, shall, in addition
to the documents required by Section 14.6, receive an Officers’ Certificate and
an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this Article IX. The
Trustee shall receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article IX is authorized or
permitted by, and conforms to, the terms of this Article IX and that it is
proper for the Trustee under the provisions of this Article IX to join in the
execution thereof.

ARTICLE X.

REDEMPTION OF SECURITIES

          Section
10.1.    Optional
Redemption. The Company shall have the right (subject to the
receipt by the Company of prior approval (i) if the Company is a bank holding
company, from the Federal Reserve, if then required under applicable capital
guidelines or policies of the Federal Reserve or (ii) if 

41

the Company is
a savings and loan holding company, from the OTS, if then required under
applicable capital guidelines or policies of the OTS) to redeem the Debentures,
in whole or in part, but in all cases in a principal amount with integral
multiples of $1,000.00, on any Interest Payment Date on or after the Interest
Payment Date in September 2011 (the “Redemption Date”), at the
Redemption Price.

          Section
10.2.    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 (i) if the Company is a bank holding company, from the Federal
Reserve, if then required under applicable capital guidelines or policies of
the Federal Reserve or (ii) if the Company is a savings and loan holding
company, from the OTS, if then required under applicable capital guidelines or
policies of the OTS) to redeem the Debentures in whole, but not in part, at any
Interest Payment Date, within 120 days following the occurrence of such Special
Event (the “Special Redemption Date”) at the Special Redemption Price.

          Section
10.3.    Notice of
Redemption; Selection of Debentures. In case the Company shall
desire to exercise the right to redeem all, or, as the case may be, any part of
the Debentures, it shall cause to be mailed a notice of such redemption at
least 30 and not more than 60 days prior to the Redemption Date or the Special
Redemption Date to the holders of Debentures so to be redeemed as a whole or in
part at their last addresses as the same appear on the Debenture 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 Debenture designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debenture.

          Each
such notice of redemption shall specify the CUSIP number, if any, of the
Debentures to be redeemed, the Redemption Date or the Special Redemption Date,
as applicable, the Redemption Price or the Special Redemption Price, as
applicable, at which Debentures are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Debentures, 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 Debentures are to be redeemed the notice of redemption shall specify
the numbers of the Debentures to be redeemed. In case the Debentures 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 Debenture, a new Debenture or
Debentures in principal amount equal to the unredeemed portion thereof will be
issued.

          Prior
to 10:00 a.m. New York City time on the Redemption Date or Special Redemption
Date, as applicable, the Company will deposit with the Trustee or with one or
more paying agents an amount of money sufficient to redeem on the Redemption
Date or the Special Redemption Date, as applicable, all the Debentures so
called for redemption at the appropriate Redemption Price or Special Redemption
Price.

          If
all, or less than all, the Debentures are to be redeemed, the Company will give
the Trustee notice not less than 45 nor more than 60 days, respectively, prior
to the Redemption Date or Special Redemption Date, as applicable, as to the
aggregate principal amount of Debentures to be redeemed and the Trustee shall
select, in such manner as in its sole discretion it shall deem appropriate and
fair, the Debentures or portions thereof (in integral multiples of $1,000.00)
to be redeemed.

          Section
10.4.    Payment of
Debentures Called for Redemption. If notice of redemption has
been given as provided in Section 10.3, the Debentures or portions of
Debentures with respect to which such notice has been given shall become due
and payable on the Redemption Date or Special Redemption Date, as applicable,
and at the place or places stated in such notice at the applicable Redemption
Price or Special Redemption Price and on and after said date (unless the
Company shall default in the payment of

42

such
Debentures at the Redemption Price or Special Redemption Price, as applicable)
interest on the Debentures or portions of Debentures so called for redemption
shall cease to accrue. On presentation and surrender of such Debentures at a
place of payment specified in said notice, such Debentures or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
Redemption Price or Special Redemption Price.

          Upon
presentation of any Debenture 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 Debenture or Debentures of
authorized denominations, in principal amount equal to the unredeemed portion
of the Debenture so presented.

ARTICLE XI.

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

          Section
11.1.    Company May
Consolidate, etc., on Certain Terms. Nothing contained in this
Indenture or in the Debentures shall prevent any consolidation or merger of the
Company with or into any other Person (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 the property of the Company or its
successor or successors as an entirety, or substantially as an entirety, to any
other Person (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, upon any such consolidation,
merger (where the Company is not the surviving corporation), sale, conveyance,
transfer or other disposition, the due and punctual payment of the principal of
(and premium, if any) and interest on all of the Debentures in accordance with
their terms, according to their tenor, and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be kept or
performed by the Company, shall be expressly assumed by supplemental indenture
satisfactory in form to the Trustee executed and delivered to the Trustee by the
entity formed by such consolidation, or into which the Company shall have been
merged, or by the entity which shall have acquired such property.

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

43

          Section
11.3.    Opinion of
Counsel to be Given to Trustee. The Trustee, subject to the
provisions of Sections 6.1 and 6.2, shall receive, in addition to the Opinion
of Counsel required by Section 9.5, 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
12.1.    Discharge of
Indenture. When

	
 

	
 

	
 

	
 

	
(a)

	
the Company
  shall deliver to the Trustee for cancellation all Debentures theretofore
  authenticated (other than any Debentures which shall have been destroyed,
  lost or stolen and which shall have been replaced or paid as provided in
  Section 2.6) and not theretofore canceled, or 

	
 

	
 

	
 

	
 

	
(b)

	
all the
  Debentures 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 1 year or are to be called for redemption
  within 1 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 Debentures (other than any
  Debentures which shall have been destroyed, lost or stolen and which shall
  have been replaced or paid as provided in Section 2.6) not theretofore
  canceled or delivered to the Trustee for cancellation, including principal
  and premium, if any, and interest due or to become due to such date of
  maturity or redemption date, as the case may be, but excluding, however, the
  amount of any moneys for the payment of principal of, and premium, if any, or
  interest on the Debentures (1) theretofore repaid to the Company in
  accordance with the provisions of Section 12.4, or (2) paid to any state or
  to the District of Columbia pursuant to its unclaimed property or similar
  laws,

and if in the
case of either clause (a) or clause (b) the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect except for the provisions of Sections 2.5,
2.6, 2.8, 3.1, 3.2, 3.4, 6.6, 6.8, 6.9 and 12.4 hereof shall survive until such
Debentures shall mature and be paid. Thereafter, Sections 6.6 and 12.4 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 agrees to reimburse the Trustee for any
costs or expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Debentures.

          Section
12.2.    Deposited
Moneys to be Held in Trust by Trustee. Subject to the provisions
of Section 12.4, all moneys deposited with the Trustee pursuant to Section 12.1
shall be held in trust in a non-interest bearing account 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 Debentures
for the payment of which such moneys have been deposited with the Trustee, of
all sums due and to become due thereon for principal, and premium, if any, and
interest.

          Section
12.3.    Paying Agent
to Repay Moneys Held. Upon the satisfaction and discharge of
this Indenture all moneys then held by any paying agent of the Debentures
(other than the Trustee) shall,

44

upon demand of
the Company, be repaid to it or paid to the Trustee, and thereupon such paying
agent shall be released from all further liability with respect to such moneys.

          Section
12.4.    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 Debentures and not applied but remaining unclaimed by the
holders of Debentures for 2 years after the date upon which the principal of,
and premium, if any, or interest on such Debentures, as the case may be, shall
have become due and payable, shall, subject to applicable escheatment laws, be
repaid to the Company by the Trustee or such paying agent on written demand;
and the holder of any of the Debentures shall thereafter look only to the
Company for any payment which such holder may be entitled to collect, and all
liability of the Trustee or such paying agent with respect to such moneys shall
thereupon cease.

ARTICLE XIII.

IMMUNITY OF INCORPORATORS, STOCKHOLDERS,

OFFICERS AND DIRECTORS

          Section
13.1.    Indenture and
Debentures Solely Corporate Obligations. No recourse for the
payment of the principal of or premium, if any, or interest on any Debenture,
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 Debenture, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, officer or director, as such,
past, present or future, of the Company or of any successor Person of the
Company, either directly or through the Company or any successor Person 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 Debentures.

ARTICLE XIV.

MISCELLANEOUS PROVISIONS

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

          Section
14.2.    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
14.3.    Surrender of
Company Powers. The Company by instrument in writing executed by
authority of at least 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
14.4.    Addresses for
Notices, etc. Any notice, consent, direction, request,
authorization, waiver or demand which by any provision of this Indenture is
required or permitted to be given, made, furnished or served by the Trustee or
by the Securityholders on or to 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 the purpose) to the Company, 120 Madison Street, MONY
Tower II, 18th Floor, Syracuse, New York 13202, Attention: J. Daniel Mohr. Any
notice, consent, direction, request, authorization, waiver or

45

demand by any
Securityholder or the Company to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing
at the office of the Trustee, addressed to the Trustee, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-1600, Attention: Corporate
Trust Administration. Any notice, consent, direction, request, authorization,
waiver or demand on or to any Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at
the address set forth in the Debenture Register.

          Section
14.5.    Governing Law.
This Indenture and each Debenture shall be deemed to be a contract made under
the law of the State of New York, and for all purposes shall be governed by and
construed in accordance with the law of said State, without regard to conflict
of laws principles thereof.

          Section
14.6.    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.

          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 shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) 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; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not in the opinion of such
person, such condition or covenant has been complied with.

          Section
14.7.    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
14.8.    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
14.9.    Separability.
In case any one or more of the provisions contained in this Indenture or in the
Debentures 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 Debentures, but this
Indenture and such Debentures shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein or therein.

          Section
14.10.   Assignment.
The Company will have the right at all times to assign any of its rights or
obligations under this Indenture to a direct or indirect wholly owned
Subsidiary of the Company, provided 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 hereto.

46

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

ARTICLE XV.

SUBORDINATION OF DEBENTURES

          Section
15.1.    Agreement to
Subordinate. The Company covenants and agrees, and each holder
of Debentures by such Securityholder’s acceptance thereof likewise covenants
and agrees, that all Debentures shall be issued subject to the provisions of
this Article XV; and each holder of a Debenture, 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 principal of, and premium, if any, and interest
on all Debentures 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; provided, however, that the Debentures
shall rank pari passu in right of
payment with the Company’s Junior Subordinated Debentures due January 23, 2034
issued pursuant to an Indenture dated as of December 19, 2003 by and between
the Company and Wilmington Trust Company.

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

          Section
15.2.    Default on
Senior Indebtedness. In the event and during the continuation of
any default by the Company in the payment of principal, premium, interest or
any other payment due on any Senior Indebtedness of the Company following any
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 principal (including redemption) of, or premium, if any, or
interest on the Debentures.

          In
the event that, notwithstanding the foregoing, any payment shall be received by
the Trustee when such payment is prohibited by the preceding paragraph of this
Section 15.2, such payment shall, subject to Section 15.7, be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment

47

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
15.3.    Liquidation,
Dissolution, Bankruptcy. Upon any payment by the Company or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to creditors upon any dissolution or winding-up
or liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings,
all amounts due upon all Senior Indebtedness of the Company shall first be paid
in full, or payment thereof provided for in money in accordance with its terms,
before any payment is made by the Company, on account of the principal (and
premium, if any) or interest on the Debentures. Upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Securityholders or the Trustee would
be entitled to receive from the Company, except for the provisions of this
Article XV, shall be paid by the Company, or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Securityholders or by the Trustee under this Indenture
if received by them or it, directly to the holders of Senior Indebtedness (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
before all Senior Indebtedness 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, 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 Debentures to the payment of all Senior Indebtedness, that may at the time
be outstanding, provided that (i) such Senior Indebtedness is assumed by the
new corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of such Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization or readjustment.
The consolidation of the Company with, or the merger of the Company into,
another corporation or the liquidation or dissolution of the Company following
the conveyance or transfer 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 consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article XI of this Indenture.
Nothing in Section 15.2 or in this Section shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.6 of this Indenture.

48

          Section
15.4.    Subrogation.
Subject to the payment in full of all Senior Indebtedness, 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 the principal of (and premium,
if any) and interest on the Debentures shall be paid in full. 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 Debentures 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 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 or in the
Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures 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 Debentures and creditors of the Company,
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XV of the holders
of such Senior Indebtedness in respect of cash, property or securities of the
Company, received upon the exercise of any such remedy.

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

          Section
15.5.    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
15.6.    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
monies to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article XV. Notwithstanding the provisions of this Article
XV or any other provision of this Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Debentures
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

49

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 2 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 Debenture), 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 2 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 to be a holder of Senior Indebtedness (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
15.7.    Rights of the
Trustee; Holders of Senior Indebtedness. The Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article XV in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.

          With
respect to the holders of Senior Indebtedness, 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 against the Trustee. The Trustee shall not 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 6.6.

          Section
15.8.    Subordination
May Not Be Impaired. No right of any present or future holder of
any Senior Indebtedness 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 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 Debentures to the holders of such Senior Indebtedness, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, such Senior

50

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; (ii) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing such Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of such Senior Indebtedness; and (iv) exercise or refrain from exercising any
rights against the Company, and any other Person.

Signatures appear on the following page

51

          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.

	
 

	
 

	
 

	
 

	
ALLIANCE
  FINANCIAL CORPORATION

	
 

	
 

	
 

	
 

	
By

	
/s/ J.
  Daniel Mohr

	
 

	
 

	

	
 

	
 

	
Name: J.
  Daniel Mohr

	
 

	
 

	
Title:
  Treasurer & CFO

	
 

	
 

	
 

	
 

	
WILMINGTON
  TRUST COMPANY, as Trustee

	
 

	
 

	
 

	
 

	
By

	
/s/ Michele
  C. Harra

	
 

	
 

	

	
 

	
 

	
Name:
  Michele C. Harra

	
 

	
 

	
Title:
  Financial Service Officer

52

EXHIBIT A

FORM OF FLOATING RATE JUNIOR SUBORDINATED
DEFERRABLE INTEREST

DEBENTURE

[FORM OF FACE OF SECURITY]

          THIS
SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE
UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL
DEPOSIT INSURANCE CORPORATION.

          THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW. 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 AND ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE)
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF
WHICH MAY BE OBTAINED FROM THE COMPANY.

          THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF 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 THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER
OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR
ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS
NOT PROHIBITED BY 

A-1

SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO
HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT
AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN
TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON
ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

          THIS
SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN
AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000.00 AND MULTIPLES OF
$1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED
TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

          THE
HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

          IN
CONNECTION WITH ANY TRANSFER, THE HOLDER 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.

