SOUTHERN COMMUNITY FINANCIAL CORPORATION AND WILMINGTON TRUST COMPANY, AS TRUSTEE INDENTURE

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Title: SOUTHERN COMMUNITY FINANCIAL CORPORATION AND WILMINGTON TRUST COMPANY, AS TRUSTEE INDENTURE
Governing Law: North Carolina Date: 3/30/2004
Industry: Regional Banks Sector: Financial

SOUTHERN COMMUNITY FINANCIAL CORPORATION

AND

WILMINGTON TRUST COMPANY, AS TRUSTEE

INDENTURE

, Parties: southern community financial corporation , wilmington trust company

<PAGE>

EXHIBIT 10.9

SOUTHERN COMMUNITY FINANCIAL CORPORATION

AND

WILMINGTON TRUST COMPANY, AS TRUSTEE

INDENTURE

7.95% DEFERRABLE INTEREST

JUNIOR SUBORDINATED DEBENTURES

DUE DECEMBER 31, 2033

DATED AS OF NOVEMBER 10, 2003

<PAGE>

TABLE OF CONTENTS

<TABLE>

PAGE

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ARTICLE I DEFINITIONS..................................................................................... 7

Section 1.1 Definitions of Terms ......................................................................... 7

ARTICLE II ISSUE, DESCRIPTION, TERMS, CONDITIONS REGISTRATION

AND EXCHANGE OF THE DEBENTURES ........................................................................... 15

Section 2.1 Designation and Principal Amount ............................................................. 15

Section 2.2 Maturity ..................................................................................... 15

Section 2.3 Form and Payment.............................................................................. 16

Section 2.4 Interest ..................................................................................... 16

Section 2.4A Defaulted Interest........................................................................... 17

Section 2.5 Execution and Authentications ................................................................ 18

Section 2.6 Registration of Transfer and Exchange ........................................................ 19

Section 2.7 Temporary Debentures ......................................................................... 20

Section 2.7A Global Securities............................................................................ 20

Section 2.8 Mutilated, Destroyed, Lost or Stolen Debentures .............................................. 22

Section 2.9 Cancellation ................................................................................. 22

Section 2.10 Benefit of Indenture ........................................................................ 23

Section 2.11 Authenticating Agent......................................................................... 23

Section 2.12 Right of Set-off............................................................................. 24

Section 2.13 CUSIP Numbers................................................................................ 24

ARTICLE III REDEMPTION OF DEBENTURES ..................................................................... 24

Section 3.1 Redemption ................................................................................... 24

Section 3.2 Special Event Redemption ..................................................................... 24

Section 3.3 Optional Redemption by Corporation ........................................................... 25

Section 3.4 Notice of Redemption ......................................................................... 26

Section 3.5 Payment Upon Redemption ...................................................................... 27

Section 3.6 No Sinking Fund .............................................................................. 27

ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD .......................................................... 27

Section 4.1 Extension of Interest Payment Period.......................................................... 27

Section 4.2 Notice of Extension .......................................................................... 28

Section 4.3 Limitation on Transactions ................................................................... 29

ARTICLE V PARTICULAR COVENANTS OF THE CORPORATION......................................................... 29

Section 5.1 Payment of Principal and Interest............................................................. 29

Section 5.2 Maintenance of Agency ........................................................................ 29

Section 5.3 Paying Agents ................................................................................ 30

Section 5.4 Appointment to Fill Vacancy in Office of Trustee ............................................. 31

Section 5.5 Compliance with Consolidation Provisions ..................................................... 31

Section 5.6 Limitation on Transactions ................................................................... 31

Section 5.7 Covenants as to the Trust .................................................................... 32

Section 5.8 Covenants as to Purchases .................................................................... 32

Section 5.9 Waiver of Usury, Stay or Extension Laws ...................................................... 32

</TABLE>

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ARTICLE VI DEBENTUREHOLDERS' LISTS AND REPORTS BY THE CORPORATION

AND THE TRUSTEE .......................................................................................... 33

Section 6.1 Corporation to Furnish Trustee Names and Addresses of Debentureholders ....................... 33

Section 6.2 Preservation of Information; Communications with Debentureholders ............................ 33

Section 6.3 Reports by the Corporation ................................................................... 33

Section 6.4 Reports by the Trustee ....................................................................... 34

Section 6.5 Statements as to Default...................................................................... 34

ARTICLE VII REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS

ON EVENT OF DEFAULT ...................................................................................... 35

Section 7.1 Events of Default ............................................................................ 35

Section 7.2 Collection of Indebtedness and Suits for Enforcement by Trustee .............................. 36

Section 7.3 Application of Moneys Collected .............................................................. 38

Section 7.4 Limitation on Suits .......................................................................... 38

Section 7.5 Rights and Remedies Cumulative; Delay or Omission not Waiver.................................. 39

Section 7.6 Control by Debentureholders .................................................................. 39

Section 7.7 Undertaking to Pay Costs ..................................................................... 40

Section 7.8 Direct Action by Holders of Preferred Securities ............................................. 40

ARTICLE VIII FORM OF DEBENTURE AND ORIGINAL ISSUE ........................................................ 41

Section 8.1 Form of Debenture ............................................................................ 41

Section 8.2 Original Issue of Debentures ................................................................. 41

ARTICLE IX CONCERNING THE TRUSTEE ........................................................................ 41

Section 9.1 Certain Duties and Responsibilities .......................................................... 41

Section 9.2 Notice of Defaults ........................................................................... 42

Section 9.3 Certain Rights of Trustee .................................................................... 43

Section 9.4 Trustee Not Responsible for Recitals, etc. ................................................... 44

Section 9.5 May Hold Debentures .......................................................................... 44

Section 9.6 Moneys Held in Trust ......................................................................... 44

Section 9.7 Compensation and Reimbursement ............................................................... 44

Section 9.8 Reliance on Officers' Certificate ............................................................ 45

Section 9.9 Disqualification; Conflicting Interests....................................................... 45

Section 9.10 Corporate Trustee Required; Eligibility ..................................................... 45

Section 9.11 Resignation and Removal; Appointment of Successor ........................................... 46

Section 9.12 Acceptance of Appointment by Successor ...................................................... 47

Section 9.13 Merger, Conversion, Consolidation or Succession to Business ................................. 48

Section 9.14 Preferential Collection of Claims Against the Corporation ................................... 48

ARTICLE X CONCERNING THE DEBENTUREHOLDERS................................................................. 48

Section 10.1 Evidence of Action by Holders................................................................ 48

Section 10.2 Proof of Execution by Debentureholders....................................................... 49

Section 10.3 Who May be Deemed Owners..................................................................... 49

Section 10.4 Certain Debentures Owned by Corporation Disregarded.......................................... 50

Section 10.5 Actions Binding on Future Debentureholders................................................... 50

ARTICLE XI SUPPLEMENTAL INDENTURES........................................................................ 50

Section 11.1 Supplemental Indentures Without the Consent of Debentureholders.............................. 50

Section 11.2 Supplemental Indentures with Consent of Debentureholders..................................... 52

Section 11.3 Effect of Supplemental Indentures............................................................ 52

Section 11.4 Debentures Affected by Supplemental Indentures............................................... 52

Section 11.5 Execution of Supplemental Indentures......................................................... 53

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ARTICLE XII SUCCESSOR CORPORATION......................................................................... 53

Section 12.1 Corporation May Consolidate, etc. ........................................................... 53

Section 12.2 Successor Corporation Substituted ........................................................... 54

