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                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                      among

                     U.S.B. HOLDING CO., INC., as Depositor,

                            THE CHASE MANHATTAN BANK,
                              as Property Trustee,

                         CHASE MANHATTAN BANK DELAWARE,
                              as Delaware Trustee,

                                       and

                    THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

                          Dated as of February 5, 1997

                           UNION STATE CAPITAL TRUST I

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<PAGE>

                           UNION STATE CAPITAL TRUST I

            Certain Sections of this Amended and Restated Declaration of Trust
relating to Sections 310 through 318 of the Trust Indenture Act of 1939:

    Trust Indenture                                           Declaration of
      Act Section                                             Trust Section
    ---------------                                           --------------

  ss.310(a)(1).............................................       8.07
        (a)(2).............................................       8.07
        (a)(3).............................................       8.09
        (a)(4).............................................       2.07(a)(ii)
        (b)................................................       8.08
  ss.311(a)................................................       8.13
        (b)................................................       8.13
  ss.312(a)................................................       5.08
        (b)................................................       5.08
        (c)................................................       5.08
  ss.313(a)................................................       8.14
        (a)(4).............................................       8.14
        (b)................................................       8.14
        (c)................................................      10.09
        (d)................................................       8.14
  ss.314(a)................................................    8.14, 8.15
        (b)................................................  Not Applicable
        (c)(1).............................................       8.16
        (c)(2).............................................       8.16
        (c)(3).............................................  Not Applicable
        (d)................................................  Not Applicable
        (e)................................................  1.01, 8.16, 8.01(a)
  ss.315(a)................................................       8.03(a)
        (b)................................................       8.02, 10.09
        (c)................................................       8.01(a)
        (d)................................................       8.01, 8.03
        (e)................................................  Not Applicable
  ss.316(a)................................................  Not Applicable
        (a)(1)(A)..........................................  Not Applicable
        (a)(1)(B)..........................................  Not Applicable
        (a)(2).............................................  Not Applicable
        (b)................................................       5.13
        (c)................................................       6.07
  ss.317(a)(1).............................................  Not Applicable
        (a)(2).............................................  Not Applicable
        (b)................................................       5.10
  ss.318(a)................................................      10.11

----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
      part of this Amended and Restated Declaration of Trust.
<PAGE>

                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
                                  ARTICLE I

                                DEFINED TERMS

SECTION 1.01.  DEFINITIONS  .................................................2

                                  ARTICLE II

                          CONTINUATION OF THE TRUST

SECTION 2.01.  NAME  .......................................................11
SECTION 2.02.  OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS..11
SECTION 2.03.  ORGANIZATIONAL EXPENSES  ....................................12
SECTION 2.04.  ISSUANCE OF THE CAPITAL SECURITIES  .........................12
SECTION 2.05.  ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE
                OF JUNIOR DEBT SECURITIES  .................................12
SECTION 2.06.  DECLARATION OF TRUST  .......................................12
SECTION 2.07.  AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.............13
SECTION 2.08.  ASSETS OF TRUST  ............................................17
SECTION 2.09.  TITLE TO TRUST PROPERTY  ....................................17

                                 ARTICLE III

                               PAYMENT ACCOUNT

SECTION 3.01.  PAYMENT ACCOUNT  ............................................17

                                  ARTICLE IV

                          DISTRIBUTIONS; REDEMPTION

SECTION 4.01.  DISTRIBUTIONS  ..............................................17
SECTION 4.02.  REDEMPTION  .................................................19
SECTION 4.03.  SUBORDINATION OF COMMON SECURITIES  .........................21
SECTION 4.04.  PAYMENT PROCEDURES  .........................................21
SECTION 4.05.  TAX RETURNS AND REPORTS  ....................................21
SECTION 4.06.  PAYMENT OF TAXES; DUTIES, ETC. OF THE TRUST  ................22
SECTION 4.07.  PAYMENTS UNDER INDENTURE  ...................................22

                                  ARTICLE V

                        TRUST SECURITIES CERTIFICATES

SECTION 5.01.  INITIAL OWNERSHIP  ..........................................22
SECTION 5.02.  TRUST SECURITIES CERTIFICATES  ..............................22
SECTION 5.03.  EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES  ....23
<PAGE>