Floating Rate Junior Subordinated Deferrable
Interest Debenture

of

Alliance Financial Corporation

September 21, 2006

          Alliance
Financial Corporation, a New York corporation (the “Company” which term
includes any successor Person under the Indenture hereinafter referred to), for
value received promises to pay to Wilmington Trust Company, not in its
individual capacity but solely as Institutional Trustee for Alliance Financial
Capital Trust II (the “Holder”) or registered assigns, the principal sum of
fifteen million four hundred sixty-four thousand dollars ($15,464,000.00) on
December 15, 2036, and to pay interest on said principal sum from September 21,
2006, 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 or if such day is not a Business Day, then the next succeeding
Business Day (each such date, an “Interest Payment Date”) (it being understood
that interest accrues for any such non-Business Day), commencing on the
Interest Payment Date in December 2006, at an annual rate equal to 7.04%
beginning on (and including) the date of original issuance and ending on (but
excluding) the Interest Payment Date in December 2006 and at an annual rate for
each successive period beginning on (and including) the Interest Payment Date
in December 2006, and each succeeding Interest Payment Date, and ending on (but
excluding) the next succeeding Interest Payment Date (each a “Distribution
Period”), equal to 3-Month LIBOR, determined as described below, plus 1.65%
(the “Coupon Rate”), applied to the principal amount hereof, until the
principal hereof is paid or duly provided for or made available for payment,
and on any overdue principal and (without duplication and to the extent that
payment of such interest is enforceable under applicable 

A-2

law) on any
overdue installment of interest (including Additional Interest) at the Interest
Rate in effect for each applicable period, compounded quarterly, from the dates
such amounts are due until they are paid or made available for payment. The
amount of interest payable for any period will be computed on the basis of the
actual number of days in the Distribution Period concerned divided by 360. 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 Debenture (or one or more Predecessor Securities) is
registered at the close of business on the regular record date for such
interest installment, which shall be fifteen Business Days prior to the day on
which the relevant Interest Payment Date occurs. Any such interest installment
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such regular record date and may be paid to the Person in
whose name this Debenture (or one or more Predecessor Securities) is registered
at the close of business on a special record date.

          “3-Month
LIBOR” as used herein, means the London interbank offered interest rate for
three-month U.S. dollar deposits determined by the Trustee in the following
order of priority: (i) the rate (expressed as a percentage per annum) for U.S.
dollar deposits having a three-month maturity that appears on Telerate Page
3750 as of 11:00 a.m. (London time) on the related Determination Date
(“Telerate Page 3750” means the display designated as “Page 3750” on the
Moneyline Telerate Service or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Trustee will
request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date. If at least two quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Trustee will
request four major New York City banks to provide such banks’ offered
quotations (expressed as percentages per annum) to leading European banks for
loans in U.S. dollars as of 11:00 a.m. (London time) on such Determination Date.
If at least two such quotations are provided, 3-Month LIBOR will be the
arithmetic mean of such quotations; and (iv) if fewer than two such quotations
are provided as requested in clause (iii) above, 3-Month LIBOR will be a
3-Month LIBOR determined with respect to the Distribution Period immediately
preceding such current Distribution Period. If the rate for U.S. dollar
deposits having a three-month maturity that initially appears on Telerate Page
3750 as of 11:00 a.m. (London time) on the related Determination Date is
superseded on the Telerate Page 3750 by a corrected rate by 12:00 noon (London
time) on such Determination Date, then the corrected rate as so substituted on
the applicable page will be the applicable 3-Month LIBOR for such Determination
Date. As used herein, “Determination Date” means the date that is two London
Banking Days (i.e., a business day in which dealings in deposits in U.S.
dollars are transacted in the London interbank market) preceding the
commencement of the relevant Distribution Period.

          The
Interest Rate for any Distribution Period will at no time be higher than the
maximum rate then permitted by New York law as the same may be modified by
United States law.

          All
percentages resulting from any calculations on the Debentures 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)).

A-3

          The
principal of and interest on this Debenture shall be payable at the office or
agency of the Trustee (or other paying agent appointed by the Company)
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be
made by check mailed to the registered holder at such address as shall appear
in the Debenture Register if a request for a wire transfer by such holder has
not been received by the Company or by wire transfer to an account
appropriately designated by the holder hereof. Notwithstanding the foregoing,
so long as the holder of this Debenture is the Institutional Trustee, the
payment of the principal of and interest on this Debenture will be made in
immediately available funds at such place and to such account as may be
designated by the Trustee.

          So
long as no Acceleration Event of Default has occurred and is continuing, the
Company shall have the right, from time to time, and without causing an Event
of Default, to defer payments of interest on the Debentures by extending the
interest payment period on the Debentures at any time and from time to time
during the term of the Debentures, for up to 20 consecutive quarterly periods
(each such extended interest payment period, an “Extension Period”), during
which Extension Period no interest (including Additional Interest) shall be due
and payable (except any Additional Sums that may be due and payable). No
Extension Period may end on a date other than an Interest Payment Date. During
an Extension Period, interest will continue to accrue on the Debentures, and
interest on such accrued interest will accrue at an annual rate equal to the
Interest Rate in effect for such Extension Period, compounded quarterly from
the date such interest would have been payable were it not for the Extension
Period, to the extent permitted by law (such interest referred to herein as
“Additional Interest”). At the end of any such Extension Period the Company
shall pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date; provided further,
however, that during any such Extension Period, the Company shall not
and shall not permit any Affiliate to engage in any of the activities or
transactions described on the reverse side hereof and in the Indenture. Prior
to the termination of any Extension Period, the Company may further extend such
period, provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Company may commence a new Extension Period, subject
to the foregoing requirements. No interest or Additional Interest shall be due
and payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest. The Company must give the
Trustee notice of its election to begin or extend an Extension Period by the
close of business at least 15 Business Days prior to the Interest Payment Date
with respect to which interest on the Debentures would have been payable except
for the election to begin or extend such Extension Period.

          The
indebtedness evidenced by this Debenture is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her attorney-in-fact
for any and all such purposes. Each holder hereof, by his or her 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.

          This
Debenture shall not be entitled to any benefit under the Indenture hereinafter
referred to, 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-4

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

A-5

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

	
 

	
 

	
 

	
 

	
ALLIANCE
  FINANCIAL CORPORATION

	
 

	
 

	
 

	
 

	
By

	
/s/ J.
  Daniel Mohr

	
 

	
 

	

	
 

	
 

	
Name: J.
  Daniel Mohr

	
 

	
 

	
Title:
  Treasurer & CFO

CERTIFICATE OF AUTHENTICATION

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

	
 

	
 

	
 

	
 

	
WILMINGTON TRUST COMPANY, as Trustee

	
 

	
 

	
 

	
 

	
By:

	
/s/ Michele
  C. Harra

	
 

	
 

	

	
 

	
 

	
Authorized
  Officer

A-6

[FORM OF REVERSE OF DEBENTURE]

          This
Debenture is one of the floating rate junior subordinated deferrable interest
debentures of the Company, all issued or to be issued under and pursuant to the
Indenture dated as of September 21, 2006 (the “Indenture”), duly executed and
delivered between the Company and the Trustee, to which Indenture 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 Debentures. The Debentures are limited in aggregate
principal amount as specified in the Indenture.

          Upon
the occurrence and continuation of a Special Event prior to the Interest
Payment Date in September 2011, the Company shall have the right to redeem the
Debentures in whole, but not in part, at any Interest Payment Date, within 120
days following the occurrence of such Special Event, at the Special Redemption
Price.

          In
addition, the Company shall have the right to redeem the Debentures, in whole
or in part, but in all cases in a principal amount with integral multiples of
$1,000.00, on any Interest Payment Date on or after the Interest Payment Date
in September 2011, at the Redemption Price.

          Prior
to 10:00 a.m. New York City time on the Redemption Date or Special Redemption
Date, as applicable, the Company will deposit with the Trustee or with one or
more paying agents an amount of money sufficient to redeem on the Redemption
Date or the Special Redemption Date, as applicable, all the Debentures so
called for redemption at the appropriate Redemption Price or Special Redemption
Price.

          If
all, or less than all, the Debentures are to be redeemed, the Company will give
the Trustee notice not less than 45 nor more than 60 days, respectively, prior
to the Redemption Date or Special Redemption Date, as applicable, as to the
aggregate principal amount of Debentures to be redeemed and the Trustee shall
select, in such manner as in its sole discretion it shall deem appropriate and
fair, the Debentures or portions thereof (in integral multiples of $1,000.00)
to be redeemed.

          Notwithstanding
the foregoing, any redemption of Debentures by the Company shall be subject to
the receipt of any and all required regulatory approvals.

          In
case an Acceleration Event of Default shall have occurred and be continuing,
upon demand of the Trustee, the principal of all of the Debentures shall become
due and payable in the manner, with the effect and subject to the conditions
provided in the Indenture.

          The
Indenture contains provisions permitting the Company and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal
amount of the Debentures at the time outstanding, to execute supplemental
indentures 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 Debentures; provided, however, that no such supplemental
indenture shall without the consent of the holders of each Debenture then
outstanding and affected thereby (i) change the fixed maturity of any
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof or make the principal thereof or any
interest or premium thereon payable in any coin or currency other than that
provided in the Debentures, or impair or affect the right of any Securityholder
to institute suit for payment thereof or impair the right of repayment, if any,
at the option of the holder, or (ii) reduce the aforesaid percentage of
Debentures the holders of which are required to consent to any such supplemental
indenture.

A-7

          The
Indenture also contains provisions permitting the holders of a majority in
aggregate principal amount of the Debentures at the time outstanding on behalf
of the holders of all of the Debentures to waive (or modify any previously
granted waiver of) any past default or Event of Default, and its consequences,
except a default (a) in the payment of principal of, premium, if any, or
interest on any of the Debentures, (b) in respect of covenants or provisions
hereof or of the Indenture which cannot be modified or amended without the
consent of the holder of each Debenture affected, or (c) in respect of the
covenants contained in Section 3.9 of the Indenture; provided, however,
that if the Debentures are held by the Trust or a trustee of such trust, such
waiver or modification to such waiver shall not be effective until the holders
of a majority in Liquidation Amount of Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver, provided, further,
that if the consent of the holder of each outstanding Debenture is required,
such waiver shall not be effective until each holder of the Trust Securities of
the Trust shall have consented to such waiver. Upon any such waiver, the
default covered thereby shall be deemed to be cured for all purposes of the
Indenture and the Company, the Trustee and the holders of the Debentures shall
be restored to their former positions and rights hereunder, respectively; but
no 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 the Indenture, said
default or Event of Default shall for all purposes of the Debentures and the
Indenture be deemed to have been cured and to be not continuing.

          No
reference herein to the Indenture and no provision of this Debenture or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest, including Additional Interest, on this Debenture at the time and
place and at the rate and in the money herein prescribed.

          The
Company has agreed that if Debentures are initially issued to the Trust or a
trustee of such Trust in connection with the issuance of Trust Securities by
the Trust (regardless of whether Debentures continue to be held by such Trust)
and (i) there shall have occurred and be continuing an Event of Default, (ii)
the Company shall be in default with respect to its payment of any obligations
under the Capital Securities Guarantee, or (iii) the Company shall have given
notice of its election to defer payments of interest on the Debentures by
extending the interest payment period as provided herein and such Extension
Period, or any extension thereof, shall be continuing, then the Company shall
not, and shall not allow any Affiliate of the Company to, (x) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company’s capital stock or its
Affiliates’ capital stock (other than payments of dividends or distributions to
the Company) or make any guarantee payments with respect to the foregoing or
(y) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company or any Affiliate
that rank pari passu in all
respects with or junior in interest to the Debentures (other than, with respect
to clauses (x) and (y) above, (1) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company 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, in
connection with a dividend reinvestment or stockholder stock purchase plan or
in connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
if any, (2) 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, (3) 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, (4) any
declaration of a dividend in connection with any stockholders’ rights plan, or
the issuance of rights, stock or other property under any stockholders’ rights
plan, or the redemption or repurchase of rights pursuant thereto, (5) any
dividend in the form of stock, warrants, options or other rights where the 

A-8

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
and any cash payments in lieu of fractional shares issued in connection
therewith, or (6) payments under the Capital Securities Guarantee).

          The
Debentures are issuable only in registered, certificated form without coupons
and in minimum denominations of $100,000.00 and any multiple of $1,000.00 in
excess thereof. As provided in the Indenture and subject to the transfer
restrictions and limitations as may be contained herein and therein from time
to time, this Debenture is transferable by the holder hereof on the Debenture
Register of the Company. Upon due presentment for registration of transfer of any
Debenture at the Principal Office of the Trustee or at any office or agency of
the Company maintained for such purpose as provided in Section 3.2 of the
Indenture, 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
Debenture for a like aggregate principal amount. All Debentures 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 the Trustee or the Authenticating Agent duly
executed by the holder or his attorney duly authorized in writing. No service
charge shall be made for any exchange or registration of transfer of
Debentures, 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.

          Prior
to due presentment for registration of transfer of any Debenture, the Company,
the Trustee, any Authenticating Agent, any paying agent, any transfer agent and
any Debenture registrar may deem the Person in whose name such Debenture shall
be registered upon the Debenture Register to be, and may treat him as, the
absolute owner of such Debenture (whether or not such Debenture shall be
overdue) for the purpose of receiving payment of or on account of the principal
of, premium, if any, and interest on such Debenture and for all other purposes;
and neither the Company nor the Trustee nor any Authenticating Agent nor any
paying agent nor any transfer agent nor any Debenture registrar shall be
affected by any notice to the contrary. All such payments so made to any holder
for the time being or upon his 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 Debenture.

          No
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, 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 the Indenture or in any supplemental indenture, or in any such
Debenture, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, officer or director,
as such, past, present or future, of the Company or of any successor Person of
the Company, either directly or through the Company or any successor Person 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 the
Indenture and the issue of the Debentures.

          Capitalized
terms used and not defined in this Debenture shall have the meanings assigned
in the Indenture dated as of the date of original issuance of this Debenture
between the Trustee and the Company.

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

A-9

EXHIBIT B

FORM OF CERTIFICATE TO TRUSTEE

          Pursuant
to Section 3.5 of the Indenture between Alliance Financial Corporation, as the
Company (the “Company”), and Wilmington Trust Company, as Trustee, dated as of
September 21, 2006 (the “Indenture”), the undersigned hereby certifies as
follows:

	
 

	
 

	
 

	
 

	
1.

	
In my
  capacity as an officer of the Company, I would normally have knowledge of any
  default by the Company during the last fiscal year in the performance of any
  covenants of the Company contained in the Indenture.

	
 

	
 

	
 

	
 

	
2.

	
[To my
  knowledge, the Company is not in default in the performance of any covenants
  contained in the Indenture.

	
 

	
 

	
 

	
 

	
 

	
or, alternatively: 

	
 

	
 

	
 

	
 

	
 

	
I am aware
  of the default(s) in the performance of covenants in the Indentures, as
  specified below.]

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

          IN
WITNESS WHEREOF, the undersigned has executed this Certificate.

Date:

	
 

	
 

	
 

	
 

	
 

	

	
 

	
 

	
Name:

	
 

	
 

	
Title:

B-1Exhibit 10.1

AMENDED AND RESTATED DECLARATION

OF TRUST

by and among

WILMINGTON TRUST COMPANY,

as Delaware Trustee,

WILMINGTON TRUST COMPANY,

as Institutional Trustee,

ALLIANCE
FINANCIAL CORPORATION,

as Sponsor,

and

J. DANIEL
MOHR, JOHN H. WATT, JR. and

JACK H. WEBB,

as Administrators,

Dated as of September 21,
2006

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
 

	

	
 

	
ARTICLE I
  INTERPRETATION AND DEFINITIONS

	
 

	
1

	
 

	
Section 1.1.

	
 

	
Definitions

	
 

	
1

	
 

	
 

	
 

	
ARTICLE II
  ORGANIZATION

	
 

	
8

	
 

	
Section 2.1.

	
 

	
Name

	
 

	
8

	
 

	
Section 2.2.

	
 

	
Office

	
 

	
8

	
 

	
Section 2.3.