Section 12.3 Evidence of Consolidation, etc. to Trustee................................................... 54

ARTICLE XIII SATISFACTION AND DISCHARGE .................................................................. 54

Section 13.1 Satisfaction and Discharge of Indenture ..................................................... 54

Section 13.2 Discharge of Obligations .................................................................... 55

Section 13.3 Deposited Moneys to be Held in Trust ........................................................ 55

Section 13.4 Payment of Monies Held by Paying Agents...................................................... 56

Section 13.5 Repayment to Corporation .................................................................... 56

ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS

AND DIRECTORS ............................................................................................ 56

Section 14.1 No Recourse ................................................................................. 56

ARTICLE XV MISCELLANEOUS PROVISIONS ...................................................................... 57

Section 15.1 Effect on Successors and Assigns ............................................................ 57

Section 15.2 Actions by Successor ........................................................................ 57

Section 15.3 Surrender of Corporation Powers ............................................................. 57

Section 15.4 Notices ..................................................................................... 58

Section 15.5 Governing Law ............................................................................... 58

Section 15.6 Treatment of Debentures as Debt ............................................................. 58

Section 15.7 Compliance Certificates and Opinions ........................................................ 58

Section 15.8 Payments on Business Days ................................................................... 59

Section 15.9 Trust Indenture Act; Conflicts with Trust Indenture Act ..................................... 59

Section 15.10 Counterparts ............................................................................... 59

Section 15.11 Severability ............................................................................... 59

Section 15.12 Assignment ................................................................................. 59

Section 15.13 Acknowledgment of Rights ................................................................... 59

ARTICLE XVI SUBORDINATION OF DEBENTURES .................................................................. 60

Section 16.1 Agreement to Subordinate .................................................................... 60

Section 16.2 Default on Senior Debt or Subordinated Debt.................................................. 60

Section 16.3 Liquidation; Dissolution; Bankruptcy ........................................................ 61

Section 16.4 Subrogation ................................................................................. 62

Section 16.5 Trustee to Effectuate Subordination ......................................................... 63

Section 16.6 Notice by the Corporation.................................................................... 63

Section 16.7 Rights of the Trustee; Holders of Senior Indebtedness ....................................... 64

Section 16.8 Subordination May Not Be Impaired............................................................ 64

</TABLE>

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CROSS-REFERENCE TABLE

<TABLE>

Section of Trust Indenture Act

Of 1939, As Amended Section of Indenture

<S> <C>

310(a)......................................................................... 19.10

310(b)......................................................................... 19.9

310(c)......................................................................... Not Applicable

311(a)......................................................................... 19.14

311(b)......................................................................... 19.14

311(c)......................................................................... Not Applicable

312(a)......................................................................... 6.1

312(b)......................................................................... 6.2(c)

312(c)......................................................................... 6.2(c)

313(a)......................................................................... 6.4(a)

313(b)......................................................................... 6.4(b)

313(c)......................................................................... 6.4(a)

313(d)......................................................................... 6.4(c)

314(a)......................................................................... 6.3(a)

314(b)......................................................................... Not Applicable

314(c)......................................................................... 15.7

314(d)......................................................................... Not Applicable

314(e)......................................................................... 15.7

314(f)......................................................................... Not Applicable

315(a)......................................................................... 9.1(a)

315(b)......................................................................... 9.2

315(c)......................................................................... 9.1(a)

315(d)......................................................................... 9.1(b)

315(e)......................................................................... 7.7

316(a)......................................................................... 1.1

316(b)......................................................................... 7.4(b)

316(c)......................................................................... 10.1(b)

317(a)......................................................................... 7.2

317(b)......................................................................... 5.3

318(a)......................................................................... 15.9

</TABLE>

Note: This reconciliation and tie sheet shall not, for any purpose,

be deemed to be a part of the Indenture

<PAGE>

INDENTURE

INDENTURE, dated as of November 10, 2003, between SOUTHERN COMMUNITY FINANCIAL

CORPORATION, a North Carolina Corporation (the "Corporation"), and WILMINGTON

TRUST COMPANY, a Delaware banking corporation (the "Trustee").

RECITALS

WHEREAS, for its lawful corporate purposes, the Corporation has duly authorized

the execution and delivery of this Indenture to provide for the issuance of

unsecured securities to be known as its 7.95% Deferrable Interest Junior

Subordinated Debentures due December 31, 2033 (hereinafter referred to as the

"Debentures"), the form and substance of such Debentures and the terms,

provisions and conditions thereof to be set forth as provided in this Indenture;

and

WHEREAS, Southern Community Capital Trust II, a Delaware statutory trust (the

"Trust"), has offered to the public up to $34,500,000 aggregate liquidation

amount of its Preferred Securities (as defined herein) and proposes to invest

the proceeds from such offering, together with the proceeds of the issuance and

sale by the Trust to the Corporation of up to $1,067,020 aggregate liquidation

amount of its Common Securities (as defined herein), in up to $35,567,020

aggregate principal amount of the Debentures; and

WHEREAS, the Corporation has requested that the Trustee execute and deliver this

Indenture; and

WHEREAS, all requirements necessary to make this Indenture a valid instrument in

accordance with its terms, and to make the Debentures, when executed by the

Corporation and authenticated and delivered by the Trustee, the valid

obligations of the Corporation, have been performed, and the execution and

delivery of this Indenture have been duly authorized in all respects; and

WHEREAS, to provide the terms and conditions upon which the Debentures are to be

authenticated, issued and delivered, the Corporation has duly authorized the

execution of this Indenture; and

WHEREAS, all things necessary to make this Indenture a valid agreement of the

Corporation, in accordance with its terms, have been done.

NOW, THEREFORE, in consideration of the premises and the purchase of the

Debentures by the Trust, it is mutually covenanted and agreed as follows for the

equal and ratable benefit of the holders of the Debentures and intending to be

legally bound hereby:

<PAGE>

ARTICLE I.

DEFINITIONS

SECTION 1.1 DEFINITIONS OF TERMS.

The terms defined in this Section 1.1 (except as in this Indenture 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 and shall include the plural

as well as the singular. All other terms that are used in this Indenture that

are defined in the Trust Indenture Act, or that are by reference in the Trust

Indenture Act defined in the Securities Act (except as herein otherwise

expressly provided or unless the context otherwise requires), shall have the

meanings assigned to such terms in the Trust Indenture Act and in the Securities

Act as in force at the date of the execution of this Indenture. All accounting

terms used herein and not expressly defined shall have the meanings assigned to

such terms in accordance with Generally Accepted Accounting Principles as in

effect at the time of computation.

"Accelerated Maturity Date" shall be the date selected by the

Corporation pursuant to Section 3.3 hereunder, provided that such date shall not

precede January 1, 2009, except as otherwise provided in Section 3.3(a) hereof.

"Additional Interest" shall have the meaning set forth in Section 2.4

of this Indenture.

"Administrative Trustees" shall have the meaning set forth in the Trust

Agreement.

"Affiliate" means, with respect to a specified Person, (a) any Person

directly or indirectly owning, controlling or holding with power to vote 10% or

more of the outstanding voting securities or other ownership interests of the

specified Person; (b) any Person 10% or more of whose outstanding voting

securities or other ownership interests are directly or indirectly owned,

controlled or held with power to vote by the specified Person; (c) any Person

directly or indirectly controlling, controlled by, or under common control with

the specified Person; (d) a partnership in which the specified Person is a

general partner; (e) any officer or director of the specified Person; and (f) if

the specified Person is an individual, any entity of which the specified Person

is an executive officer, director or general partner.