SECTION 5.04.  GLOBAL CAPITAL SECURITY  ....................................23
SECTION 5.05.  REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY; CERTAIN
                TRANSFERS AND EXCHANGES; CAPITAL SECURITIES CERTIFICATES;
                SECURITIES ACT LEGENDS  ....................................24
SECTION 5.06.  MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
                CERTIFICATES  ..............................................30
SECTION 5.07.  PERSONS DEEMED SECURITYHOLDERS  .............................30
SECTION 5.08.  ACCESS TO LIST OF SECURITYHOLDERS, NAMES AND ADDRESSES  .....30
SECTION 5.09.  MAINTENANCE OF OFFICE OR AGENCY.  ...........................30
SECTION 5.10.  APPOINTMENT OF PAYING AGENT  ................................31
SECTION 5.11.  OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR  ................31
SECTION 5.12.  NOTICES TO CLEARING AGENCY  .................................32
SECTION 5.13.  RIGHTS OF SECURITYHOLDERS  ..................................32

                                  ARTICLE VI

                  ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

SECTION 6.01.  LIMITATIONS ON CAPITAL SECURITYHOLDER'S VOTING RIGHTS  ......34
SECTION 6.02.  NOTICE OF MEETINGS  .........................................35
SECTION 6.03.  MEETINGS OF SECURITYHOLDERS  ................................35
SECTION 6.04.  VOTING RIGHTS  ..............................................36
SECTION 6.05.  PROXIES  ....................................................36
SECTION 6.06.  SECURITYHOLDER ACTION BY WRITTEN CONSENT  ...................36
SECTION 6.07.  RECORD DATE FOR VOTING AND OTHER PURPOSES  ..................36
SECTION 6.08.  ACTS OF SECURITYHOLDERS  ....................................36
SECTION 6.09.  INSPECTION OF RECORDS  ......................................37

                                 ARTICLE VII

                        REPRESENTATIONS AND WARRANTIES

SECTION 7.01.  REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE  .....38
SECTION 7.02.  REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE  .....38
SECTION 7.03.  REPRESENTATIONS AND WARRANTIES OF DEPOSITOR  ................39

                                 ARTICLE VIII

                                 THE TRUSTEES

SECTION 8.01.  CERTAIN DUTIES AND RESPONSIBILITIES  ........................39
SECTION 8.02.  EVENTS OF DEFAULT NOTICES; DEFERRAL OF INTEREST PAYMENT
                NOTICES  ...................................................41
SECTION 8.03.  CERTAIN RIGHTS OF PROPERTY TRUSTEE  .........................41
SECTION 8.04.  NOT RESPONSIBLE FOR RECITALS  ...............................44
SECTION 8.05.  MAY HOLD SECURITIES  ........................................44
SECTION 8.06.  COMPENSATION, INDEMNITY, FEES  ..............................44
SECTION 8.07.  CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES 45
SECTION 8.08.  CONFLICTING INTERESTS  ......................................46
SECTION 8.09.  CO-TRUSTEES AND SEPARATE TRUSTEE  ...........................46
SECTION 8.10.  RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR  ..........48


                                      (ii)
<PAGE>

SECTION 8.11.  ACCEPTANCE OF APPOINTMENT BY SUCCESSOR  .....................49
SECTION 8.12.  MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS  50
SECTION 8.13.  PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST 50
SECTION 8.14.  REPORTS BY PROPERTY TRUSTEE  ................................51
SECTION 8.15.  REPORTS TO THE PROPERTY TRUSTEE  ............................51
SECTION 8.16.  EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT  ...........51
SECTION 8.17.  NUMBER OF TRUSTEES  .........................................51
SECTION 8.18.  DELEGATION OF POWER  ........................................52