	
 

	
Purpose

	
 

	
8

	
 

	
Section 2.4.

	
 

	
Authority

	
 

	
8

	
 

	
Section 2.5.

	
 

	
Title to
  Property of the Trust

	
 

	
8

	
 

	
Section 2.6.

	
 

	
Powers and
  Duties of the Trustees and the Administrators

	
 

	
9

	
 

	
Section 2.7.

	
 

	
Prohibition
  of Actions by the Trust and the Institutional Trustee

	
 

	
12

	
 

	
Section 2.8.

	
 

	
Powers and
  Duties of the Institutional Trustee

	
 

	
13

	
 

	
Section 2.9.

	
 

	
Certain
  Duties and Responsibilities of the Trustees and Administrators

	
 

	
14

	
 

	
Section
  2.10.

	
 

	
Certain
  Rights of Institutional Trustee

	
 

	
15

	
 

	
Section
  2.11.

	
 

	
Delaware
  Trustee

	
 

	
17

	
 

	
Section
  2.12.

	
 

	
Execution of
  Documents

	
 

	
17

	
 

	
Section
  2.13.

	
 

	
Not
  Responsible for Recitals or Issuance of Securities

	
 

	
17

	
 

	
Section
  2.14.

	
 

	
Duration of
  Trust

	
 

	
17

	
 

	
Section
  2.15.

	
 

	
Mergers

	
 

	
18

	
 

	
 

	
 

	
ARTICLE III
  SPONSOR

	
 

	
19

	
 

	
Section 3.1.

	
 

	
Sponsor’s
  Purchase of Common Securities

	
 

	
19

	
 

	
Section 3.2.

	
 

	
Responsibilities
  of the Sponsor

	
 

	
19

	
 

	
Section 3.3.

	
 

	
Expenses

	
 

	
19

	
 

	
Section 3.4.

	
 

	
Right to
  Proceed

	
 

	
20

	
 

	
 

	
 

	
ARTICLE IV
  INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

	
 

	
20

	
 

	
Section 4.1.

	
 

	
Number of
  Trustees

	
 

	
20

	
 

	
Section 4.2.

	
 

	
Delaware
  Trustee; Eligibility

	
 

	
20

	
 

	
Section 4.3.

	
 

	
Institutional
  Trustee; Eligibility

	
 

	
21

	
 

	
Section 4.4.

	
 

	
Administrators

	
 

	
21

	
 

	
Section 4.5.

	
 

	
Appointment,
  Removal and Resignation of Trustees and Administrators

	
 

	
21

	
 

	
Section 4.6.

	
 

	
Vacancies
  Among Trustees

	
 

	
23

	
 

	
Section 4.7.

	
 

	
Effect of
  Vacancies

	
 

	
23

	
 

	
Section 4.8.

	
 

	
Meetings of
  the Trustees and the Administrators

	
 

	
23

	
 

	
Section 4.9.

	
 

	
Delegation
  of Power

	
 

	
24

	
 

	
Section
  4.10.

	
 

	
Conversion,
  Consolidation or Succession to Business

	
 

	
24

	
 

	
 

	
 

	
ARTICLE V
  DISTRIBUTIONS

	
 

	
24

	
 

	
Section 5.1.

	
 

	
Distributions

	
 

	
24

	
 

	
 

	
 

	
ARTICLE VI
  ISSUANCE OF SECURITIES

	
 

	
24

	
 

	
Section 6.1.

	
 

	
General
  Provisions Regarding Securities

	
 

	
24

	
 

	
Section 6.2.

	
 

	
Paying
  Agent, Transfer Agent and Registrar

	
 

	
25

	
 

	
Section 6.3.

	
 

	
Form and
  Dating

	
 

	
25

	
 

	
Section 6.4.

	
 

	
Book-Entry
  Capital Securities

	
 

	
26

	
 

	
Section 6.5.

	
 

	
Mutilated,
  Destroyed, Lost or Stolen Certificates

	
 

	
27

i

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Section 6.6.

	
 

	
Temporary
  Securities

	
 

	
28

	
 

	
Section 6.7.

	
 

	
Cancellation

	
 

	
28

	
 

	
Section 6.8.

	
 

	
CUSIP
  Numbers

	
 

	
28

	
 

	
Section 6.9.

	
 

	
Rights of
  Holders; Waivers of Past Defaults

	
 

	
28

	
 

	
 

	
 

	
ARTICLE VII
  DISSOLUTION AND TERMINATION OF TRUST

	
 

	
30

	
 

	
Section 7.1.

	
 

	
Dissolution
  and Termination of Trust

	
 

	
30

	
 

	
 

	
 

	
ARTICLE VIII
  TRANSFER OF INTERESTS

	
 

	
31

	
 

	
Section 8.1.

	
 

	
General

	
 

	
31

	
 

	
Section 8.2.

	
 

	
Transfer
  Procedures and Restrictions

	
 

	
32

	
 

	
Section 8.3.

	
 

	
Deemed
  Security Holders

	
 

	
34

	
 

	
 

	
 

	
ARTICLE IX
LIMITATION OF LIABILITY OF
  HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS

	
 

	
34

	
 

	
Section 9.1.

	
 

	
Liability

	
 

	
34

	
 

	
Section 9.2.

	
 

	
Exculpation

	
 

	
35

	
 

	
Section 9.3.

	
 

	
Fiduciary
  Duty

	
 

	
35

	
 

	
Section 9.4.

	
 

	
Indemnification

	
 

	
35

	
 

	
Section 9.5.

	
 

	
Outside
  Businesses

	
 

	
37

	
 

	
Section 9.6.

	
 

	
Compensation;
  Fee

	
 

	
38

	
 

	
 

	
 

	
ARTICLE X
  ACCOUNTING

	
 

	
38

	
 

	
Section
  10.1.

	
 

	
Fiscal Year

	
 

	
38

	
 

	
Section
  10.2.

	
 

	
Certain
  Accounting Matters

	
 

	
38

	
 

	
Section 10.3.

	
 

	
Banking

	
 

	
39

	
 

	
Section
  10.4.

	
 

	
Withholding

	
 

	
39

	
 

	
 

	
 

	
ARTICLE XI
  AMENDMENTS AND MEETINGS

	
 

	
39

	
 

	
Section
  11.1.

	
 

	
Amendments

	
 

	
39

	
 

	
Section
  11.2.

	
 

	
Meetings of
  the Holders of Securities; Action by Written Consent

	
 

	
41

	
 

	
 

	
 

	
ARTICLE XII
  REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE

	
 

	
42

	
 

	
Section
  12.1.

	
 

	
Representations
  and Warranties of Institutional Trustee

	
 

	
42

	
 

	
Section
  12.2.

	
 

	
Representations
  of the Delaware Trustee

	
 

	
42

	
 

	
 

	
 

	
ARTICLE XIII
  MISCELLANEOUS

	
 

	
43

	
 

	
Section
  13.1.

	
 

	
Notices

	
 

	
43

	
 

	
Section
  13.2.

	
 

	
Governing
  Law

	
 

	
44

	
 

	
Section
  13.3.

	
 

	
Intention of
  the Parties

	
 

	
44

	
 

	
Section
  13.4.

	
 

	
Headings

	
 

	
44

	
 

	
Section
  13.5.

	
 

	
Successors
  and Assigns

	
 

	
44

	
 

	
Section
  13.6.

	
 

	
Partial
  Enforceability

	
 

	
44

	
 

	
Section
  13.7.

	
 

	
Counterparts

	
 

	
45

	
 

	
 

	
Annex I

	
Terms of
  Securities

	
Exhibit A-1

	
Form of
  Capital Security Certificate

	
Exhibit A-2

	
Form of
  Common Security Certificate

	
Exhibit B

	
Specimen of
  Initial Debenture

	
Exhibit C

	
Placement
  Agreement

ii

AMENDED AND RESTATED

DECLARATION OF TRUST

OF

ALLIANCE
FINANCIAL CAPITAL TRUST II

September 21, 2006

          AMENDED AND
RESTATED DECLARATION OF TRUST (“Declaration”) dated and effective as of
September 21, 2006, by the Trustees (as defined herein), the
Administrators (as defined herein), the Sponsor (as defined herein) and by the holders,
from time to time, of undivided beneficial interests in the Trust (as defined
herein) to be issued pursuant to this Declaration; 

          WHEREAS,
the Trustees, the Administrators and the Sponsor established Alliance Financial
Capital Trust II (the “Trust”), a statutory trust under the Statutory
Trust Act (as defined herein) pursuant to a Declaration of Trust dated as of
September 5, 2006 (the “Original Declaration”), and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on September 5,
2006, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain debentures of the Debenture Issuer
(as defined herein);  

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

          WHEREAS,
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, the Trustees
declare that all assets contributed to the Trust will be held in trust for the
benefit of the holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration.
The parties hereto hereby 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 have the
respective meanings assigned to them in this Section 1.1;

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

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

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

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

          “Acceleration
Event of Default” has the meaning set forth in the Indenture.

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

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

          “Administrators”
means each of J. Daniel Mohr, John H. Watt, Jr. and Jack H.
Webb, solely in such Person’s capacity as Administrator of the Trust created
and continued hereunder and not in such Person’s individual capacity, or such
Administrator’s successor in interest in such capacity, or any successor
appointed as herein provided.

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

          “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 shall enter 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
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of
90 consecutive days; or

          (b)     such
Person 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 such Person of any substantial part of its property, or shall make
any general assignment for the benefit of creditors, or shall fail generally to
pay its debts as they become due.

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

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

          “Capital
Securities” has the meaning set forth in paragraph 1(a) of Annex I.

          “Capital
Security Certificate” means a definitive Certificate in fully registered form
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.

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          “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.

          “Common
Securities” has the meaning set forth in paragraph 1(b) of Annex I.

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

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

          “Corporate
Trust Office” means the office of the Institutional Trustee at which the
corporate trust business of the Institutional Trustee shall, at any particular
time, be principally administered, which office at the date of execution of
this Declaration is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-1600, Attn: Corporate Trust Administration.

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

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

          “Creditor”
has the meaning set forth in Section 3.3.

          “Debenture
Issuer” means Alliance Financial Corporation, a New York corporation, in
its capacity as issuer of the Debentures under the Indenture.

          “Debenture
Trustee” means Wilmington Trust Company, as trustee under the Indenture
until a successor is appointed thereunder, and thereafter means such successor
trustee.

          “Debentures”
means the Floating Rate Junior Subordinated Deferrable Interest Debentures due
2036 to be issued by the Debenture Issuer under the Indenture.

          “Defaulted
Interest” has the meaning set forth in the Indenture.

          “Definitive
Capital Securities Certificates” means Capital Securities issued in
certificated, fully registered form that are not Global Capital Securities.

          “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 Administrators or any successor
thereto. DTC will be the initial Depositary.

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

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

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

          “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(b) of
Annex I.

          “Distribution
Period” means (i) with respect to the Distribution paid on the first
Distribution Payment Date, the period beginning on (and including) the date of
original issuance and ending on (but excluding) the Distribution Payment Date
in December 2006 and (ii) thereafter, with respect to a Distribution paid
on each successive Distribution Payment Date, the period beginning on (and
including) the preceding Distribution Payment Date and ending on (but
excluding) such current Distribution Payment Date.

          “Distribution
Rate” means, for the Distribution Period beginning on (and including) the
date of original issuance and ending on (but excluding) the Distribution Payment
Date in December 2006, the rate per annum of 7.04%, and for each Distribution
Period beginning on or after the Distribution Payment Date in December 2006,
the Coupon Rate for such Distribution Period.

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

          “Event
of Default” means any one of the following events (whatever the reason for
such event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

          (a)     the
occurrence of an Indenture Event of Default; or

          (b)     default
by the Trust in the payment of any Redemption Price or Special Redemption Price
of any Security when it becomes due and payable; or

          (c)     default
in the performance, or breach, in any material respect, of any covenant or
warranty of the Institutional Trustee in this Declaration (other than those specified
in clause (a) or (b) above) and continuation of such default or breach for
a period of 60 days after there has been given, by registered or certified
mail to the Institutional Trustee and to the Sponsor by the Holders of at least
25% in aggregate liquidation amount of the outstanding Capital Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder; or

          (d)     the
occurrence of a Bankruptcy Event with respect to the Institutional Trustee if a
successor Institutional Trustee has not been appointed within 90 days
thereof.

          “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(b) 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 Delaware Trustee and
any officers, directors, shareholders, members, partners,

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employees, representatives, custodians, nominees or agents
of the
Institutional Trustee or Delaware Trustee.

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

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

          “Guarantee”
means the guarantee agreement to be dated as of the Closing Date, of the
Sponsor in respect of the Capital Securities.

          “Holder”
means a Person in whose name a Certificate representing a Security is
registered, 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, as such Indenture and any supplemental
indenture may be amended, supplemented or otherwise modified from time to time.

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

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

          “Interest”
means any interest due on the Debentures including any Additional Interest and
Defaulted Interest.

          “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.

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

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

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

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

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

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

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

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

          “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 Depositary Participant.

          “Paying
Agent” has the meaning specified in Section 6.2.

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

          “Placement
Agreement” means the Placement Agreement relating to the offering and sale
of Capital Securities in the form of Exhibit C.

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

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

          “QIB”
means a “qualified institutional buyer” as defined in Rule 144A under the
Securities Act.

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

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

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

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

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

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

          “Responsible
Officer” means, with respect to the Institutional Trustee, any officer
within the Corporate Trust Office of the Institutional Trustee, including any
vice-president, any assistant vice-president, 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

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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(b).

          “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.

          “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 Alliance Financial Corporation, a New York corporation, or any successor
entity in a merger, consolidation or amalgamation, in its capacity as sponsor
of the Trust.

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

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

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

          “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.

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

          “3-Month
LIBOR” has the meaning set forth in paragraph 4(a) of Annex I.

          “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).

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          “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 “Alliance Financial Capital Trust II,” as such name may be
modified from time to time by the Administrators following written notice to
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 is c/o Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware  19890-1600.
On at least 10 Business Days written notice to the Holders of the
Securities, the Administrators may designate another principal office, which
shall be in a state of the United States or in 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 to acquire the
Debentures, (c) to facilitate direct investment in the assets of the Trust
through issuance of the Common Securities and the Capital Securities and
(d) except as otherwise limited herein, to engage in only those other
activities necessary or incidental thereto.
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 in
accordance with its powers shall constitute the act of and serve to bind the
Trust.  In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust.
Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration.  The Administrators shall have only those
ministerial duties set forth herein with respect to accomplishing the purposes
of the Trust and are not intended to be trustees or fiduciaries with respect to
the Trust or the Holders.  The Institutional
Trustee shall have the right, but shall not be obligated except as provided in
Section 2.6, to perform those duties assigned to the Administrators.

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

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          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 Trustees and the Administrators
shall have the authority to enter into all transactions and agreements
determined by the Institutional Trustee 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 and authority 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 and deliver 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;

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
          (D)
  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;

	
 

	
 

	
 

	
 

	
 

	
 

	
          (E)
  the consent to the appointment of a Paying Agent, Transfer Agent and
  Registrar in accordance with this Declaration, which consent shall not be
  unreasonably withheld or delayed;

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
          (H)
  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;

	
 

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
 

	
          (J)
  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; and

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

	
 

	
 

	
 

	
 

	
          (ii)      As
  among the Trustees and the Administrators, the Institutional Trustee shall
  have the power, duty and authority 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 (provided that such Event of Default is not
  by or with respect to the Institutional Trustee) the taking of any action
  incidental to the foregoing as the Institutional Trustee may from time to
  time determine is necessary or advisable to give effect to the terms of this
  Declaration and protect and conserve the Trust Property for the benefit of
  the Holders (without consideration of the effect of any such action on any
  particular Holder); and

	
 

	
 

	
 

	
 

	
 

	
          (J)
  to take all action that may be necessary 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.