"Applicable Procedures" means, with respect to any transfer or

transaction involving a Global Security or beneficial interest therein, the

rules and procedures of the Depository for such Global Security, in each case to

the extent applicable to such transaction and as in effect from time to time.

"Authenticating Agent" means an authenticating agent with respect to

the Debentures appointed by the Trustee pursuant to Section 2.11.

"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or

state law for the relief of debtors.

<PAGE>

"Board of Directors" means the Board of Directors of the Corporation or

any duly authorized committee of such Board.

"Board Resolution" means a copy of a resolution certified by the

Secretary or an Assistant Secretary of the Corporation to have been duly adopted

by the Board of Directors and to be in full force and effect on the date of such

certification.

"Business Day" means, with respect to the Debentures, any day other

than a Saturday or a Sunday or a day on which banking institutions in the City

of New York, New York are authorized or required by law, executive order or

regulation to close, or a day on which the principal Corporate Trust Office of

the Trustee or the Property Trustee is closed for business.

"Capital Treatment Event" means the receipt by the Trust of an Opinion

of Counsel rendered by a law firm knowledgeable in such matters, to the effect

that, as a result of any amendment to, or change (including any proposed change)

in, the laws (or any regulations thereunder) of the United States or any

political subdivision thereof or therein, or as a result of any official or

administrative pronouncement or action or judicial decision interpreting or

applying such laws or regulations, which amendment or change is effective or

such proposed change pronouncement, action or decision is announced on or after

the date of original issuance of the Preferred Securities under the Trust

Agreement, there is more than an insubstantial risk that the Preferred

Securities would not constitute "Tier 1 Capital" (or the then equivalent

thereof) for purposes of the capital adequacy guidelines of the Federal Reserve

(or any successor regulatory authority with jurisdiction over bank holding

companies), or any capital adequacy guidelines as then in effect and applicable

to the Corporation.

"Certificate" means a certificate signed by the principal executive

officer, the principal financial officer, the principal accounting officer, the

treasurer or any vice president of the Corporation. The Certificate need not

comply with the provisions of Section 15.7.

"Commission" means the Securities and Exchange Commission, as from time

to time constituted, created under the Exchange Act, or, if at any time after

the execution of this instrument such Commission is not existing and performing

the duties now assigned to it under the Trust Indenture Act, then the body

performing such duties at such time.

"Common Securities" means undivided beneficial interests in the assets

of the Trust which rank pari passu with the Preferred Securities; provided,

however, that upon the occurrence of an Event of Default, the rights of holders

of Common Securities to payment in respect of (i) distributions and (ii)

payments upon liquidation, redemption and otherwise are subordinated to the

rights of holders of Preferred Securities.

"Compounded Interest" shall have the meaning set forth in Section 4.1.

"Corporate Trust Office" means (i) when used with respect to the

Trustee, the office of the Trustee at which, at any particular time, its

corporate trust business shall be principally administered, which office at the

date hereof is located at Rodney Square North, 1100 North Market Street,

Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration,

<PAGE>

or (ii) when used with respect to the Property Trustee, the office of the

Property Trustee, at which, at any particular time, its corporate trust business

shall be principally administered, which office at the date hereof is located at

Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,

Attention: Corporate Trust Administration.

"Corporation" means Southern Community Financial Corporation, a

corporation duly organized and existing under the laws of the State of North

Carolina, and, subject to the provisions of Article XII, shall also include its

successors and assigns.

"Coupon Rate" shall mean 7.95%.

"Custodian" means any receiver, trustee, assignee, liquidator, or

similar official under any Bankruptcy Law.

"Debentures" shall have the meaning set forth in the Recitals hereto.

"Debentureholder," "holder of Debentures," "registered holder," or

other similar term, means the Person or Persons in whose name or names a

particular Debenture shall be registered on the books of the Corporation or the

Trustee kept for that purpose in accordance with the terms of this Indenture.

"Debenture Register" shall have the meaning set forth in Section

2.6(b).

"Debt" means with respect to any Person, whether recourse is to all or

a portion of the assets of such Person and whether or not contingent, (i) every

obligation of such Person for money borrowed; (ii) every obligation of such

Person evidenced by bonds, debentures, notes or other similar instruments,

including obligations incurred in connection with the acquisition of property,

assets or businesses; (iii) every reimbursement obligation of such Person with

respect to letters of credit, bankers' acceptances or similar facilities issued

for the account of such Person; (iv) every obligation of such Person issued or

assumed as the deferred purchase price of property or services (but excluding

trade accounts payable or accrued liabilities arising in the ordinary course of

business); (v) every capital lease obligation of such Person; (vi) all

indebtedness of such Person, whether incurred on or prior to the date of the

Indenture or thereafter incurred, for claims in respect of financial derivative

products, including interest rate, foreign exchange rate and commodity forward

contracts, options, swaps and similar arrangements; (vii) every obligation of

the type referred to in clauses (i) through (v) of another Person and all

dividends of another Person the payment of which, in either case, such Person

has guaranteed or is responsible or liable, directly or indirectly, as obligor

or otherwise.

"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 provided in Section 2.4A hereof.

"Deferred Interest" shall have the meaning set forth in Section 4.1.

<PAGE>

"Depository" means, with respect to the Debentures issuable or issued

in whole or in part in the form of one or more Global Securities, the Person

designated as Depository by the Corporation pursuant to Section 2.3. The initial

Depository shall be the Depository Trust Company (DTC).

"Dissolution Event" means that as a result of the occurrence and

continuation of a Special Event, the Trust is to be dissolved in accordance with

the Trust Agreement and the Debentures held by the Property Trustee are to be

distributed to the holders of the Trust Securities issued by the Trust pro rata

in accordance with the Trust Agreement.

"Event of Default" means, with respect to the Debentures, any event

specified in Section 7.1, which has continued for the period of time, if any,

and after the giving of the notice, if any, therein designated.

"Exchange Act," means the Securities Exchange Act of 1934, as amended,

as in effect at the date of execution of this Indenture.

"Extended Interest Payment Period" shall have the meaning set forth in

Section 4.1.

"Federal Reserve" means the Board of Governors of the Federal Reserve

System.

"Generally Accepted Accounting Principles" means such accounting

principles as are generally accepted at the time of any computation required

hereunder.

"Global Security" means a Debenture evidencing all or part of the

Debentures, issued to the Depository or its nominee, and registered in the name

of such Depository or its nominee.

"Governmental Obligations" means securities that are (i) direct

obligations of the United States of America for the payment of which its full

faith and credit is pledged; or (ii) obligations of a Person controlled or

supervised by and acting as an agency or instrumentality of the United States of

America, the payment of which is unconditionally guaranteed as a full faith and

credit obligation by the United States of America that, in either case, are not

callable or redeemable at the option of the issuer thereof, and shall also

include a depository receipt issued by a bank (as defined in Section 3(a)(2) of

the Securities Act) as custodian with respect to any such Governmental

Obligation or a specific payment of principal of or interest on any such

Governmental Obligation held by such custodian for the account of the holder of

such depository receipt; provided, however, that (except as required by law)

such custodian is not authorized to make any deduction from the amount payable

to the holder of such depository receipt from any amount received by the

custodian in respect of the Governmental Obligation or the specific payment of

principal of or interest on the Governmental Obligation evidenced by such

depository receipt.

"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.

<PAGE>

"Indenture" means this instrument as originally executed or as it may

from time to time be supplemented or amended by one or more indentures

supplemental hereto entered into in accordance with the terms hereof.

"Interest Payment Date," when used with respect to any installment of

interest on the Debentures, shall have the meaning set forth in Section 2.4.

"Investment Company Act," means the Investment Company Act of 1940, as

amended, as in effect at the date of execution of this Indenture.

"Investment Company Event" means the receipt by the Trust of an Opinion

of Counsel rendered by a law firm knowledgeable in such matters, to the effect

that, as a result of the occurrence of a change in law or regulation or a change

in interpretation or application of law or regulation by any legislative body,

court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),

the Trust is or shall be considered an "investment company" that is required to

be registered under the Investment Company Act, which Change in 1940 Act Law

becomes effective on or after the date of original issuance of the Preferred

Securities under the Trust Agreement.

"Maturity Date" means the date on which the Debentures mature and on

which the principal shall be due and payable together with all accrued and

unpaid interest thereon including Compounded Interest and Additional Interest,

if any, as set forth in Section 2.2.

"Ministerial Action" shall have the meaning set forth in Section 3.2.

"Officers' Certificate" means a certificate signed by the Chairman,

President or a Vice President and by the Treasurer or an Assistant Treasurer or

the Controller or an Assistant Controller or the Secretary or an Assistant

Secretary, of the Corporation, and delivered to the Trustee. Any Officers'

Certificate delivered with respect to compliance with a condition or covenant

provided for in this Indenture shall include:

(a) a statement that each officer signing the Officers'

Certificate has read the covenant or condition and the definitions relating

thereto;

(b) a brief statement of the nature and scope of the examination

or investigation undertaken by each officer in rendering the Officers'

Certificate;

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.

<PAGE>

"Opinion of Counsel" means an opinion in writing of independent legal

counsel experienced in such matters as being opined upon, that is delivered to

the Trustee in accordance with the terms hereof.

"Other Debentures" means all junior subordinated debentures ranking

pari passu or junior to the Debentures (other than the Debentures) issued by the

Corporation from time to time and sold to trusts established or to be

established by the Corporation, in each case similar to the Trust to issue

securities intended to qualify for Tier I capital treatment.

"Outstanding" when used with reference to the Debentures, means,

subject to the provisions of Section 10.4, as of any particular time, all

Debentures theretofore authenticated and delivered by the Trustee under this

Indenture, except (a) Debentures theretofore canceled by the Trustee or any

paying agent, or delivered to the Trustee or any paying agent for cancellation

or that have previously been canceled; (b) Debentures or portions thereof for

the payment or redemption of which monies or Governmental Obligations in the

necessary amount shall have been deposited in trust with the Trustee or with any

paying agent (other than the Corporation) or shall have been set aside and

segregated in trust by the Corporation (if the Corporation shall act as its own

paying agent); provided, however, that if such Debentures or portions of such

Debentures are to be redeemed prior to the maturity thereof, notice of such

redemption shall have been given as provided in Article III or provision

satisfactory to the Trustee shall have been made for giving such notice; (c)

Debentures in lieu of or in substitution for which other Debentures shall have

been authenticated and delivered pursuant to the terms of Section 2.6; and (d)

Debentures paid pursuant to Section 2.8.

"Person" means any individual, corporation, partnership, joint-venture,

trust, business trust, limited liability company, joint-stock company,

unincorporated organization or government or any agency or political subdivision

thereof.

"Place of Payment" means the place or places where the principal of and

interest on the Debentures are payable in accordance with the terms of this

Indenture.

"Predecessor Debenture" means every previous Debenture evidencing all

or a portion of the same debt as that evidenced by such particular Debenture;

and, for the purposes of this definition, any Debenture authenticated and

delivered under Section 2.8 in lieu of a lost, destroyed or stolen Debenture

shall be deemed to evidence the same debt as the lost, destroyed or stolen

Debenture.

"Preferred 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 of an Event of Default, the

rights of holders of Common Securities to payment in respect of distributions

and payments upon liquidation, redemption and otherwise are subordinated to the

rights of holders of Preferred Securities.

"Preferred Securities Guarantee" means the Preferred Securities

Guarantee Agreement dated November 10, 2003, as amended from time to time, by

and between the Corporation, as

<PAGE>

guarantor, and the Trustee, executed and delivered for the benefit of the

Holders of the Preferred Securities.

"Prime Rate" or "Prime" means the prime rate as published in The Wall

Street Journal, and shall be adjusted daily. For days on which The Wall Street

Journal is not published, the Prime Rate shall be the prime rate that would have

been published in The Wall Street Journal if it had been published on such day.

In the event the Prime Rate shall cease to be published on a daily basis by The

Wall Street Journal or the method of its determination shall be materially

changed, then the Prime Rate shall be a comparable index rate selected by the

holders of a majority in principal amount of Debentures then Outstanding,

provided that if the Debentures are then held by the Trust or a trustee of the

Trust, such selection shall require the prior written consent of the holders of

a majority in liquidation preference of Trust Securities of the Trust.

"Property Trustee" has the meaning set forth in the Trust Agreement.

"Regular Record Date" means the 15th day of the last month of the

calendar quarter.

"Responsible Officer" when used with respect to the Trustee means any

officer of the Trustee in its corporate trust administration who is responsible

for the administration of the Trust and whose name appears on the list of

Responsible Officers of the Trustee which shall be furnished by the Trustee to

the Corporation, as such list may be revised from time to time.

"Scheduled Maturity Date" means December 31, 2033.

"Securities Act" means the Securities Act of 1933, or any successor

statute, in each case as amended from time to time.

"Senior Debt" means the principal of (and premium, if any) and

interest, if any (including interest accruing on or after the filing of any

petition in bankruptcy or for reorganization relating to the Corporation whether

or not such claim for post-petition interest is allowed in such proceeding), on

Debt, whether incurred on or prior to the date of this Indenture or thereafter

incurred, unless, in the instrument creating or evidencing the same or pursuant

to which the same is outstanding, it is provided that such obligations are not

superior in right of payment to the Debentures or to other Debt which is pari

passu with, or subordinated to, the Debentures; provided, however, that Senior

Debt shall not be deemed to include (i) any Debt of the Corporation which when

incurred and without respect to any election under Section 1111(b) of the

Bankruptcy Law was without recourse to the Corporation; (ii) any Debt of the

Corporation to any of its subsidiaries; (iii) any Debt to any employee of the

Corporation; and (iv) Debentures or Other Debentures, including Debentures sold

by the Corporation to the Trust.

"Senior Indebtedness" shall have the meaning set forth in Section 16.1.

"Special Event" means a Tax Event, an Investment Company Event or a

Capital Treatment Event.

<PAGE>

"Subordinated Debt" means the principal of (and premium, if any) and

interest, if any (including interest accruing on or after the filing of any

petition in bankruptcy or for reorganization relating to the Corporation whether

or not such claim for post-petition interest is allowed in such proceeding), on

Debt, whether incurred on or prior to the date of this Indenture or thereafter

incurred, which is by its terms expressly provided to be junior and subordinate

to other Debt of the Corporation (other than the Debentures), except that

Subordinated Debt shall not include: (i) any Debt of the Corporation which when

incurred and without respect to any election under Section 1111(b) of the United

States Bankruptcy Code of 1978, as amended, was without recourse to the

Corporation; (ii) any Debt of the Corporation to any of its Subsidiaries; (iii)

any Debt to any employee of the Corporation; (iv) Debentures or Other

Debentures, including Debentures sold by the Corporation to the Trust and (v)

any Debt which by its terms provides that it is not superior in right of payment

to the Debentures or to other Debt which is pari passu with, or subordinated to,

the Debentures.