	
 

	
 

	
 

	
 

	
          (iii)     The
  Institutional Trustee shall have the power and authority 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)(D), (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 

10

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 reasonably be
expected (x) to cause the Trust to fail or cease to qualify as a “grantor
trust” for United States federal income tax purposes or (y) to require the
trust to register as an Investment Company under the Investment Company Act,
(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, defend all claims and demands of all Persons at
any time claiming any lien on any of the Trust Property adverse to the interest
of the Trust or the Holders in their capacity as Holders.

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
          (iii)     the
  negotiation of the terms of, and the execution and delivery of, the Placement
  Agreement providing for the sale of the Capital Securities; and

	
 

	
 

	
 

	
          (iv)     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 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
the Trust will not (i) be deemed to be an Investment Company required to be
registered under the Investment Company Act, and (ii) fail to be
classified as a “grantor trust” for United States federal income tax purposes.
The Administrators and the Holders of a Majority in liquidation amount of the
Common Securities shall 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 this connection, 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, the
Certificate of Trust or this Declaration, as amended from time to time, that
each of the Administrators and the Holders of a Majority in liquidation amount
of the Common Securities determines in their discretion to be necessary or
desirable for such purposes.

          (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 and the
Administrators shall have no obligations with respect to such expenses (for
purposes of clarification, this Section 2.6(e) does not contemplate the
payment by the Sponsor of acceptance or annual administration fees owing to the
Trustees under this 

11

Declaration or the fees and expenses of the Trustees’
counsel in
connection with the closing of the transactions contemplated by this
Declaration).

          (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 and the Administrators for the benefit of the Trust in accordance with
this Declaration.

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

          Section
2.7. Prohibition of Actions by the Trust and the Institutional Trustee.

          (a)     The
Trust shall not, and the Institutional Trustee 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
shall cause the Trust not to:

	
 

	
 

	
 

	
 

	
          (i)      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;

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
          (v)      possess
  any power or otherwise act in such a way as to vary the Trust assets or the
  terms of the Securities in any way whatsoever other than as expressly provided
  herein;

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
          (vii)    carry
  on any “trade or business” as that phrase is used in the Code; or

	
 

	
 

	
 

	
          (viii)   other
  than as provided in this Declaration (including Annex I),
  (A) direct the time, method and place of exercising any trust or power
  conferred upon the Debenture Trustee with respect to the Debentures,
  (B) waive any past default that is waivable under the Indenture,
  (C) exercise any right to rescind or annul any declaration that the
  principal of all the Debentures shall be due and payable, or (D) 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 to the effect that such modification
  will not cause the Trust to cease to be classified as a “grantor trust” for
  United States federal income tax purposes.

12

          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 and the
Holders of the Securities. 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:

	
 

	
 

	
 

	
          (i)     establish
  and maintain a segregated non-interest bearing trust account (the “Property
  Account”) 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, or cause the Paying Agent to 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 certain
  circumstances pursuant to the terms of the Securities.

          (d)     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 which arises out of or in connection with an Event of
Default of which a Responsible Officer of the Institutional Trustee has actual
knowledge or arises out of the Institutional Trustee’s duties and obligations
under this Declaration; 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 principal on the Debentures
on the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of the Capital Securities
may directly institute a proceeding for enforcement of payment to such Holder
of the principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation amount of the Capital Securities of such
Holder (a “Direct Action”) on or after the respective due date specified
in the Debentures. In connection with such Direct Action, the rights of the
Holders of the Common Securities will be subrogated to the rights of such
Holder of the Capital Securities to the extent of any payment made by the
Debenture Issuer to such Holder of the Capital Securities in such Direct
Action; provided, however, that no Holder of the Common
Securities may exercise such right of subrogation so long as an Event of
Default with respect to the Capital Securities has occurred and is continuing.

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

13

	
 

	
 

	
 

	
          (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; or

	
 

	
 

	
 

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

          (f)     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.

          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 Administrators.

          (a)     The
Institutional Trustee, before the occurrence of any Event of Default and after
the curing or waiving of all such 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 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. Notwithstanding the foregoing, no provision of this
Declaration shall require any Trustee or Administrator to expend or risk their
own funds or otherwise incur any financial liability in the performance of any
of their duties hereunder, or in the exercise of any of their rights or powers
if it shall have reasonable grounds to believe that repayment of such funds or
adequate protection against such risk of 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 Administrators shall be subject to the provisions
of this Article. Nothing in this Declaration shall be construed to relieve an
Administrator or a Trustee from liability for its own negligent act, its own
negligent failure to act, or its own willful misconduct. To the extent that, at
law or in equity, a Trustee or an Administrator has duties and liabilities
relating to the Trust or to the Holders, such Trustee or such Administrator
shall not be liable to the Trust or to any Holder for such Trustee’s or such
Administrator’s good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of the Administrators or the Trustee otherwise existing at law or
in equity, are agreed by the Sponsor and the Holders to replace such other
duties and liabilities of the Administrators or the Trustees.

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

14

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.

          (d)     The
Institutional Trustee shall not be liable for its own acts or omissions
hereunder except as a result of its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (iii)   the
  Institutional Trustee’s sole duty with respect to the custody, safekeeping
  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 fiduciary accounts generally, subject to
  the protections and limitations on liability afforded to the Institutional
  Trustee under this Declaration;

	
 

	
 

	
 

	
          (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, 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 written instructions as to the course
of action to be taken and the Institutional Trustee shall take

15

such action, or refrain from taking such action, as the
Institutional
Trustee shall be instructed in writing, in which event the Institutional
Trustee shall have no liability except for its own negligence or willful
misconduct;

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

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

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

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

          (g)     the
Institutional Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Declaration at the request or direction
of any of the Holders pursuant to this Declaration, unless such Holders shall
have offered to the Institutional Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction; provided,
that nothing contained in this Section 2.10(g) shall be taken to relieve the
Institutional Trustee, subject to Section 2.9(b), upon the occurrence of an
Event of Default (that has not been cured or waived pursuant to Section 6.9),
to 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;

          (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 Capital Securities
which instructions may only be given by the Holders of the same proportion in
liquidation amount of the Capital Securities as would be entitled to direct the
Institutional Trustee under the terms of the Capital Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy
or right

16

or taking such other action until such instructions are
received, and
(iii) shall be fully protected in acting in accordance with such
instructions;

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

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

          (m)     the
Institutional Trustee shall not be charged with knowledge of an Event of
Default unless a Responsible Officer of the Institutional Trustee obtains
actual knowledge of such event or the Institutional Trustee receives written
notice of such event from any Holder, the Sponsor or the Debenture Trustee;

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

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

          Section 2.11. Delaware Trustee.
Notwithstanding
any other provision of this Declaration other than Section 4.1, the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of any of the Trustees or
the Administrators described in this Declaration (except as may be required
under the Statutory Trust Act). Except as set forth in Section 4.1, 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
on behalf of the Trust any documents that the Trustees or the Administrators,
as the case may be, have the power and authority to execute pursuant to Section
2.6.

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

          Section 2.14. Duration of Trust.
The
Trust, unless earlier dissolved pursuant to the provisions of Article VII
hereof, shall be in existence for 35 years from the Closing Date.

17

          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 body, except as described in Section
2.15(b) and (c) and except in connection with the liquidation of the Trust and
the distribution of the Debentures to Holders of Securities pursuant to Section
7.1(a)(iv) of the Declaration or Section 4 of Annex I.

          (b)     The
Trust may, with the consent of the Institutional Trustee and without the
consent of the Holders of the Capital Securities, consolidate, amalgamate, merge
with or into, or be replaced by a trust organized as such under the laws of any
state; provided that:

	
 

	
 

	
 

	
 

	
          (i)       if
  the Trust is not the surviving entity, 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 a trustee of the Successor Entity that possesses
  substantially the same powers and duties as the Institutional Trustee as the
  Holder of the Debentures;

	
 

	
 

	
 

	
 

	
          (iii)      such
  merger, consolidation, amalgamation or replacement does not adversely affect
  the rights, preferences and privileges of the Holders of the Securities
  (including any Successor Securities) in any material respect;

	
 

	
 

	
 

	
 

	
          (iv)      the
  Institutional Trustee receives written confirmation from Moody’s Investor
  Services, Inc. and any other nationally recognized statistical rating organization
  that rates securities issued by the initial purchaser of the Capital
  Securities that it will not reduce or withdraw the rating of any such
  securities because of such merger, conversion, consolidation, amalgamation or
  replacement;

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
          (vi)      prior
  to such merger, consolidation, amalgamation or replacement, the Trust has
  received an opinion of a nationally recognized independent counsel to the
  Trust experienced in such matters to the effect that:

	
 

	
 

	
 

	
 

	
 

	
          (A)
  such merger, consolidation, amalgamation or replacement does not adversely
  affect the rights, preferences and privileges of the Holders of the
  Securities (including any Successor Securities) in any material respect;

	
 

	
 

	
 

	
 

	
 

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

18

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
          (vii)     the
  Sponsor guarantees the obligations of such Successor Entity under the
  Successor Securities at least to the extent provided by the Guarantee;

	
 

	
 

	
 

	
          (viii)    the
  Sponsor owns 100% of the common securities of any Successor Entity; and

	
 

	
 

	
 

	
          (ix)      prior
  to such merger, consolidation, amalgamation or replacement, 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
  under this Section 2.15(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 aggregate liquidation amount of the Securities, consolidate, amalgamate,
merge with or into, or be replaced by any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes. 

ARTICLE III

SPONSOR

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

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

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

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

          Section
3.3. Expenses. In connection with the offering,
sale and issuance of the Debentures to the Trust and in connection with the
sale of the Securities by the Trust, the Sponsor, in its capacity as Debenture
Issuer, shall: 

          (a)     pay
all reasonable costs and expenses owing to the Debenture Trustee pursuant to Section
6.6 of the Indenture; 

19

          (b)     be
responsible for and shall pay all debts and obligations (other than with
respect to the Securities) and all costs and expenses of the Trust, the
offering, sale and issuance of the Securities (including fees to the placement
agents in connection therewith), the costs and expenses (including reasonable
counsel fees and expenses) of the Institutional Trustee and the Administrators,
the costs and expenses relating to the operation of the Trust, including, without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, Paying Agents, Registrars, Transfer Agents, duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets and the enforcement by the Institutional Trustee of
the rights of the Holders (for purposes of clarification, this Section 3.3(b)
does not contemplate the payment by the Sponsor of acceptance or annual
administration fees owing to the Trustees pursuant to the services to be
provided by the Trustees under this Declaration or the fees and expenses of the
Trustees’ counsel in connection with the closing of the transactions
contemplated by this Declaration); and 

          (c)     pay
any and all taxes (other than United States withholding taxes attributable to
the Trust or its assets) and all liabilities, costs and expenses with respect
to such taxes of the Trust. 

          The
Sponsor’s obligations under this Section 3.3 shall be for the benefit of, and
shall be enforceable by, any Person to whom such debts, obligations, costs,
expenses and taxes are owed (a “Creditor”) whether or not such Creditor has
received notice hereof. Any such Creditor may enforce the Sponsor’s obligations
under this Section 3.3 directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that any such Creditor take any action
against the Trust or any other Person before proceeding against the Sponsor.
The Sponsor agrees to execute such additional agreements as may be necessary or
desirable in order to give full effect to the provisions of this Section 3.3.  

          Section
3.4. Right to Proceed. The Sponsor acknowledges
the rights of Holders to institute a Direct Action as set forth in Section
2.8(d) hereto. 

ARTICLE IV

INSTITUTIONAL TRUSTEE AND
ADMINISTRATORS

          Section
4.1. Number of Trustees. The number of Trustees
shall initially 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; Eligibility. 

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

                    (i)     a
natural person at least 21 years of age who is a resident of the State of
Delaware; or 

20

	
 

	
 

	
 

	
          (ii)     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. 

          (b)     The
initial Delaware Trustee shall be Wilmington Trust Company. 

          Section
4.3. Institutional Trustee; Eligibility. 

          (a)     There
shall at all times be one 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 trust company organized and doing business under the
  laws of the United States of America or any state thereof or the District of
  Columbia, authorized under such laws to exercise corporate trust powers,
  having a combined capital and surplus of at least 50 million U.S. dollars
  ($50,000,000.00), and 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 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 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 Section 310(b) of the Trust Indenture Act of 1939, as
amended, 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, 21 years of age or older and authorized to bind the Sponsor.
The initial Administrators shall be J. Daniel Mohr, John H. Watt, Jr. and Jack
H. Webb. There shall at all times be at least one Administrator. Except where a
requirement for action by a specific number of Administrators is expressly set
forth in this Declaration and except with respect to any action the taking of
which is the subject of a meeting of the Administrators, any action required or
permitted to be taken by the Administrators may be taken by, and any power of
the Administrators may be exercised by, or with the consent of, any one such
Administrator. 

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

          (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 

21

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

          (c)     Unless
an Event of Default shall have occurred and be continuing, any Trustee may be
removed at any time by an act of the Holders of a Majority in liquidation amount
of the Common Securities. If any Trustee shall be so removed, the Holders of
the Common Securities, by act of the Holders of a Majority in liquidation
amount of the Common Securities delivered to the Relevant Trustee, shall
promptly appoint a successor Relevant Trustee, and such successor Trustee shall
comply with the applicable requirements of this Section 4.5. If an Event of
Default shall have occurred and be continuing, the Institutional Trustee or the
Delaware Trustee, or both of them, may be removed by the act of the Holders of
a Majority in liquidation amount of the Capital Securities, delivered to the
Relevant Trustee (in its individual capacity and on behalf of the Trust). If
any Trustee shall be so removed, the Holders of Capital Securities, by act of
the Holders of a Majority in liquidation amount of the Capital Securities then
outstanding delivered to the Relevant Trustee, shall promptly appoint a
successor Relevant Trustee or Trustees, and such successor Trustee shall comply
with the applicable requirements of this Section 4.5. If no successor Relevant
Trustee shall have been so appointed by the Holders of a Majority in
liquidation amount of the Capital Securities and accepted appointment in the
manner required by this Section 4.5 within 30 days after delivery of an
instrument of removal, the Relevant Trustee or any Holder who has been a Holder
of the Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any federal, state or District of Columbia
court of competent jurisdiction for the appointment of a successor Relevant
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a successor Relevant Trustee or Trustees. 

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

          (e)     Notwithstanding
the foregoing or any other provision of this Declaration, in the event a
Delaware Trustee who is a natural person dies or is adjudged by a court to have
become incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by the Institutional Trustee following
the procedures in this Section 4.5 (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 

22

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, a vacancy shall occur. A resolution certifying the
existence of such vacancy by the Trustees or, if there are more than two, a
majority of the Trustees, shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance
with Section 4.5. 

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

23

the Trustees and the Administrators together shall be held
from time to
time upon the call of any Trustee or an Administrator. 

          Section
4.9. Delegation of Power. 