"Subsidiary" means, with respect to any Person, (i) any corporation at

least a majority of whose outstanding Voting Stock shall at the time be 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, trust or similar entity, at least a majority of

whose outstanding partnership or similar interests 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.

"Tax Event" means the receipt by the Trust of an Opinion of Counsel

rendered by a law firm knowledgeable 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 or judicial decision interpreting or

applying such laws or regulations, which amendment or change is effective or

which pronouncement or decision is announced on or after the date of issuance of

the Preferred Securities under the Trust Agreement, there is more than an

insubstantial risk that (i) the Trust is, or shall be within 90 days after the

date of such Opinion of Counsel, subject to United States federal income tax

with respect to income received or accrued on the Debentures; (ii) interest

payable by the Corporation on the Debentures is not, or within 90 days after the

date of such Opinion of Counsel, shall not be, deductible by the Corporation, in

whole or in part, for United States federal income tax purposes; or (iii) the

Trust is, or shall be within 90 days after the date of such Opinion of Counsel,

subject to more than a de minimis amount of other taxes, duties, assessments or

other governmental charges. The Trust or the Corporation shall request and

receive such Opinion of Counsel with regard to such matters within a reasonable

period of time after the Trust or the Corporation shall have become aware of the

possible occurrence of any of the events described in clauses (i) through (iii)

above.

"Trust" means Southern Community Capital Trust II, a Delaware

statutory trust created by the Trust Agreement.

"Trust Agreement" means the Amended and Restated Trust Agreement, dated

November 10, 2003, of the Trust, as amended, modified or supplemented in

accordance with the applicable

<PAGE>

provisions thereof, among the trustees of the trust named therein, the

Corporation, as depositor, and the holders from time to time of undivided

beneficial ownership interests in the assets of the Trust, including all

exhibits thereto, including, for all purposes of the Trust Agreement, and any

such modification, amendment or supplement, the provisions of the Trust

Indenture Act that are deemed to be part of and govern the Trust Agreement and

any such modification, amendment or supplement, respectively.

"Trustee" means Wilmington Trust Company, acting not in its individual

capacity but solely as trustee under this Indenture, and, subject to the

provisions of Article IX, shall also include its successors and assigns, and, if

at any time there is more than one Person acting in such capacity hereunder,

"Trustee" shall mean each such Person.

"Trust Indenture Act" means the Trust Indenture Act of 1939, as

amended, subject to the provisions of Sections 11.1, 11.2, and 12.1, and any

successor statute thereto, in each case as amended from time to time.

"Trust Securities" means the Common Securities and Preferred

Securities, collectively.

"Voting Stock" as applied to stock of any Person, 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.

ARTICLE II.

ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION

AND EXCHANGE OF THE DEBENTURES

SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.

There are hereby authorized Debentures designated the "7.95% Deferrable

Interest Junior Subordinated Debentures Due December 31, 2033," limited in

aggregate principal amount to not more than Thirty-Five Million Five Hundred

Sixty-Seven Thousand Twenty Dollars ($35,567,020) which amount shall be as set

forth in any written order of the Corporation for the authentication and

delivery of Debentures pursuant to Section 2.5.

SECTION 2.2 MATURITY.

(a) The Maturity Date shall be either:

(i) the Scheduled Maturity Date; or

<PAGE>

(ii) if the Corporation elects to accelerate the

Maturity Date to be a date prior to the Scheduled Maturity Date in accordance

with Section 2.2(c), the Accelerated Maturity Date.

(b) The Corporation may at any time before the day which is 90

days before the Scheduled Maturity Date and after December 31, 2008, elect to

shorten the Maturity Date only once to the Accelerated Maturity Date provided

that the Corporation has received the prior approval of the Federal Reserve if

then required under applicable capital guidelines, policies or regulations of

the Federal Reserve.

accordance with Section 2.2(b), the Corporation shall give notice to the Trustee

and the Trust (unless the Trust is not the holder of the Debentures, in which

case the Trustee will give notice to the holders of the Debentures) of the

acceleration of the Maturity Date and the Accelerated Maturity Date at least 30

days and no more than 180 days before the Accelerated Maturity Date; provided,

however that nothing provided in this Section 2.2 shall limit the Corporation's

rights, as provided in Article III hereof, to redeem all or a portion of the

Debentures at such time or times on or after November 10, 2003, as the

Corporation may so determine, or at any time upon the occurrence of a Special

Event.

SECTION 2.3 FORM AND PAYMENT.

The Debentures shall be issued in certificated form without interest

coupons. Principal and interest on the Debentures issued in certificated form

shall be payable, the transfer of such Debentures shall be registrable and such

Debentures shall be exchangeable for Debentures bearing identical terms and

provisions at the office or agency of the Trustee; provided, however, that

payment of interest may be made at the option of the Corporation by check mailed

to the holder at such address as shall appear in the Debenture Register or by

wire transfer to an account maintained by the holder as specified in the

Debenture Register, provided that the holder provides proper wire transfer

instructions by the Regular Record Date. Notwithstanding the foregoing, so long

as the holder of any Debentures is the Property Trustee, the payment of the

principal of and interest on such Debentures held by the Property Trustee shall

be made at such place and to such account as may be designated by the Property

Trustee.

Debentures shall be issuable in whole or in part in the form of one or

more Global Securities and, in such case, the Depository for such Global

Securities shall be DTC.

SECTION 2.4 INTEREST.

(a) Each Debenture shall bear interest at the Coupon Rate from the

original date of issuance 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) on any overdue installment of interest at the

Coupon Rate, compounded quarterly, payable (subject to the provisions of Article

IV) quarterly in arrears on March 31, June 30, September 30 and December 31 of

each year (each, an "Interest Payment Date," commencing on December 31, 2003),

to the

<PAGE>

Person in whose name such Debenture or any Predecessor Debenture is registered

at 5:00 p.m., New York, New York time on the Regular Record Date next preceding

such Interest Payment Date.

(b) The amount of interest payable for any period shall be

computed on the basis of a 360-day year of twelve 30-day months. Any change in

the Coupon Rate shall be effective on the date of such change for purposes of

calculating interest for any period. Except as provided in the following

sentence, the amount of interest payable for any period shorter than a full

quarterly period for which interest is computed, shall be computed on the basis

of the actual number of days elapsed in such period, based on a 360-day year of

twelve 30-day months. In the event that any date on which interest is payable on

the Debentures is not a Business Day, then payment of interest payable on such

date shall be made on the next succeeding day which is a Business Day (and

without any interest or other payment in respect of any such delay), except

that, if such Business Day is in the next succeeding calendar year, such payment

shall be made on the immediately preceding Business Day (and without any

reduction of interest or any other payment in respect of any such acceleration),

in each case with the same force and effect as if made on the date such payment

was originally payable.

any Debentures, the Trust or the Property Trustee is required to pay any income

or other taxes, duties, assessments or governmental charges of whatever nature

(other than withholding taxes) imposed by the United States, or any other taxing

authority, then, in any case, the Corporation shall pay as additional interest

("Additional Interest") on the Debentures held by the Property Trustee, such

additional amounts as shall be required so that the net amounts received and

retained by the Trust and the Property Trustee after paying such taxes, duties,

assessments or other governmental charges shall be equal to the amounts the

Trust and the Property Trustee would have received had no such taxes, duties,

assessments or other governmental charges been imposed.

SECTION 2.4A DEFAULTED INTEREST.

Any interest on any Debenture that is payable, but is not punctually

paid or duly provided for, on any Interest Payment Date and (to the extent that

payment of such interest is enforceable) interest on any overdue installment of

interest at the Coupon Rate, compounded quarterly (herein called "Defaulted

Interest") shall, notwithstanding the provisions of Section 2.4(a), forthwith

cease to be payable to the holder on the relevant Regular Record Date by virtue

of having been such holder; and such Defaulted Interest shall be paid by the

Corporation, at its election, as provided in clause (a) or clause (b) below:

(a) The Corporation may make payment of any Defaulted Interest on

Debentures to the Persons in whose names such Debentures (or their respective

Predecessor Debentures) are registered at 5:00 p.m., New York, New York time on

a special record date for the payment of such Defaulted Interest, which shall be

fixed in the following manner: the Corporation shall notify the Trustee in

writing 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

Corporation 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

<PAGE>

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 herein 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 Corporation of such special

record date and, in the name and at the expense of the Corporation, 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 Debentureholder

at his or her 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 whose names

such Debentures (or their respective Predecessor Debentures) are registered on

such special record date and shall be no longer payable pursuant to Section

2.4A(b).

(b) The Corporation may make payment of any Defaulted Interest on

any Debentures in any other lawful manner not inconsistent with the requirements

of any securities exchange on which such Debentures may be listed, and upon such

notice as may be required by such exchange if, after notice given by the

Corporation to the Trustee of the proposed payment pursuant to this clause, such

manner of payment shall be deemed practicable by the Trustee.

SECTION 2.5 EXECUTION AND AUTHENTICATIONS.

(a) The Debenture(s) shall be signed on behalf of the Corporation

by its Chairman, President or one of its Vice Presidents, under its corporate

seal attested by its Secretary or one of its Assistant Secretaries. Signatures

may be in the form of a manual or facsimile signature. The Corporation may use

the facsimile signature of any Person who shall have been a Chairman, President

or Vice President thereof, or of any Person who shall have been a Secretary or

Assistant Secretary thereof, notwithstanding the fact that at the time the

Debentures shall be authenticated and delivered or disposed of such Person shall

have ceased to be the Chairman, President or a Vice President, or the Secretary

or an Assistant Secretary, of the Corporation (and any such signature shall be

binding on the Corporation). The seal of the Corporation may be in the form of a

facsimile of such seal and may be impressed, affixed, imprinted or otherwise

reproduced on the Debentures. The Debentures may contain such notations, legends

or endorsements as are required by law, stock exchange rule or usage. Each

Debenture shall be dated the date of its authentication by the Trustee.

(b) A Debenture shall not be valid until authenticated manually by

an authorized signatory of the Trustee, or by an Authenticating Agent. Such

signature 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.

delivery of this Indenture, the Corporation may deliver Debentures executed by

the Corporation to the Trustee for authentication, together with a written order

of the Corporation for the authentication and delivery of such Debentures signed

by its Chairman, President or any Vice President and its

<PAGE>

Secretary or any Assistant Secretary, and the Trustee in accordance with such

written order shall authenticate and make available for delivery such

Debentures.

(d) 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 9.1) shall be

fully protected in relying upon, an Opinion of Counsel stating that the form and

terms thereof have been established in conformity with the provisions of this

Indenture.

(e) The Trustee shall not be required to authenticate such

Debentures if the issue of such Debentures pursuant to this Indenture shall

affect the Trustee's own rights, duties or immunities under the Debentures and

this Indenture or otherwise in a manner that is not reasonably acceptable to the

Trustee.

SECTION 2.6 REGISTRATION OF TRANSFER AND EXCHANGE.

(a) Debentures may be exchanged upon presentation thereof at the

office or agency of the Corporation designated for such purpose, for other

Debentures in a like aggregate principal amount, upon payment of a sum

sufficient to cover any tax or other governmental charge in relation thereto,

all as provided in this Section 2.6. In respect of any Debentures so surrendered

for exchange, the Corporation shall execute, the Trustee shall authenticate and

such office or agency shall deliver in exchange therefor the Debenture or

Debentures that the Debenture holder making the exchange shall be entitled to

receive, bearing numbers not contemporaneously outstanding.

(b) The Corporation shall keep, or cause to be kept, at its office

or agency designated for such purpose or such other location designated by the

Corporation a register or registers (herein referred to as the "Debenture

the Corporation shall register the Debentures and the transfer of Debentures as

in this Article II provided and which at all reasonable times shall be open for

inspection by the Trustee. The registrar for the purpose of registering

Debentures and transfer of Debentures as herein provided shall be appointed as

authorized by Board Resolution (the "Debenture Registrar"). Upon surrender for

transfer of any Debenture at the office or agency of the Corporation designated

for such purpose, the Corporation shall execute, the Trustee shall authenticate

and such office or agency shall make available for delivery in the name of the

transferee or transferees a new Debenture or Debentures for a like aggregate

principal amount. All Debentures presented or surrendered for exchange or

registration of transfer, as provided in this Section 2.6, shall be accompanied

(if so required by the Corporation or the Debenture Registrar) by a written

instrument or instruments of transfer, in a form satisfactory to the Corporation

or the Debenture Registrar, duly executed by the registered holder or by such

holder's duly authorized attorney in writing.

registration of transfer of Debentures, or issue of new Debentures in case of

partial redemption, but the Corporation may require payment of a sum sufficient

to cover any tax or other governmental charge in relation

<PAGE>

thereto, other than exchanges pursuant to Section 2.7, Section 3.5(b) and

Section 11.4 not involving any transfer.

(d) The Corporation shall not be required (i) to issue, exchange

or register the transfer of any Debentures during a period beginning at the

opening of business 15 days before the day of the mailing of a notice of

redemption of less than all the Outstanding Debentures and ending at 5:00 p.m.,

New York, New York time on the day of such mailing; nor (ii) to register the

transfer or exchange of any Debentures or portions thereof called for

redemption.

(e) Notwithstanding any other provision of this Indenture,

transfers and exchanges of Debentures, whether pursuant to this Article II,

Section 3.5, Article IX or otherwise, shall be made only in accordance with this

Section 2.6(e).

(i) A Debenture that is not a Global Security may be transferred,

in whole or in part, to a Person who takes delivery in the

form of another Debenture that is not a Global Security or may

be exchanged, in whole or in part, for another Debenture that

is not a Global Security, as provided in this Section 2.6.

(ii) A beneficial interest in a Global Security may be transferred

or exchanged for a Debenture that is not a Global Security

only as provided in Section 2.7A.

SECTION 2.7 TEMPORARY DEBENTURES.

Pending the preparation of definitive Debentures, the Corporation may

execute, and the Trustee shall authenticate and deliver, temporary Debentures

(printed, lithographed, or typewritten). Such temporary Debentures shall be

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 Corporation. Every

temporary Debenture shall be executed by the Corporation and shall be

authenticated by the Trustee upon the same conditions and in substantially the

same manner, and with like effect, as the definitive Debentures. Without

unnecessary delay the Corporation shall execute and shall furnish definitive

Debentures and thereupon any or all temporary Debentures may be surrendered in

exchange therefor (without charge to the holders), at the office or agency of

the Corporation designated for such purpose, and the Trustee shall authenticate

and such office or agency shall deliver in exchange for such temporary

Debentures an equal aggregate principal amount of definitive Debentures, unless

the Corporation advises the Trustee to the effect that definitive Debentures

need not be executed and furnished until further notice from the Corporation.