          (a)     Any
Administrator 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 contemplated in
Section 2.6; and 

          (b)     the
Administrators shall have power to delegate from time to time to such of their
number the doing of such things and the execution of such instruments either in
the name of the Trust or the names of the Administrators or otherwise as the
Administrators may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein. 

          Section
4.10. Conversion, Consolidation or Succession to Business. Any
Person into which the Institutional Trustee or the Delaware Trustee may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the
Institutional Trustee or the Delaware Trustee 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 shall be the successor of the
Institutional Trustee or the Delaware Trustee hereunder, 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 or any principal on the Debentures held by the
Institutional Trustee, the Institutional Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
“Distribution”) of such amounts to Holders.  

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 substantially in the form of Exhibit A-1 representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I and one series of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I. 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 to, and payment thereon shall be made Pro Rata with, the
Common Securities except that, where an Event of Default has occurred and is
continuing, the rights of Holders of the Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights to payment of the Holders of the
Capital Securities as set forth in Annex I. 

24

          (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, and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of
such Security, 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 authenticated by the
facsimile or manual signature of an Authorized Officer of the Institutional
Trustee. Such signature shall be conclusive evidence that the Capital Security
has been authenticated under this Declaration. Upon written order of the Trust
signed by one Administrator, the Institutional Trustee shall authenticate the
Capital Securities for original issue. The Institutional Trustee may appoint an
authenticating agent that is a U.S. Person acceptable to the Trust to
authenticate the Capital Securities. A Common Security need not be so
authenticated. 

          (c)     The
Capital Securities issued to QIBs shall be, except as provided in Section 6.4,
Book-Entry Capital Securities issued in the form of one or more Global Capital
Securities registered in the name of the Depositary or its nominee and
deposited with the Depositary or a custodian for the Depositary for credit by
the Depositary to the respective accounts of the Depositary Participants
thereof (or such other accounts as they may direct). The Capital Securities
issued to a Person other than a QIB shall be issued in the form of a Definitive
Capital Securities Certificate. 

          (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, except as provided
in Section 9.1(b) with respect to the Common Securities, non-assessable. 

          (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 and Registrar. The
Trust shall maintain in Wilmington, Delaware, an office or agency where the
Capital Securities may be presented for payment (“Paying Agent”), and an office
or agency where Securities may be presented for registration of transfer or
exchange (the “Transfer Agent”). The Trust shall keep or cause to be kept at
such office or agency a register for the purpose of registering Securities,
transfers and exchanges of Securities, such 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 or 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. 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. The Institutional Trustee or any of its Affiliates in the
United States may act as Paying Agent, Transfer Agent or Registrar.  

          Section
6.3. Form and Dating. The Capital Securities
and the Institutional Trustee’s certificate of authentication thereon shall be
substantially in the form of Exhibit A-1, and the Common Securities

25

shall be 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. The 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 shall be dated on or before the date of its authentication. The terms
and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Institutional Trustee, the
Delaware Trustee, the Administrators and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby. Capital Securities will be issued only in blocks having a
stated liquidation amount of not less than $100,000.00 and any multiple of
$1,000.00 in excess thereof. 

          The Capital
Securities are being offered and sold by the Trust pursuant to the Placement
Agreement in definitive, registered form without coupons and with the
Restricted Securities Legend. 

          Section
6.4. Book-Entry Capital Securities. 

          (a)     A
Global Capital Security may be exchanged, in whole or in part, for Definitive
Capital Securities Certificates registered in the names of Owners only if such
exchange complies with Article VIII and (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, (iii) the Administrators at their
option advise the Institutional Trustee in writing that the Trust elects to
terminate the book-entry system through the Depositary, or (iv) an Indenture
Event of Default has occurred and is continuing. Upon the occurrence of any
event specified in clause (i), (ii), (iii) or (iv) above, the Administrators
shall notify the Depositary and instruct the Depositary to notify all Owners of
Book-Entry Capital Securities and the Institutional Trustee of the occurrence
of such event and of the availability of Definitive Capital Securities
Certificates to Owners of the Capital Securities requesting the same. Upon the
issuance of Definitive Capital Securities Certificates, the Administrators and
the Institutional Trustee shall recognize the Holders of the Definitive Capital
Securities Certificates as Holders. Notwithstanding the foregoing, if an Owner
of a beneficial interest in a Global Capital Security wishes at any time to
transfer an interest in such Global Capital Security to a Person other than a
QIB, such transfer shall be effected, subject to the Applicable Depositary
Procedures, in accordance with the provisions of this Section 6.4 and Article
VIII, and the transferee shall receive a Definitive Capital Securities
Certificate in connection with such transfer. A holder of a Definitive Capital
Securities Certificate that is a QIB may upon request, and in accordance with
the provisions of this Section 6.4 and Article VIII, exchange such Definitive
Capital Securities Certificate for a beneficial interest in a Global Capital
Security. 

          (b)     If
any Global Capital Security is to be exchanged 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 either (i) such Global Capital Security shall be so
surrendered for exchange or cancellation as provided in this Section 6.4 and
Article VIII or (ii) the aggregate liquidation amount represented by such
Global Capital Security shall be reduced, subject to Section 6.3, or increased
by an amount equal to the liquidation amount represented by that portion of the

26

Global Capital Security to be so exchanged 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 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, shall execute the
Definitive Capital Securities Certificates in accordance with the instructions
of the Depositary. None of the Registrar, Administrators, or the Institutional
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions. 

          (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)     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 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 (including the payment of
the liquidation amount of and Distributions on the Book-Entry Capital
Securities represented thereby and the giving of instructions or directions by
Owners of Book-Entry Capital Securities represented thereby and the giving of
notices) as the sole Holder of the Book-Entry Capital Securities represented
thereby and shall have no obligations to the 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. 

          (e)     The
rights of the 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 Owners and the
Depositary and/or the Depositary Participants; provided, however, 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 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, the 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. 

          (f)     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 Owners. 

          Section
6.5. Mutilated, Destroyed, Lost or Stolen Certificates. 

27

          If: 

          (a)     any
mutilated Certificates 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)     there
shall be delivered to the Registrar, the Administrators and the Institutional
Trustee such security or indemnity as may be required by them to keep each of
them harmless; 

then, in the absence of notice that such Certificate shall
have been
acquired by a protected 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, 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 6.5, the Registrar or the Administrators may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate
issued 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 Securities. Until definitive
Securities are ready for delivery, the Administrators may prepare and, in the
case of the Capital Securities, the Institutional Trustee shall authenticate,
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Administrators consider
appropriate for temporary Securities. Without unreasonable delay, the
Administrators shall prepare and, in the case of the Capital Securities, the
Institutional Trustee shall authenticate, definitive Securities in exchange for
temporary Securities. 

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

          Section
6.8. CUSIP Numbers. The Trust in issuing the
Securities may use “CUSIP” numbers (if then generally in use), and, if so, the
Institutional Trustee shall use CUSIP numbers in notice of redemption as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of redemption and that
identification numbers printed on the Securities and any such redemption shall
not be affected by any defect in or omission of such numbers. The Trust shall
promptly notify the Institutional Trustee in writing of any change in the CUSIP
numbers.  

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

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

          (b)     For
so long as any Capital Securities remain outstanding, if upon an Acceleration
Event of Default, the Debenture Trustee fails or the holders of not less than
25% in principal amount of the 

28

outstanding Debentures fail to declare the principal of all
of the
Debentures to be immediately due and payable, the Holders of 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. 

          At any time
after a declaration of acceleration with respect to 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 declaration 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 declaration and its consequences if: 

	
 

	
 

	
 

	
 

	
          (i)     the
  Debenture Issuer 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 Additional Interest on all of the Debentures, 

	
 

	
 

	
 

	
 

	
 

	
          (C)
  the principal of (and premium, if any, on) any Debentures that have become
  due otherwise than by such declaration of acceleration and interest and
  Additional 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, 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 the Debentures that has become due solely by such
  acceleration, have been cured or waived as provided in Section 5.7 of the
  Indenture.

          The Holders
of at least a Majority in liquidation amount of the Capital Securities may, on
behalf of the Holders of all the Capital Securities, waive any past default
under the Indenture or any Indenture Event of Default, except a default or
Indenture Event of Default in the payment of principal or interest on the
Debentures (unless such default or Indenture Event of Default has been cured
and a sum sufficient to pay all matured installments of interest and principal
due otherwise than by acceleration has been deposited with the Debenture
Trustee) or a default under the Indenture or an Indenture 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. 

          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  

29

expiration of such 90-day period, a new written notice of
declaration
of acceleration, or rescission and annulment thereof, as the case may be, that
is identical to a written notice that has been canceled pursuant to the proviso
to the preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 6.8. 

          (c)     Except
as otherwise provided in paragraphs (a) and (b) of this Section 6.8, the
Holders of at least 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 December 15, 2041, the expiration of the term of the
  Trust; 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (iii)   upon
  the filing of a certificate of dissolution or its equivalent with respect to
  the Sponsor (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) 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)    upon
  the distribution of the Debentures to the Holders of the Securities, upon
  exercise of the right of the Holder of all of the outstanding Common
  Securities to dissolve the Trust as provided in Annex I hereto; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (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 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. 

30

          (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 Section 8.1(c), where Capital Securities are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal number of Capital Securities represented by different certificates, the
Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met. To permit registrations of transfer and
exchanges, the Trust shall issue and the Institutional Trustee shall
authenticate Capital Securities 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, and to the fullest extent permitted by
applicable law, the Sponsor shall maintain 100% ownership of the Common
Securities; provided, however, that any permitted successor of the Sponsor, in
its capacity as Debenture Issuer, under the Indenture that is a U.S. Person may
succeed to the Sponsor’s ownership of the Common Securities.  

          (c)     Capital
Securities may only be transferred, in whole or in part, in accordance with the
terms and conditions set forth in this Declaration and in the terms of the
Securities. To the fullest extent permitted by applicable law, any transfer or
purported transfer of any Security not made in accordance with this Declaration
shall be null and void and will be deemed to be of no legal effect whatsoever
and any such 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 for the registration of Securities and of transfers of
Securities, which will be effected without charge but only upon payment (with
such indemnity as the Registrar may require) in respect of any tax or other
governmental charges that may be imposed in relation to it. Upon surrender for
registration of transfer of any Securities, the Registrar shall cause one or
more new Securities of the same tenor to be issued in the name of the
designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder’s attorney duly authorized in writing. Each Security surrendered
for registration of transfer 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 receipt by
such transferee of a Security. By acceptance of a Security, each transferee
shall be deemed to have agreed to be bound by this Declaration. 

          (e)     The
Trust shall not be required (i) to issue, register the transfer of, or exchange
any Securities during a period beginning at the opening of business fifteen
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. 

31

          Section
8.2. Transfer Procedures and Restrictions. 

          (a)     The
Capital Securities shall bear the Restricted Securities Legend, which shall not
be removed unless there is delivered to the Trust such satisfactory evidence,
which may include an opinion of counsel satisfactory to the Institutional
Trustee, as may be reasonably required by the Trust, that neither the legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of 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 that do not bear the legend. 

          (b)     Except
as permitted by Section 8.2(a), each Capital Security shall bear a legend (the
“Restricted Securities Legend”) in substantially the following form and a Capital
Security shall not be transferred except in compliance with such legend, unless
otherwise determined by the Sponsor, upon the advice of counsel expert in
securities law, in accordance with applicable law:  

	
 

	
 

	
 

	
          [If the Capital Security is to be
  Global Capital Security- THIS CAPITAL 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 CAPITAL 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 CAPITAL 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 CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
  ALLIANCE FINANCIAL CAPITAL TRUST II OR ITS AGENT FOR REGISTRATION OF
  TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED
  IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
  AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON 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”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
  SECURITIES LAW. 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 AND ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF
  THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
  TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR THE 

32

	
 

	
 

	
 

	
TRUST,
  (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
  UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
  IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
  OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
  144A IN ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE
  TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF
  REGULATIONS UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
  INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES
  ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
  ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES
  AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
  DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
  AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
  SUBJECT TO THE SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER, SALE
  OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
  AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
  DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE
  TRUST. HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS
  IN COMPLIANCE WITH THE SECURITIES ACT. 

	
 

	
 

	
 

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

33

	
 

	
 

	
 

	
4975 OF THE
  CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION. 

	
 

	
 

	
 

	
          THIS
  SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
  LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100 SECURITIES) AND
  MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF
  SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00
  SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. 

	
 

	
 

	
 

	
          THE
  HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
  RESTRICTIONS. 

          (c)     To
permit registrations of transfers and exchanges, the Trust shall execute and
the Institutional Trustee shall authenticate Capital Securities at the
Registrar’s request. 

          (d)     Registrations
of transfers or exchanges will be effected without charge, but only upon
payment (with such indemnity as the Registrar or the Sponsor may require) in
respect of any tax or other governmental charge that may be imposed in relation
to it. 

          (e)     All
Capital Securities issued upon any registration of transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the Capital
Securities surrendered upon such registration of transfer or exchange. 

          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 Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate 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 Certificate or in the Securities represented by such
Certificate on the part of any 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. 

ARTICLE IX

LIMITATION OF LIABILITY OF

HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE 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; or 

	
 

	
 

	
 

	
          (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. 

34

          (c)     Pursuant
to the Statutory Trust Act, the Holders of the Capital 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. 

          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 shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person’s negligence or willful
misconduct with respect to such acts or omissions. 

          (b)     An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the 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 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,
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)     The
Sponsor shall indemnify, to the full 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) arising out of or in connection with the acceptance or
administration of this Declaration by reason of the fact that he is or was an
Indemnified Person against expenses (including reasonable attorneys’ fees and
expenses), judgments, fines and amounts paid in settlement actually and 

35

reasonably incurred by him in connection with such action,
suit or
proceeding if he acted in good faith and in a manner he 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 his
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 he 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 his conduct was unlawful. 

          (b)     The
Sponsor shall indemnify, to the full 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 arising out of or in connection with the
acceptance or administration of this Declaration by reason of the fact that he
is or was an Indemnified Person against expenses (including reasonable
attorneys’ fees and expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust; provided, however, 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 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 shall deem
proper.  

          (c)     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 (a) and (b) of this Section 9.4, or in
defense of any claim, issue or matter therein, he shall be indemnified, to the
full extent permitted by law, against expenses (including attorneys’ fees and
expenses) actually and reasonably incurred by him in connection therewith. 

          (d)     Any
indemnification of an Administrator under paragraphs (a) and (b) of this
Section 9.4 (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 he has met the
applicable standard of conduct set forth in paragraphs (a) and (b). Such
determination shall be made (i) by the Administrators by a majority vote of a
Quorum consisting of such Administrators who were not parties to such action,
suit or proceeding, (ii) 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 (iii) by the Common Security
Holder of the Trust. 

          (e)     To
the fullest extent permitted by law, expenses (including reasonable 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 (a) and (b) of this Section 9.4 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 he is not entitled to be
indemnified by the Sponsor as authorized in this Section 9.4. Notwithstanding
the foregoing, no advance shall be made by the Sponsor if a determination is
reasonably and promptly made (i) by the Administrators by a majority vote of a
Quorum of disinterested Administrators, (ii) 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 (iii) 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 Indemnified Person did not believe to be in the best interests
of the Trust, 

36

or, with respect to any criminal proceeding, that such
Indemnified
Person believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Administrators,
independent legal counsel or the Common Security Holder reasonably determine
that such Indemnified Person deliberately breached his duty to the Trust or its
Common or Capital Security Holders. 