Until so exchanged, the temporary Debentures shall be entitled to the same

benefits under this Indenture as definitive Debentures authenticated and

delivered hereunder.

SECTION 2.7A GLOBAL SECURITIES.

(a) Each Global Security issued under this Indenture shall be

registered in the name of the Depositary designated by the Corporation for such

Global Security or a nominee thereof and delivered to such Depositary or a

nominee thereof or custodian therefor, and each such Global Security shall

constitute a single Security for all purposes of this Indenture.

<PAGE>

(b) Notwithstanding any other provision in this Indenture, no

Global Security may be exchanged in whole or in part for Debentures registered,

and no transfer of a Global Security in whole or in part may be registered, in

the name of any Person other than the Depositary for such Global Security or a

nominee thereof unless (i) such Depositary advises the Trustee in writing that

such Depositary is no longer willing or able to properly discharge its

responsibilities as Depositary with respect to such Global Security, and the

Corporation is unable to locate a qualified successor, (ii) the Corporation

executes and delivers to the Trustee a Corporation order stating that the

Corporation elects to terminate the book-entry system through the Depositary, or

(iii) there shall have occurred and be continuing an Event of Default.

or cancelled in whole, it shall be surrendered by or on behalf of the Depositary

or its nominee to the Securities Registrar for exchange or cancellation as

provided in this Article II. If any Global Security is to be exchanged for other

Debentures or cancelled in part, or if another Debenture is to be exchanged in

whole or in part for a beneficial interest in any Global Security, then either

(i) such Global Security 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 cancelled, or equal to the principal amount of such Debenture 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 Securities Registrar,

whereupon the Trustee, in accordance with Applicable 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

Security by the Depositary, accompanied by registration instructions, the

Trustee shall, subject to Section 2.6 and as otherwise provided in this Article

II, authenticate and make available for delivery any Debentures issuable in

exchange for such Global Security (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) Except as otherwise provided in the preceding provisions of

this Section 2.7A, every Debenture authenticated and delivered upon registration

of transfer of, or in exchange for, or in lieu of, a Global Security or any

portion thereof, whether pursuant to this Article II, Section 3.5 or Article IX

or otherwise, shall be authenticated and delivered in the form of, and shall be,

a Global Security, unless such Debenture is registered in the name of a Person

other than the Depositary for such Global Security or a nominee thereof.

(e) The Depositary or its nominee, as the registered owner of a

Global Security, shall be the Holder of such Global Security for all purposes

under this Indenture and the Debenture, and owners of beneficial interests in a

Global Security shall hold such interests pursuant to Applicable Procedures.

Accordingly, any such owner's beneficial interest in a Global Security 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 agent. Neither the

Trustee nor the Securities Registrar shall have any liability in respect of any

transfers effected by the Depositary.

<PAGE>

(f) The rights of owners of beneficial interests in a Global

Security 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 Agent Members.

SECTION 2.8 MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.

(a) In case any temporary or definitive Debenture shall become

mutilated or be destroyed, lost or stolen, the Corporation (subject to the next

succeeding sentence) shall execute, and upon the Corporation's request the

Trustee (subject as aforesaid) shall authenticate and make available for

delivery, 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 Corporation 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 Corporation and the Trustee evidence to their

satisfaction of the destruction, loss or theft of the applicant's Debenture and

of the ownership thereof. The Trustee may authenticate any such substituted

Debenture and make available for delivery the same upon the written request or

authorization of any officer of the Corporation. Upon the issuance of any

substituted Debenture, the Corporation 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 (including the fees and expenses of the

Trustee) connected therewith. In case any Debenture that has matured or is about

to mature shall become mutilated or be destroyed, lost or stolen, the

Corporation 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 Corporation

and the Trustee such security or indemnity as they may require to save them

harmless, and, in case of destruction, loss or theft, evidence to the

satisfaction of the Corporation and the Trustee of the destruction, loss or

theft of such Debenture and of the ownership thereof.

(b) Every replacement Debenture issued pursuant to the provisions

of this Section 2.8 shall constitute an additional contractual obligation of the

Corporation whether or not the mutilated, destroyed, lost or stolen Debenture

shall be found at any time, or be enforceable by anyone, 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 the foregoing provisions are exclusive

with respect to the replacement or payment of mutilated, destroyed, lost or

stolen Debentures, and shall preclude (to the extent lawful) 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 2.9 CANCELLATION.

All Debentures surrendered for the purpose of payment, redemption,

exchange or registration of transfer shall, if surrendered to the Corporation or

any paying agent, be delivered to the Trustee for cancellation, or, if

surrendered to the Trustee, shall be canceled by it, and no Debentures shall be

issued in lieu thereof except as expressly required or permitted by any of the

<PAGE>

provisions of this Indenture. On request of the Corporation at the time of such

surrender, the Trustee shall deliver to the Corporation canceled Debentures held

by the Trustee. In the absence of such request the Trustee may dispose of

canceled Debentures in accordance with its standard procedures. If the

Corporation shall otherwise 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

delivered to the Trustee for cancellation.

SECTION 2.10 BENEFIT OF INDENTURE.

Nothing in this Indenture or in the Debentures, express or implied,

shall give or be construed to give to any Person, other than the parties hereto

and the holders of the Debentures (and, with respect to the provisions of

Article XVI, the holders of Senior Indebtedness) any legal or equitable right,

remedy or claim under or in respect of this Indenture, or under any covenant,

condition or provision herein contained; all such covenants, conditions, and

provisions being for the sole benefit of the parties hereto and the holders of

the Debentures (and, with respect to the provisions of Article XVI, the holders

of Senior Indebtedness).

SECTION 2.11 AUTHENTICATING AGENT.

(a) So long as any of the Debentures remain Outstanding there may

be an Authenticating Agent for any or all such Debentures, which the Trustee

shall have the right to appoint. Said Authenticating Agent shall be authorized

to act on behalf of the Trustee to authenticate Debentures issued upon exchange,

transfer or partial redemption thereof, and Debentures so authenticated shall be

entitled to the benefits of this Indenture and shall be valid and obligatory for

all purposes as if authenticated by the Trustee hereunder. All references in

this Indenture to the authentication of Debentures by the Trustee shall be

deemed to include authentication by an Authenticating Agent. Each Authenticating

Agent shall be acceptable to the Corporation and shall be a corporation that has

a combined capital and surplus, as most recently reported or determined by it,

sufficient under the laws of any jurisdiction under which it is organized or in

which it is doing business to conduct a trust business, and that is otherwise

authorized under such laws to conduct such business and is subject to

supervision or examination by federal or state authorities. If at any time any

Authenticating Agent shall cease to be eligible in accordance with these

provisions, it shall resign immediately.

(b) Any Authenticating Agent may at any time resign by giving

written notice of resignation to the Trustee and to the Corporation. The Trustee

may at any time (and upon request by the Corporation shall) terminate the agency

of any Authenticating Agent by giving written notice of termination to such

Authenticating Agent and to the Corporation. Upon resignation, termination or

cessation of eligibility of any Authenticating Agent, the Trustee may appoint an

eligible successor Authenticating Agent acceptable to the Corporation. Any

successor Authenticating Agent, upon acceptance of its appointment hereunder,

shall become vested with all the rights, powers and duties of its predecessor

hereunder as if originally named as an Authenticating Agent pursuant hereto.

<PAGE>

SECTION 2.12 RIGHT OF SET-OFF.

With respect to the Debentures initially issued to the Trust,

notwithstanding anything to the contrary herein, the Corporation shall have the

right to set-off any payment it is otherwise required to make in respect of any

such Debenture to the extent the Corporation has theretofore made, or is

concurrently on the date of such payment making, a payment under the Preferred

Securities Guarantee relating to such Debenture or to a holder of Preferred

Securities pursuant to an action undertaken under Section 7.8 of this Indenture.

SECTION 2.13 CUSIP NUMBERS.

The Corporation 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 Debentureholders; provided 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

numbers printed on the Debentures, and any such redemption shall not be affected

by any defect in or omission or such numbers. The Corporation will promptly

notify the Trustee of any change in the CUSIP numbers.

ARTICLE III

REDEMPTION OF DEBENTURES

SECTION 3.1 REDEMPTION.

Subject to the Corporation having received prior regulatory approval,

if then required under applicable capital guidelines or regulatory policies, the

Corporation may redeem the Debentures issued hereunder on and after the dates

set forth in and in accordance with the terms of this Article III.

SECTION 3.2 SPECIAL EVENT REDEMPTION.

Subject to the Corporation having received prior regulatory approval,

if then required under applicable capital guidelines or regulatory policies, if

a Special Event, as defined in Section 1.1 hereof, has occurred and is

continuing, then, notwithstanding Section 3.3(a), but subject to Section 3.3(b),

the Corporation shall have the right upon not less than 30 days nor more than 60

days notice to the holders of the Debentures to redeem the Debentures, in whole

but not in part, for cash within 90 days following the occurrence of such

Special Event (the "90-Day Period") at a redemption price equal to 100% of the

principal amount to be redeemed plus any accrued and unpaid interest thereon to

the date of such redemption (the "Redemption Price"), provided that if such

Special Event is a Tax Event and at the time there is available to the

Corporation the opportunity to eliminate, within the 90-Day Period, such Tax

Event by taking some ministerial action (a "Ministerial Action"), such as filing

a form or making an election, or pursuing some other similar reasonable measure

which has no adverse effect on the Corporation, the Trust or the holders of the

Trust Securities, the Corporation shall pursue such Ministerial Action in lieu

<PAGE>

redemption, and, provided further, that the Corporation shall have no right to

redeem the Debentures while the Trust is pursuing any Ministerial Action

pursuant to its obligations under the Trust Agreement. The Redemption Price

shall be paid prior to 12:00 noon, New York, New York time, on the date of such

redemption or such earlier time as the Corporation determines, provided that the

Corporation shall deposit with the Trustee an amount sufficient to pay the

Redemption Price by 10:00 a.m., New York, New York time, on the date such

Redemption Price is to be paid.

SECTION 3.3 OPTIONAL REDEMPTION BY CORPORATION.

(a) Subject to the provisions of Section 3.3(c), except as

otherwise may be specified in this Indenture, the Corporation shall have the

right to redeem the Debentures, in whole or in part, from time to time on or

after January 1, 2009, at a Redemption Price equal to 100% of the principal

amount to be redeemed plus any accrued and unpaid interest thereon to the date

of such redemption. Any redemption pursuant to this Section 3.3(a) shall be made

upon not less than 30 days' nor more than 60 days' notice to the holder of the

Debentures, at the Redemption Price. If the Debentures are only partially

redeemed pursuant to this Section 3.3(a), the Debentures shall be redeemed pro

rata or by lot or in such other manner as the Trustee shall deem appropriate and

fair in its discretion. The Redemption Price shall be paid prior to 12:00 noon,

New York, New York time, on the date of such redemption or at such earlier time

as the Corporation determines provided that the Corporation shall deposit with

the Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New

York, New York time, on the date such Redemption Price is to be paid.

(b) Subject to the provisions of Section 3.3(c), the Corporation

shall have the right to redeem Debentures at any time and from time to time in a

principal amount equal to the Liquidation Amount (as defined in the Trust

Agreement) of any Preferred Securities purchased and beneficially owned by the

Corporation, plus an additional principal amount of Debentures equal to the

Liquidation Amount (as defined in the Trust Agreement) of that number of Common

Securities that bears the same proportion to the total number of Common

Securities then outstanding as the number of Preferred Securities to be redeemed

bears to the total number of Preferred Securities then outstanding. Such

Debentures shall be redeemed pursuant to this Section 3.3(b) only in exchange

for and upon surrender by the Corporation to the Property Trustee of the

Preferred Securities and a proportionate amount of Common Securities, whereupon

the Property Trustee shall cancel the Preferred Securities and Common Securities

so surrendered and a Like Amount (as defined in the Trust Agreement) of

Debentures shall be extinguished by the Trustee and shall no longer be deemed

Outstanding.

delisting of the Preferred Securities issued by the Trust from The Nasdaq

National Market or any national securities exchange or other organization on

which the Preferred Securities are then listed or quoted, the Corporation shall

not be permitted to effect such partial redemption and may only redeem the

Debentures in whole.

<PAGE>

SECTION 3.4 NOTICE OF REDEMPTION.

(a) Except in the case of redemption pursuant to Section 3.3(b),

in case the Corporation shall desire to exercise such right to redeem all or a

portion of the Debentures in accordance with the right reserved so to do, the

Corporation shall, or shall cause the Trustee to, upon receipt of 45 days'

written notice from the Corporation (which notice shall, in the event of a

partial redemption, include a representation to the effect that such partial

redemption will not result in the delisting of the Preferred Securities as

described in Section 3.3(c) above), give notice of such redemption to holders of

the Debentures to be redeemed by mailing, first class postage prepaid, a notice

of such redemption not less than 30 days and not more than 60 days before the

date fixed for redemption to such holders at their last addresses as they shall

appear upon the Debenture Register unless a shorter period is specified in the

Debentures to be redeemed. Any notice that is mailed in the manner herein

provided shall be conclusively presumed to have been duly given, whether or not

the registered holder receives the notice. In any case, failure to duly give

such notice to the holder of any Debenture designated for redemption in whole or

in part, or any defect in the notice, shall not affect the validity of the

proceedings for the redemption of any other Debentures. In the case of any

redemption of Debentures prior to the expiration of any restriction on such

redemption provided in the terms of such Debentures or elsewhere in this

Indenture, the Corporation shall furnish the Trustee with an Officers'

Certificate evidencing compliance with any such restriction. Each such notice of

redemption shall identify the Debenture to be redeemed (including CUSIP numbers,

if any) and shall specify the date fixed for redemption and the Redemption Price

and shall state that payment of the Redemption Price shall be made at the office

or agency of the Corporation or at the Corporate Trust Office, upon presentation

and surrender of such Debentures, that interest accrued to the date fixed for

redemption shall be paid as specified in said notice and that from and after

said date interest shall cease to accrue. If less than all the Debentures are to

be redeemed, the notice to the holders of the Debentures shall specify the

particular Debentures to be redeemed. If any Debenture is to be redeemed in part

only, the notice shall state the portion of the principal amount thereof to be

redeemed (which shall be Ten Dollars ($10) or a multiple thereof) and shall

state that on and after the redemption date, upon surrender of such Debenture, a

new Debenture or Debentures in principal amount equal to the unredeemed portion

thereof shall be issued.

(b) Except in the case of redemption pursuant to Section 3.3(b),

if less than all the Debentures are to be redeemed, the Corporation shall give

the Trustee at least 45 days notice in advance of the date fixed for redemption

as to the aggregate principal amount of Debentures to be redeemed, and thereupon

the Trustee shall select, in such manner as it shall deem appropriate and fair

in its discretion, the portion or po

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