          (f)     The
Trustees, at the sole cost and expense of the Sponsor, retain the right to
representation by counsel of their own choosing in any action, suit or any
other proceeding for which they are indemnified under paragraphs (a) and (b) of
this Section 9.4, without affecting their right to indemnification hereunder or
waiving any rights afforded to it under this Declaration or applicable law. 

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

          (h)     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 him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Sponsor would have the power to indemnify
him against such liability under the provisions of this Section 9.4. 

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

          (j)     The
indemnification and advancement of expenses provided by, or granted pursuant
to, this Section 9.4 shall, unless otherwise provided when authorized or ratified,
(i) 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; and (ii) survive the termination or expiration of this Declaration or
the earlier removal or resignation of an Indemnified Person. 

          Section
9.5. Outside Businesses. Any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee 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

37

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. The Sponsor agrees: 

          (a)     to
pay to the Trustees from time to time such compensation for all services
rendered by them hereunder as the parties shall agree 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 Trustees upon request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustees in accordance with any provision of this Declaration (including the
reasonable compensation and the expenses and disbursements of their respective
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, bad faith or willful misconduct. 

          For
purposes of clarification, this Section 9.6 does not contemplate the payment by
the Sponsor of acceptance or annual administration fees owing to the Trustees
under this Declaration or the fees and expenses of the Trustees’ counsel in
connection with the closing of the transactions contemplated by this
Declaration. 

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

          No Trustee
may claim any lien or charge on any property of the Trust as a result of any
amount due pursuant to this Section 9.6. 

ARTICLE X

ACCOUNTING

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

          Section
10.2. Certain Accounting Matters. 

          (a)     At
all times during the existence of the Trust, the Administrators shall keep, or
cause to be kept at the principal office of the Trust in the United States, as
defined for purposes of Treasury Regulations section 301.7701-7, full books of
account, records and supporting documents, which shall reflect in reasonable
detail each transaction of the Trust. The books of account shall be maintained,
at the Sponsor’s expense, in accordance with generally accepted accounting
principles, consistently applied. The books of account and the records of the
Trust shall be examined by and reported upon (either separately or as part of
the Sponsor’s regularly prepared consolidated financial report) as of the end
of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrators. 

          (b)     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. 

38

          (c)     The
Administrators, at the Sponsor’s expense, shall cause to be duly prepared at
the principal office of the Sponsor in the United States, as ‘United States’ is
defined in Section 7701(a)(9) of the Code (or at the principal office of the
Trust if the Sponsor has no such principal office in the United States), 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. 

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

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

          (b)     Notwithstanding
any other provision of this Article XI, an amendment may be made, and any such
purported amendment shall be valid and effective only if: 

	
 

	
 

	
 

	
          (i)     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 

39

	
 

	
 

	
 

	
 

	
 

	
          (B) an
  opinion of counsel (who may be counsel to the Sponsor or the Trust) that such
  amendment is permitted by, and conforms to, the terms of this Declaration
  (including the terms of the Securities); and 

	
 

	
 

	
 

	
 

	
          (ii)     the
  result of such amendment would not be to

	
 

	
 

	
 

	
 

	
 

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

	
 

	
 

	
 

	
 

	
 

	
          (B) cause
  the Trust to be deemed to be an Investment Company required to be registered
  under the Investment Company Act. 

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

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

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

          (f)     Article
III shall not be amended without the consent of the Holders of a Majority in
liquidation amount of the Common Securities. 

          (g)     The
rights of the Holders of the Capital Securities under Article IV to appoint and
remove Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Capital Securities. 

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

	
 

	
 

	
 

	
          (i)     cure
  any ambiguity; 

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (iv)    modify,
  eliminate or add to any provision of this Declaration to such extent as may
  be necessary 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 (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) which amendment does not have a material adverse effect
  on the rights, preferences or privileges of the Holders of Securities; 

40

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

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

          (a)     Meetings
of the Holders of any class of Securities may be called at any time by the
Administrators (or as provided in the terms of the Securities) to consider and
act on any matter on which Holders of such class of Securities are entitled to
act under the terms of this Declaration or the terms of the Securities. The
Administrators shall call a meeting of the Holders of such class if directed to
do so by the Holders of at least 10% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Administrators
one or more calls in a writing stating that the signing Holders of the
Securities wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders of the Securities
calling a meeting shall specify in writing the Certificates held by the Holders
of the Securities exercising the right to call a meeting and only those
Securities represented by such Certificates shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met. 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

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

	
 

	
 

	
 

	
          (iii)   unless
  the Statutory Trust Act, this Declaration, or the terms of the Securities
  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 

41

	
 

	
 

	
 

	
such notice,
action by consent without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote; provided, however, that
each meeting shall be conducted in the United States (as that term is defined
in Treasury Regulations section 301.7701-7).  

ARTICLE XII

REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
THE DELAWARE TRUSTEE

          Section
12.1. Representations and Warranties of Institutional Trustee. The
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 Delaware banking corporation with trust powers, duly
organized and validly existing under the laws of the State of Delaware with trust
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration; 

          (b)     the
execution, delivery and performance by the Institutional Trustee of this
Declaration has been duly authorized by all necessary corporate action on the part
of the Institutional Trustee. This Declaration has been duly executed and
delivered by the Institutional Trustee, and it 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 (regardless of whether considered
in a proceeding in equity or at law); 

          (c)     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 

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

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

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

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

42

          (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; 

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

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

ARTICLE XIII

MISCELLANEOUS

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

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

	
 

	
 

	
 

	
Alliance
  Financial Capital Trust II

  c/o Alliance Financial Corporation

  120 Madison Street
 MONY Tower II, 18th Floor

  Syracuse, New York 13202

  Attention: J. Daniel Mohr

  Telecopy: 315-475-3558 

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

	
 

	
 

	
 

	
Wilmington
  Trust Company

  Rodney Square North

  1100 North Market Street

  Wilmington, Delaware 19890-1600

  Attention: Corporate Trust Administration

  Telecopy: 302-636-4140 

          (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 

43

	
 

	
 

	
 

	
Wilmington,
  Delaware 19890-1600

  Attention: Corporate Trust Administration

  Telecopy: 302-636-4140 

          (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): 

	
 

	
 

	
 

	
Alliance
Financial Corporation
 120 Madison Street
 MONY Tower II, 18th Floor
 Syracuse,
New York 13202
 Attention: J. Daniel Mohr
 Telecopy: 315-475-3558 

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

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

          Section
13.2. Governing Law. This Declaration and the
rights of the parties hereunder shall be governed by and interpreted in
accordance with the law of the State of Delaware and all rights 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;
provided, however, that there shall not be applicable to the Trust, the
Trustees or this Declaration any provision of the laws (statutory or common) of
the State of Delaware pertaining to trusts that relate to or regulate, in a
manner inconsistent with the terms hereof (a) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees
and charges, (b) affirmative requirements to post bonds for trustees, officers,
agents or employees of a trust, (c) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of
real or personal property, (d) fees or other sums payable to trustees, officers,
agents or employees of a trust, (e) the allocation of receipts and expenditures
to income or principal, or (f) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating
to the titling, storage or other manner of holding or investing trust assets.  

          Section
13.3. 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
13.4. 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
13.5. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether or not
so expressed. 

          Section
13.6. 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 

44

the application of such provision to persons or
circumstances other
than those to which it is held invalid, shall not be affected thereby. 

          Section
13.7. 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. 

Signatures appear on the following
page

45

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

	
 

	
 

	
 

	
 

	
 

	
 

	
WILMINGTON
  TRUST COMPANY,
 as Delaware Trustee 

	
 

	
 

	
 

	
 

	
 

	
By:  

	
/s/ Michele
  C. Harra

	
 

	
 

	

	
 

	
 

	
Name: Michele
  C. Harra

	
 

	
 

	
 

	
Title:
  Financial Services Officer

	
 

	
 

	
 

	
 

	
 

	
 

	
WILMINGTON
  TRUST COMPANY,
 as Institutional Trustee 

	
 

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Michele
  C. Harra

	
 

	
 

	

	
 

	
 

	
Name:
  Michele C. Harra

	
 

	
 

	
 

	
Title:
  Financial Services Officer

	
 

	
 

	
 

	
 

	
ALLIANCE
  FINANCIAL CORPORATION,
 as Sponsor 

	
 

	
 

	
 

	
 

	
 

	
By:  

	
/s/ J.
  Daniel Mohr

	
 

	
 

	

	
 

	
 

	
Name: J.
  Daniel Mohr

	
 

	
 

	
 

	
Title:
  Treasurer & CFO

	
 

	
 

	
 

	
 

	
 

	
 

	
ADMINISTRATORS
  OF ALLIANCE FINANCIAL CAPITAL TRUST II 

	
 

	
 

	
 

	
 

	
 

	
By:  

	
/s/ J.
  Daniel Mohr

	
 

	
 

	

	
 

	
 

	
Administrator

	
 

	
 

	
 

	
 

	
 

	
By: 

	
/s/ Jack H.
  Webb

	
 

	
 

	

	
 

	
 

	
Administrator

	
 

	
 

	
 

	
 

	
 

	
By: 

	
/s/ John H.
  Watt, Jr.

	
 

	
 

	

	
 

	
 

	
Administrator

	
 

46

ANNEX I

TERMS OF SECURITIES

                     Pursuant to
Section 6.1 of the Amended and Restated Declaration of Trust, dated as of
September 21, 2006 (as amended from time to time, the “Declaration”), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration): 

          1.        Designation
and Number. 

                    (a)     15,000
Floating Rate Capital Securities of Alliance Financial Capital Trust II (the
“Trust”), with an aggregate stated liquidation amount with respect to the
assets of the Trust of fifteen million dollars ($15,000,000.00) and a stated
liquidation amount with respect to the assets of the Trust of $1,000.00 per
Capital Security, are hereby designated for the purposes of identification only
as 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.  

                    (b)     464
Floating Rate 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.  

          2.        Distributions.

                    (a)     Distributions
will be payable on each Security for the Distribution Period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Distribution Payment Date in December 2006 at a rate per annum of 7.04% and
shall bear interest for each successive Distribution Period beginning on (and
including) the Distribution Payment Date in December 2006, and each succeeding
Distribution Payment Date, and ending on (but excluding) the next succeeding
Distribution Payment Date at a rate per annum equal to the 3-Month LIBOR,
determined as described below, plus 1.65% (the “Coupon Rate”), applied to the
stated liquidation amount thereof, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee. Distributions in
arrears will bear interest thereon compounded quarterly at the applicable
Distribution Rate (to the extent permitted by law). Distributions, as used
herein, include cash distributions and any such compounded distributions unless
otherwise noted. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount of
the Distribution payable for any Distribution Period will be calculated by
applying the Distribution Rate to the stated liquidation amount outstanding at
the commencement of the Distribution Period on the basis of the actual number
of days in the Distribution Period concerned divided by 360. All percentages
resulting from any calculations on the Capital 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)).  

                    (b)     Distributions
on the Securities will be cumulative, will accrue from the date of original
issuance, and will be payable, subject to extension of distribution payment
periods as described herein, quarterly in arrears on March 15, June 15,
September 15 and December 15 of each year, or if such day is not a Business
Day, then the next succeeding Business Day (each a “Distribution Payment Date”) 

I-1

(it being understood that interest accrues for any such
non-Business
Day), commencing on the Distribution Payment Date in December 2006 when, as and
if available for payment. The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures, so long as no
Acceleration Event of Default has occurred and is continuing, by deferring the
payment of interest on the Debentures for up to 20 consecutive quarterly
periods (each an “Extension Period”) at any time and from time to time, subject
to the conditions described below, during which Extension Period no interest
shall be due and payable. During any Extension Period, interest will continue
to accrue on the Debentures, and interest on such accrued interest will accrue
at an annual rate equal to the Distribution Rate in effect for each such
Extension Period, compounded quarterly from the date such interest would have
been payable were it not for the Extension Period, to the extent permitted by
law (such interest referred to herein as “Additional Interest”). No Extension
Period may end on a date other than a Distribution Payment Date. At the end of
any such Extension Period, the Debenture Issuer shall pay all interest then
accrued and unpaid on the Debentures (together with Additional Interest
thereon); provided, however, that no Extension Period may extend beyond the
Maturity Date and provided further, however, that during any such Extension
Period, the Debenture Issuer and its Affiliates shall 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 or its
Affiliates’ capital stock (other than payments of dividends or distributions to
the Debenture Issuer) or make any guarantee payments with respect to the
foregoing, or (ii) make any payment of principal of or interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Debenture
Issuer or any Affiliate that rank pari passu
in all respects with or junior in interest to the Debentures (other than, with
respect to clauses (i) and (ii) above, (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Debenture Issuer 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,
in connection with a dividend reinvestment or stockholder stock purchase plan
or 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 stockholders’ rights plan, or
the issuance of rights, stock or other property under any stockholders’ rights
plan, or the redemption or repurchase of rights pursuant thereto, (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 and any cash payments in lieu of fractional shares issued in
connection therewith, or (f) payments under the Capital Securities Guarantee).
Prior to the termination of any Extension Period, the Debenture Issuer may
further extend such period, provided that such period together with all such
previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and Additional Interest, the Debenture Issuer may commence a
new Extension Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional
Interest. During any Extension Period, Distributions on the Securities shall be
deferred for a period equal to the Extension Period. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates to Holders of the Securities as they appear on the
books and records of the Trust on the record date immediately preceding such
date. Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has  

I-2

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

                    (c)          Distributions
on the Securities will be payable to the Holders thereof as they appear on the
books and records of the Trust on the relevant record dates. The relevant
record dates shall be fifteen days before the relevant Distribution Payment
Date. Distributions payable on any Securities that are not punctually paid on
any Distribution Payment Date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, as the case may be, when due
(taking into account any Extension Period), will cease to be payable to the
Person in whose name such Securities are registered on the relevant record
date, and such defaulted Distribution will instead be payable to the Person in
whose name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture.

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

          3.       Liquidation
Distribution Upon Dissolution. In the event of the voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Trust (each a “Liquidation”)
other than in connection with a redemption of the Debentures, the Holders of
the Securities will be entitled to receive out of the assets of the Trust
available for distribution to Holders of the Securities, after satisfaction of
liabilities to creditors of the Trust (to the extent not satisfied by the
Debenture Issuer), distributions equal to the aggregate of the stated
liquidation amount of $1,000.00 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the “Liquidation
Distribution”), unless in connection with such Liquidation, the Debentures
in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of such Securities, with an interest rate equal to the
Distribution Rate of, and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid Distributions on, and having the same record date
as, such Securities, after paying or making reasonable provision to pay all
claims and obligations of the Trust in accordance with the Statutory Trust Act,
shall be distributed on a Pro Rata basis to the Holders of the Securities in
exchange for such Securities.

          The
Sponsor, as the Holder of all of the Common Securities, has the right at any
time to dissolve the Trust (including, without limitation, upon the occurrence
of a Special Event), subject to the receipt by the Debenture Issuer of prior approval
from the Board of Governors of the Federal Reserve System, or its designated
district bank, as applicable, and any successor federal agency that is
primarily responsible for regulating the activities of the Sponsor (the “Federal
Reserve”), if the Sponsor is a bank holding company, or from the Office of
Thrift Supervision and any successor federal agency that is primarily
responsible for regulating the activities of Sponsor, (the “OTS”) if the
Sponsor is a savings and loan holding company, in either case if then required
under applicable capital guidelines or policies of the Federal Reserve or OTS,
as applicable, and, after satisfaction of liabilities to creditors of the
Trust, cause the Debentures to be distributed to the Holders of the Securities on
a Pro Rata basis in accordance with the aggregate stated liquidation amount
thereof.

          If
a Liquidation of the Trust occurs as described in clause (i), (ii), (iii)
or (v) in Section 7.1(a) of the Declaration, the Trust shall be liquidated by
the Institutional Trustee as expeditiously as it determines to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust, to
the Holders of the Securities, the Debentures on a Pro Rata basis to the extent
not satisfied by the Debenture Issuer, unless such distribution is determined
by the Institutional Trustee not to be practical, in which event such Holders
will be entitled to receive out of the assets of the Trust available for
distribution to the Holders,

I-3

after
satisfaction of liabilities of creditors of the Trust to the extent not
satisfied by the Debenture Issuer, an amount equal to the Liquidation
Distribution. An early Liquidation of the Trust pursuant to clause (iv) of
Section 7.1(a) of the Declaration shall occur if the Institutional Trustee
determines that such Liquidation is possible by distributing, after
satisfaction of liabilities to creditors of the Trust, to the Holders of the
Securities on a Pro Rata basis, the Debentures, and such distribution occurs.

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

          After
the date for any distribution of the Debentures upon dissolution of the Trust
(i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) upon surrender of a Holder’s Securities certificate,
such Holder of the Securities will receive a certificate representing the
Debentures to be delivered upon such distribution, (iii) any certificates
representing the Securities still outstanding will be deemed to represent
undivided beneficial interests in such of the Debentures as have an aggregate
principal amount equal to the aggregate stated liquidation amount with an
interest rate identical to the Distribution Rate of, and bearing accrued and
unpaid interest equal to accrued and unpaid distributions on, the Securities
until such certificates are presented to the Debenture Issuer or its agent for
transfer or reissuance (and until such certificates are so surrendered, no
payments of interest or principal shall be made to Holders of Securities in
respect of any payments due and payable under the Debentures; provided, however
that such failure to pay shall not be deemed to be an Event of Default and
shall not entitle the Holder to the benefits of the Guarantee), and
(iv) all rights of Holders of Securities under the Declaration 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 December 15, 2036. The Debentures may be
redeemed by the Debenture Issuer, in whole or in part, at any Distribution
Payment Date on or after the Distribution Payment Date in September 2011, at
the Redemption Price. In addition, the Debentures may be redeemed by the
Debenture Issuer at the Special Redemption Price, in whole but not in part, at
any Distribution Payment Date, upon the occurrence and continuation of a
Special Event within 120 days following the occurrence of such Special
Event at the Special Redemption Price, upon not less than 30 nor more than
60 days’ notice to holders of such Debentures so long as such Special
Event is continuing. In each case, the right of the Debenture Issuer to redeem
the Debentures is subject to the Debenture Issuer having received prior
approval from the Federal Reserve (if the Debenture Issuer is a bank holding
company) or prior approval from the OTS (if the Debenture Issuer is a savings
and loan holding company), in each case if then required under applicable
capital guidelines or policies of the applicable federal agency.

         
“3-Month LIBOR” means the London interbank offered interest rate for
three-month, U.S. dollar deposits determined by the Debenture Trustee in the
following order of priority:

	
 

	
 

	
 

	
 

	
           (1)          the
  rate (expressed as a percentage per annum) for U.S. dollar deposits having a
  three-month maturity that appears on Telerate Page 3750 as of
  11:00 a.m. (London time) on the related Determination Date (as defined
  below). “Telerate Page 3750” means the display designated as
  “Page 3750” on the Moneyline Telerate Service or such other page as may
  replace Page 3750 on that service or such other service or services as
  may be nominated by the British Bankers’ Association as the information
  vendor for the purpose of displaying London interbank offered rates for U.S.
  dollar deposits;

I-4

	
 

	
 

	
 

	
          (2)          if
  such rate cannot be identified on the related Determination Date, the
  Debenture Trustee will request the principal London offices of four leading
  banks in the London interbank market to provide such banks’ offered
  quotations (expressed as percentages per annum) to prime banks in the London
  interbank market for U.S. dollar deposits having a three-month maturity as of
  11:00 a.m. (London time) on such Determination Date. If at least two
  quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
  quotations;

	
 

	
 

	
 

	
          (3)          if
  fewer than two such quotations are provided as requested in clause (2)
  above, the Debenture Trustee will request four major New York City banks to
  provide such banks’ offered quotations (expressed as percentages per annum)
  to leading European banks for loans in U.S. dollars as of 11:00 a.m.
  (London time) on such Determination Date. If at least two such quotations are
  provided, 3-Month LIBOR will be the arithmetic mean of such quotations; and

	
 

	
 

	
 

	
          (4)          if
  fewer than two such quotations are provided as requested in clause (3)
  above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to the
  Distribution Period immediately preceding such current Distribution Period. 

          If
the rate for U.S. dollar deposits having a three-month maturity that initially
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
related Determination Date is superseded on the Telerate Page 3750 by a
corrected rate by 12:00 noon (London time) on such Determination Date,
then the corrected rate as so substituted on the applicable page will be the
applicable 3-Month LIBOR for such Determination Date.

          The
Distribution Rate for any Distribution Period will at no time be higher than
the maximum rate then permitted by New York law as the same may be modified by
United States law.

          “Capital
Treatment Event” means the receipt by the Debenture Issuer and the Trust of
an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of any amendment to, or change (including any
announced prospective 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 Sponsor will not, within 90 days of the date of
such opinion, be entitled to treat an amount equal to the aggregate liquidation
amount of the Capital Securities as “Tier 1 Capital” (or its then
equivalent) for purposes of the capital adequacy guidelines of the Federal
Reserve, as then in effect and applicable to the Sponsor (or if the Sponsor is
not a bank holding company or otherwise is not subject to the Federal Reserve’s
risk-based capital adequacy guidelines, such guidelines applied to the Sponsor
as if the Sponsor were subject to such guidelines); provided, however,
that the inability of the Sponsor to treat all or any portion of the
liquidation amount of the Capital Securities as Tier l Capital shall not
constitute the basis for a Capital Treatment Event, if such inability results
from the Sponsor having cumulative preferred stock, minority interests in consolidated
subsidiaries, or any other class of security or interest which the Federal
Reserve or OTS, as applicable, may now or hereafter accord Tier 1 Capital
treatment in excess of the amount which may now or hereafter qualify for
treatment as Tier 1 Capital under applicable capital adequacy guidelines; provided
further, however, that the distribution of Debentures in
connection with the Liquidation of the Trust 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.

          “Determination
Date” means the date that is two London Banking Days (i.e., a business day
in which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the particular Distribution Period for which a
Coupon Rate is being determined.

I-5

          “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 the occurrence of a change in law or regulation or written change
(including any announced prospective 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 or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Debentures.

          “Maturity
Date” means December 15, 2036.

          “Redemption
Date” shall mean the date fixed for the redemption of Capital Securities,
which shall be any Distribution Payment Date on or after the Distribution
Payment Date in September 2011.

          “Redemption
Price” means 100% of the principal amount of the Debentures being redeemed,
plus accrued and unpaid Interest on such Debentures to the Redemption Date.

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

          “Special
Redemption Date” means a date on which a Special Event redemption occurs,
which shall be a Distribution Payment Date.

          “Special
Redemption Price” means the price set forth in the following table for any
Special Redemption Date that occurs on the date indicated below (or if such day
is not a Business Day, then the next succeeding Business Day), expressed as the
percentage of the principal amount of the Debentures being redeemed:

	
 

	
 

	
 

	
Month in which Special

Redemption Date Occurs 

	
 

	
Special Redemption Price 

	

	
 

	

	
 

	
 

	
 

	
December 2006

	
 

	
104.625%

	
 

	
 

	
 

	
March 2007

	
 

	
104.300%

	
 

	
 

	
 

	
June 2007

	
 

	
104.000%

	
 

	
 

	
 

	
September 2007

	
 

	
103.650%

	
 

	
 

	
 

	
December 2007

	
 

	
103.350%

	
 

	
 

	
 

	
March 2008

	
 

	
103.000%

	
 

	
 

	
 

	
June 2008

	
 

	
102.700%

	
 

	
 

	
 

	
September 2008

	
 

	
102.350%

	
 

	
 

	
 

	
December 2008

	
 

	
102.050%

	
 

	
 

	
 

	
March 2009

	
 

	
101.700%

	
 

	
 

	
 

	
June 2009

	
 

	
101.400%

I-6

	
 

	
 

	
 

	
September 2009

	
 

	
101.050%

	
 

	
 

	
 

	
December 2009

	
 

	
100.750%

	
 

	
 

	
 

	
March 2010

	
 

	
100.450%

	
 

	
 

	
 

	
June 2010

	
 

	
100.200%

	
 

	
 

	
 

	
September 2010 and thereafter

	
 

	
100.000%

          plus,
in each case, accrued and unpaid Interest on such Debentures to the Special
Redemption Date.

          “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, field service advice, regulatory procedure, notice
or announcement including any notice or announcement of intent to adopt such
procedures or regulations) (an “Administrative Action”) or judicial
decision interpreting or applying such laws or regulations, regardless of
whether such Administrative Action or judicial decision is issued to or in
connection with a proceeding involving the Debenture Issuer or the Trust and
whether or not subject to review or appeal, which amendment, clarification,
change, Administrative Action or decision is enacted, promulgated or announced,
in each case on or after the date of original issuance of the Debentures, there
is more than an insubstantial risk that: (i) the Trust is, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the Debentures;
(ii) interest payable by the Debenture Issuer on the Debentures is not, or
within 90 days of the date of such opinion, will not be, deductible by the
Debenture Issuer, in whole or in part, for United States federal income tax
purposes; or (iii) the Trust is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.

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

                    (c)          If
fewer than all the outstanding Securities are to be so redeemed, the Common
Securities and the Capital Securities will be redeemed Pro Rata and the Capital
Securities to be redeemed will be redeemed Pro Rata from each Holder of Capital
Securities.

                    (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 quarterly Distribution periods terminating on or before the date of
redemption.

I-7

                    (e)          Redemption
or Distribution Procedures.

	
 

	
 

	
 

	
                        (i)          Notice
  of any redemption of, or notice of distribution of the Debentures in exchange
  for, the Securities (a “Redemption/Distribution Notice”) will be given
  by the Trust by mail to each Holder of Securities to be redeemed or exchanged
  not fewer than 30 nor more than 60 days before the date fixed for redemption
  or exchange thereof which, in the case of a redemption, will be the date
  fixed for redemption of the Debentures. For purposes of the calculation of
  the date of redemption or exchange and the dates on which notices are given
  pursuant to this paragraph 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 Trust. 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)          If
  the Securities are to be redeemed and the Trust gives a Redemption/
  Distribution Notice, which notice may only be issued if the Debentures are
  redeemed as set out in this paragraph 4 (which notice will be
  irrevocable), then, provided that the Institutional Trustee has a
  sufficient amount of cash in connection with the related redemption or
  maturity of the Debentures, the Institutional Trustee will pay the relevant
  Redemption Price or Special Redemption Price, as applicable, to the Holders
  of such Securities by check mailed to the address of each such Holder
  appearing on the books and records of the Trust on the Redemption Date. If a
  Redemption/Distribution Notice shall have been given and funds deposited as
  required then immediately prior to the close of business on the date of such
  deposit Distributions will cease to accrue on the Securities so called for
  redemption and all rights of Holders of such Securities so called for
  redemption will cease, except the right of the Holders of such Securities to
  receive the applicable Redemption Price or Special Redemption Price specified
  in paragraph 4(a), but without interest on such Redemption Price or
  Special Redemption Price. If payment of the Redemption Price or Special
  Redemption Price in respect of any Securities is improperly withheld or refused
  and not paid either by the Trust or by the Debenture Issuer as guarantor
  pursuant to the Guarantee, Distributions on such Securities will continue to
  accrue at the Distribution Rate from the original Redemption Date to the
  actual date of payment, in which case the actual payment date will be
  considered the date fixed for redemption for purposes of calculating the
  Redemption Price or Special Redemption Price. In the event of any redemption
  of the Capital Securities issued by the Trust in part, the Trust shall not be
  required to (i) issue, register the transfer of or exchange any Security
  during a period beginning at the opening of business fifteen days before any
  selection for redemption of the Capital Securities and ending at the close of
  business on the earliest date on which the relevant notice of redemption is
  deemed to have been given to all Holders of the Capital Securities to be so
  redeemed or (ii) register the transfer of or exchange any Capital
  Securities so selected for redemption, in whole or in part, except for the
  unredeemed portion of any Capital Securities being redeemed in part.

	
 

	
 

	
 

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

	
 

	
 

	
 

	
                        (iv)          Subject
  to the foregoing and applicable law (including, without limitation, United
  States federal securities laws), and provided that the acquiror is not the
  Holder of the Common Securities or the obligor under the Indenture, the
  Sponsor or any of its 

I-8

	
 

	
 

	
 

	
subsidiaries
  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 paragraphs 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 at least 10% in
liquidation amount of the Capital Securities.

                        (b)          Subject
to the requirements of obtaining a tax opinion by the Institutional Trustee in
certain circumstances set forth in the last sentence of this paragraph, the
Holders of a Majority in liquidation amount of the Capital Securities, voting
separately as a class, have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture as the holder of the Debentures, (ii) waive
any past default that is waivable under the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable or (iv) consent on behalf of all the
Holders of the Capital Securities to any amendment, modification or termination
of the Indenture or the Debentures where such consent shall be required; provided,
however, that, where a consent or action under the Indenture would
require the consent or act of the holders of greater than a simple majority in
aggregate 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 at least 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 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 principal on the Debentures on the date the interest
or principal is payable (or in the case of redemption, the Redemption Date or
the Special Redemption Date, as applicable), then a Holder of record of the
Capital Securities may directly institute a proceeding for enforcement of
payment, on or after the respective due dates specified in the Debentures, to
such Holder directly of the principal of or 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
clauses (i), (ii) or (iii) 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.

          In
the event the consent of the Institutional Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture, the Institutional Trustee shall
request the direction of the Holders of the Securities with respect to such
 

I-9

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

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

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

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

          6.          Voting
Rights - Common Securities.

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

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

                        (c)          Subject
to Section 6.8 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 Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time, method, and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waiving any past
default and its consequences that is waivable under the Indenture, or
(iii) exercising 

I-10

any right to
rescind or annul a declaration that the principal of all the Debentures shall
be due and payable; provided, however, that, where a consent or
action under the Indenture would require a Super Majority, the Institutional
Trustee may only give such consent or take such action at the written direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Notwithstanding this
paragraph 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 (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, to the
fullest extent permitted by law, under the Declaration, any Holder of the
Common Securities may institute a legal proceeding directly against any Person
to enforce the Institutional Trustee’s rights under the Declaration, without
first instituting a legal proceeding against the Institutional Trustee or any
other Person.

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

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

          7.          Amendments
to Declaration and Indenture.

                       (a)          In
addition to any requirements under Section 11.1 of the Declaration, if any
proposed amendment to the Declaration provides for, or the Trustees, Sponsor or
Administrators 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 at least a Majority in liquidation amount of the Securities, affected
thereby; provided, however, if any amendment or proposal referred
to in clause (i) above would adversely affect only the Capital Securities
or only the Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of a Majority in liquidation amount of such
class of Securities.

                       (b)          In
the event the consent of the Institutional Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification, or termination as
directed by a Majority in liquidation amount of the

I-11

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 direction of the Holders of at least
the proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.

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

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

          8.          Pro
Rata. A reference in these terms of the Securities to any payment,
distribution or treatment as being “Pro Rata” shall mean pro rata to
each Holder of the Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities then outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Capital Securities Pro Rata according to the aggregate liquidation amount of
the Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of the Common Securities Pro Rata according to the aggregate
liquidation amount of the Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.

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

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

          11.          No
Preemptive Rights. The Holders of the Securities shall have no preemptive
or similar rights to subscribe for any additional securities.

I-12

          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.

I-13

EXHIBIT A-1

FORM OF CAPITAL SECURITY CERTIFICATE

[FORM OF FACE OF SECURITY]

          THIS
CAPITAL 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 CAPITAL 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 CAPITAL
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 CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
ALLIANCE FINANCIAL CAPITAL TRUST II OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON 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”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW. 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 AND ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
ONLY (A) TO THE SPONSOR OR THE TRUST, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE)
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE SPONSOR’S AND THE TRUST’S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM IN

A-1-1

ACCORDANCE
WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR
OR THE TRUST. HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

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

          THIS
SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100 SECURITIES) AND MULTIPLES
OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SECURITIES IN A BLOCK
HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER.

          THE
HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

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

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Certificate
  Number P-1

  	
  15,000
  Capital Securities

  	
   

  
	
   

  	
  [CUSIP
  NO. [_______] ]

  	
   

  	
   

  

September 21, 2006

Certificate Evidencing Floating Rate Capital
Securities

of

Alliance Financial Capital Trust II

A-1-2

(liquidation amount $1,000.00 per Capital
Security)

          Alliance
Financial Capital Trust II, a statutory trust created under the laws of
the State of Delaware (the “Trust”), hereby certifies that Cede & Co.
(the “Holder”) is the registered owner of capital securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
(liquidation amount $1,000.00 per capital security) (the “Capital Securities”).
Subject to the Declaration (as defined below), the Capital Securities are
transferable on the books and records of the Trust in person or by a duly
authorized attorney, upon surrender of this Certificate duly endorsed and in
proper form for transfer. The Capital Securities represented hereby are issued
pursuant to, and the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities shall in all respects
be subject to, the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of September 21, 2006, among J. Daniel Mohr,
John H. Watt, Jr. and Jack H. Webb, as Administrators,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Institutional Trustee, Alliance Financial Corporation, as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of
the Trust, including the designation of the terms of the Capital Securities as
set forth in Annex I to such amended and restated declaration as the same
may be amended from time to time (the “Declaration”). Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the Guarantee, and
the Indenture to the Holder without charge upon written request to the Sponsor
at its principal place of business.

          Upon
receipt of this Security, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.

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

          This
Capital Security is governed by, and construed in accordance with, the laws of
the State of Delaware, without regard to principles of conflict of laws.

Signatures appear on following page

A-1-3

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

	
   

  	
   

  	
   

  
	
   

  	
  ALLIANCE
  FINANCIAL CAPITAL TRUST II

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J.
  Daniel Mohr

  
	
   

  	
   

  	
  

  
	
   

  	
   

  	
  Name: J.
  Daniel Mohr

  
	
   

  	
   

  	
  Title:
  Administrator

  

CERTIFICATE OF AUTHENTICATION

          This
is one of the Capital Securities referred to in the within-mentioned
Declaration.

	
   

  	
   

  	
   

  
	
   

  	
  WILMINGTON
  TRUST COMPANY,

  
	
   

  	
  as the
  Institutional Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michele
  C. Harra

  
	
   

  	
   

  	
  

  
	
   

  	
   

  	
  Authorized
  Officer

  

A-1-4

[FORM OF REVERSE OF CAPITAL SECURITY]

          Distributions
payable on each Capital Security will be payable at an annual rate equal to
7.04% beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in December 2006 and at an annual
rate for each successive period beginning on (and including) the Distribution
Payment Date in December 2006, and each succeeding Distribution Payment Date,
and ending on (but excluding) the next succeeding Distribution Payment Date
(each a “Distribution Period”), equal to 3-Month LIBOR, determined as described
below, plus 1.65% (the “Coupon Rate”), applied to the stated liquidation amount
of $1,000.00 per Capital Security, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee. Distributions in
arrears will bear interest thereon compounded quarterly at the Distribution
Rate (to the extent permitted by applicable law). The term “Distributions” as
used herein includes cash distributions and any such compounded distributions
unless otherwise noted. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor. As used herein, “Determination Date” means the date that is two
London Banking Days (i.e., a business day in which dealings in deposits in U.S.
dollars are transacted in the London interbank market) preceding the
commencement of the relevant Distribution Period. The amount of the
Distribution payable for any Distribution Period will be calculated by applying
the Distribution Rate to the stated liquidation amount outstanding at the
commencement of the Distribution Period on the basis of the actual number of
days in the Distribution Period concerned divided by 360.

          “3-Month
LIBOR” as used herein, means the London interbank offered interest rate for
three-month U.S. dollar deposits determined by the Debenture Trustee in the
following order of priority: (i) the rate (expressed as a percentage per annum)
for U.S. dollar deposits having a three-month maturity that appears on Telerate
Page 3750 as of 11:00 a.m. (London time) on the related Determination Date
(“Telerate Page 3750” means the display designated as “Page 3750” on the
Moneyline Telerate Service or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Debenture Trustee
will request the principal London offices of four leading banks in the London
interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date. If at least two quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; (iii) if fewer than two
such quotations are provided as requested in clause (ii) above, the Debenture
Trustee will request four major New York City banks to provide such banks’
offered quotations (expressed as percentages per annum) to leading European
banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such
Determination Date. If at least two such quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; and (iv) if fewer than two
such quotations are provided as requested in clause (iii) above, 3-Month LIBOR
will be a 3-Month LIBOR determined with respect to the Distribution Period
immediately preceding such current Distribution Period. If the rate for U.S.
dollar deposits having a three-month maturity that initially appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination
Date is superseded on the Telerate Page 3750 by a corrected rate by 12:00 noon
(London time) on such Determination Date, then the corrected rate as so
substituted on the applicable page will be the applicable 3-Month LIBOR for
such Determination Date.

          The
Distribution Rate for any Distribution Period will at no time be higher than
the maximum rate then permitted by New York law as the same may be modified by
United States law.

          All
percentages resulting from any calculations on the Capital 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

A-1-5

.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)).

          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 or if any such day is not a Business Day, then
the next succeeding Business Day (each such day, a “Distribution Payment Date”)
(it being understood that interest accrues for any such non-Business Day),
commencing on the Distribution Payment Date in December 2006. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures, so long as no Acceleration Event of Default has occurred and is
continuing, by extending the interest payment period for up to 20 consecutive
quarterly periods (each an “Extension Period”) at any time and from time to
time on the Debentures, subject to the conditions described below, during which
Extension Period no interest shall be due and payable. During any Extension
Period, interest will continue to accrue on the Debentures, and interest on
such accrued interest will accrue at an annual rate equal to the Distribution
Rate in effect for each such Extension Period, compounded quarterly from the
date such interest would have been payable were it not for the Extension
Period, to the extent permitted by law (such interest referred to herein as
“Additional Interest”). No Extension Period may end on a date other than a
Distribution Payment Date. At the end of any such Extension Period, the
Debenture Issuer shall pay all interest then accrued and unpaid on the
Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date. Prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such period, provided that such period together with all such previous and
further consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Debenture Issuer may commence a new Extension Period,
subject to the foregoing requirements. No interest or Additional Interest shall
be due and payable during an Extension Period, except at the end thereof, but
each installment of interest that would otherwise have been due and payable
during such Extension Period shall bear Additional Interest. During any
Extension Period, Distributions on the Capital Securities shall be deferred for
a period equal to the Extension Period. If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust’s funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.

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

A-1-6

ASSIGNMENT

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

          _____________________________________________________________________

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

          _____________________________________________________________________

          _____________________________________________________________________

          (Insert
address and zip code of assignee) and irrevocably appoints

          _____________________________________________________________________

          agent
to transfer this Capital 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 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-1-7

EXHIBIT A-2

FORM OF COMMON SECURITY CERTIFICATE

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

          THIS
CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH SECTION 8.1 OF
THE DECLARATION.

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Certificate
  Number C-1

  	
  464 Common
  Securities

  	
   

  

September 21, 2006

Certificate Evidencing Floating Rate Common
Securities

of

Alliance Financial Capital Trust II

          Alliance
Financial Capital Trust II, a statutory trust created under the laws of
the State of Delaware (the “Trust”), hereby certifies that Alliance Financial
Corporation (the “Holder”) is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
(the “Common Securities”). The Common Securities represented hereby are issued
pursuant to, and the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities shall in all respects
be subject to, the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of September 21, 2006, among J. Daniel Mohr,
John H. Watt, Jr. and Jack H. Webb, as Administrators,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Institutional Trustee, Alliance Financial Corporation, as Sponsor, and the
holders from time to time of undivided beneficial interest in the assets of the
Trust including the designation of the terms of the Common Securities as set
forth in Annex I to such amended and restated declaration, as the same may be
amended from time to time (the “Declaration”). Capitalized terms used herein
but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the Guarantee and
the Indenture to the Holder without charge upon written request to the Sponsor
at its principal place of business.

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

          Upon
receipt 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
Common Security is governed by, and construed in accordance with, the laws of
the State of Delaware, without regard to principles of conflict of laws.

A-2-1

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

	
   

  	
   

  	
   

  
	
   

  	
  ALLIANCE
  FINANCIAL CAPITAL TRUST II

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J.
  Daniel Mohr

  
	
   

  	
   

  	
  

  
	
   

  	
   

  	
  Name: J.
  Daniel Mohr

  
	
   

  	
   

  	
  Title:
  Administrator

  

A-2-2

[FORM OF REVERSE OF COMMON SECURITY]

          Distributions
payable on each Common Security will be payable at an annual rate equal to
7.04% beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in December 2006 and at an annual
rate for each successive period beginning on (and including) the Distribution
Payment Date in December 2006, and each succeeding Distribution Payment Date,
and ending on (but excluding) the next succeeding Distribution Payment Date
(each a “Distribution Period”), equal to 3-Month LIBOR, determined as described
below, plus 1.65% (the “Coupon Rate”), applied to the stated liquidation amount
of $1,000.00 per Common Security, such rate being the rate of interest payable
on the Debentures to be held by the Institutional Trustee. Distributions in
arrears will bear interest thereon compounded quarterly at the Distribution
Rate (to the extent permitted by applicable law). The term “Distributions” as
used herein includes cash distributions and any such compounded distributions
unless otherwise noted. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor. As used herein, “Determination Date” means the date that is two
London Banking Days (i.e., a business day in which dealings in deposits in U.S.
dollars are transacted in the London interbank market) preceding the
commencement of the relevant Distribution Period. The amount of the
Distribution payable for any Distribution Period will be calculated by applying
the Distribution Rate to the stated liquidation amount outstanding at the
commencement of the Distribution Period on the basis of the actual number of
days in the Distribution Period concerned divided by 360.

          “3-Month
LIBOR” as used herein, means the London interbank offered interest rate for
three-month U.S. dollar deposits determined by the Debenture Trustee in the
following order of priority: (i) the rate (expressed as a percentage per annum)
for U.S. dollar deposits having a three-month maturity that appears on Telerate
Page 3750 as of 11:00 a.m. (London time) on the related Determination Date
(“Telerate Page 3750” means the display designated as “Page 3750” on the
Moneyline Telerate Service or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers’ Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollar deposits); (ii) if such rate
cannot be identified on the related Determination Date, the Debenture Trustee
will request the principal London offices of four leading banks in the London interbank
market to provide such banks’ offered quotations (expressed as percentages per
annum) to prime banks in the London interbank market for U.S. dollar deposits
having a three-month maturity as of 11:00 a.m. (London time) on such
Determination Date. If at least two quotations are provided, 3-Month LIBOR will
be the arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture
Trustee will request four major New York City banks to provide such banks’
offered quotations (expressed as percentages per annum) to leading European
banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such
Determination Date. If at least two such quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; and (iv) if fewer than two such
quotations are provided as requested in clause (iii) above, 3-Month LIBOR will
be a 3-Month LIBOR determined with respect to the Distribution Period
immediately preceding such current Distribution Period. If the rate for U.S.
dollar deposits having a three-month maturity that initially appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related Determination
Date is superseded on the Telerate Page 3750 by a corrected rate by 12:00 noon
(London time) on such Determination Date, then the corrected rate as so
substituted on the applicable page will be the applicable 3-Month LIBOR for
such Determination Date.

          The
Distribution Rate for any Distribution Period will at no time be higher than
the maximum rate then permitted by New York law as the same may be modified by
United States law.

          All
percentages resulting from any calculations on the Common 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

A-2-3

.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)).

          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 or if any such day is not a Business Day, then
the next succeeding Business Day (each such day, a “Distribution Payment Date”)
(it being understood that interest accrues for any such non-Business Day),
commencing on the Distribution Payment Date in December 2006. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures, so long as no Acceleration Event of Default has occurred and is continuing,
by extending the interest payment period for up to 20 consecutive
quarterly periods (each an “Extension Period”) at any time and from time to
time on the Debentures, subject to the conditions described below, during which
Extension Period no interest shall be due and payable. During any Extension
Period, interest will continue to accrue on the Debentures, and interest on
such accrued interest will accrue at an annual rate equal to the Distribution
Rate in effect for each such Extension Period, compounded quarterly from the
date such interest would have been payable were it not for the Extension
Period, to the extent permitted by law (such interest referred to herein as
“Additional Interest”). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period, the Debenture Issuer
shall pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no
Extension Period may extend beyond the Maturity Date. Prior to the termination
of any Extension Period, the Debenture Issuer may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Debenture Issuer may commence a new Extension Period,
subject to the foregoing requirements. No interest or Additional Interest shall
be due and payable during an Extension Period, except at the end thereof, but
each installment of interest that would otherwise have been due and payable
during such Extension Period shall bear Additional Interest. During any
Extension Period, Distributions on the Common Securities shall be deferred for
a period equal to the Extension Period. If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates, to Holders of the Securities as they appear on the books and
records of the Trust on the record date immediately preceding such date.
Distributions on the Securities must be paid on the dates payable (after giving
effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust’s funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer.

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

A-2-4

ASSIGNMENT

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

          _____________________________________________________________________

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

          _____________________________________________________________________

          _____________________________________________________________________

          (Insert
address and zip code of assignee) and irrevocably appoints

          _____________________________________________________________________

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  _____________________________________________________________________
  agent to transfer
  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:

  	
   

  
	
   

  	
   

  	
   

  	
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee2

  

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

A-2-5

EXHIBIT B

SPECIMEN OF INITIAL DEBENTURE

(See Document No. 17)

B-1

EXHIBIT C

PLACEMENT AGREEMENT

(See Document No. 1)

C-1

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