                                  ARTICLE IX

                     TERMINATION, LIQUIDATION AND MERGER

SECTION 9.01.  TERMINATION UPON EXPIRATION DATE; TERMINATION UPON SPECIAL
                EVENT  .....................................................52
SECTION 9.02.  EARLY TERMINATION  ..........................................52
SECTION 9.03.  TERMINATION  ................................................53
SECTION 9.04.  LIQUIDATION  ................................................53
SECTION 9.05.  MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
                TRUST  .....................................................55

                                  ARTICLE X

                           MISCELLANEOUS PROVISIONS

SECTION 10.01.  LIMITATION OF RIGHTS OF SECURITYHOLDERS  ...................56
SECTION 10.02.  LIABILITY OF THE DEPOSITOR  ................................56
SECTION 10.03.  AMENDMENT  .................................................56
SECTION 10.04.  SEPARABILITY  ..............................................57
SECTION 10.05.  GOVERNING LAW  .............................................58
SECTION 10.06.  PAYMENTS DUE ON NON-BUSINESS DAY  ..........................58
SECTION 10.07.  SUCCESSORS  ................................................58
SECTION 10.08.  HEADINGS  ..................................................58
SECTION 10.09.  REPORTS, NOTICES AND DEMANDS  ..............................58
SECTION 10.10.  AGREEMENT NOT TO PETITION  .................................59
SECTION 10.11.  TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT  ....59
SECTION 10.12.  ACCEPTANCE OF TERMS OF DECLARATION OF TRUST, GUARANTEE AND
                INDENTURE  .................................................60


                                     (iii)
<PAGE>

                  AMENDED AND RESTATED DECLARATION OF TRUST, dated as of
                  February 5, 1997, among (i) U.S.B. HOLDING CO., INC., a
                  Delaware corporation (including any successors or assigns, the
                  "Depositor"), (ii) THE CHASE MANHATTAN BANK, a New York
                  banking corporation, as property trustee (in such capacity,
                  the "Property Trustee" and, in its separate corporate capacity
                  and not in its capacity as Property Trustee, the "Bank"),
                  (iii) CHASE MANHATTAN BANK Delaware, a Delaware banking
                  corporation, as Delaware trustee (the "Delaware Trustee"),
                  (iv) Thomas E. Hales, an individual, (v) Michael H. Fury an
                  individual, (vi) Raymond J. Crotty, an individual, and (vii)
                  Steven T. Sabatini, an individual, each of whose address is
                  c/o U.S.B. Holding Co., Inc. (each an "Administrative Trustee"
                  and collectively, the "Administrative Trustees") (the Property
                  Trustee, the Delaware Trustee and the Administrative Trustees
                  are referred to collectively herein as the "Trustees") and
                  (viii) the several Holders, as hereinafter defined.

                            W I T N E S S E T H :

            WHEREAS the Depositor, the Delaware Trustee and the Administrative
Trustees have heretofore duly declared and established a business trust pursuant
to the Business Trust Act of the State of Delaware by entering into a certain
Declaration of Trust, dated as of January 27, 1997 (the "Original Declaration of
Trust"), and by the execution and filing by the Delaware Trustee and the
Administrative Trustees with the Secretary of State of the State of Delaware of
a Certificate of Trust, filed on January 27, 1997 (the "Certificate of Trust"),
a copy of which is attached hereto as Exhibit A; and

            WHEREAS the Depositor, the Delaware Trustee and the Administrative
Trustees desire to amend and restate the Original Declaration of Trust in its
entirety as set forth herein to provide for, among other things, (i) the
issuance and sale of the Common Securities, as hereinafter defined, by Union
State Capital Trust I (the "Trust") to the Depositor, (ii) the issuance and sale
of the 9.58% Capital Securities (the "Initial Capital Securities") by the Trust
pursuant to the Purchase Agreement, as hereinafter defined, (iii) the issuance
pursuant to a registered exchange for the Initial Capital Securities of 9.58%
Capital Securities (the "Exchange Capital Securities"), (iv) the acquisition by
the Trust from the Depositor of all of the right, title and interest in the
Junior Subordinated Debt Securities, and (v) the appointment of the Bank as the
Property Trustee.

            NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, each party, for the benefit of the other
parties and for the benefit of the Securityholders, hereby amends and restates
the Original Declaration of Trust in its entirety and agrees as follows:


                                      -1-
<PAGE>

                                    ARTICLE I

                                  Defined Terms

            SECTION 1.01. Definitions. For all purposes of this Declaration of
Trust, except as otherwise expressly provided or unless the context otherwise
requires:

            (a) the terms defined in this Article I have the meanings assigned
      to them in this Article I and include the plural as well as the singular;

            (b) all other terms used herein that are defined in the Trust
      Indenture Act, either directly or by reference therein, have the meanings
      assigned to them therein;

            (c) unless the context otherwise requires, any reference to an
      "Article" or a "Section" refers to an Article or a Section, as the case
      may be, of this Declaration of Trust;

            (d) the words "herein", "hereof" and "hereunder" and other words of
      similar import refer to this Declaration of Trust as a whole and not to
      any particular Article, Section or other subdivision; and

            (e) all references to the date the Capital Securities were
      originally issued shall refer to the date the Initial Capital Securities
      were originally issued.

            "Act" has the meaning specified in Section 6.08.

            "Additional Distribution" has the meaning specified in Section
4.01(c).

            "Administrative Trustee" means each of Thomas E. Hales, Michael H.
Fury, Raymond J. Crotty, and Steven T. Sabatini solely in such Person's capacity
as Administrative Trustee of the Trust continued hereunder and not in such
Person's individual capacity, or such Administrative Trustee's successor in
interest in such capacity, or any successor trustee appointed as herein
provided.

            "Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

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


                                      -2-
<PAGE>

            "Bank" has the meaning specified in the preamble to this Declaration
of Trust.

            "Bankruptcy Event" means, with respect to any Person:

            (a) the entry of a decree or order by a court having jurisdiction in
      the premises judging such Person a bankrupt or insolvent, or approving as
      properly filed a petition seeking reorganization, arrangement,
      adjudication or composition of or in respect of such Person under any
      applicable federal or state bankruptcy, insolvency, reorganization or
      other similar law, or appointing a receiver, liquidator, assignee,
      trustee, sequestrator (or other similar official) of such Person or of any
      substantial part of its property or ordering the winding up or liquidation
      of its affairs, and the continuance of any such decree or order unstayed
      and in effect for a period of 60 consecutive days; or

            (b) the institution by such Person of proceedings to be adjudicated
      a bankrupt or insolvent, or the consent by it to the institution of
      bankruptcy or insolvency proceedings against it, or the filing by it of a
      petition or answer or consent seeking reorganization or relief under any
      applicable federal or state bankruptcy, insolvency, reorganization or
      other similar law, or the consent by it to the filing of any such petition
      or to the appointment of a receiver, liquidator, assignee, trustee,
      sequestrator (or similar official) of such Person or of any substantial
      part of its property or the making by it of an assignment for the benefit
      of creditors, or the admission by it in writing of its inability to pay
      its debts generally as they become due and its willingness to be
      adjudicated a bankrupt, or the taking of corporate action by such Person
      in furtherance of any such action.

            "Board Resolution" means a copy of a resolution certified by the
Secretary of an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Depositor to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the Trustees.

            "Business Day" means a day other than (a) a Saturday or Sunday, (b)
a day on which banking institutions in the City of New York are authorized or
required by law or executive order to remain closed or (c) a day on which the
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.

            "Capital Securities" means, at any given time, the Initial Capital
Securities and the Exchange Capital Securities issued and outstanding at such
time, treated together as a single class hereunder.

            "Capital Securities Certificate" means a certificate evidencing
ownership of Capital Securities, substantially in the form attached as Exhibit
B.


                                      -3-
<PAGE>

            "Capital Securityholder" means a Person in whose name a Capital
Security or Capital Securities is registered in the Securities Register; and any
such Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.

            "Certificate  of Trust" has the meaning  specified in the preamble
to this Declaration of Trust.

            "Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company shall be the initial Clearing Agency.

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

            "Closing Date" means February 5, 1997.

            "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, 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 the 9.58% Common Securities, each
representing an undivided beneficial interest in the assets of the Trust, having
a Liquidation Amount of $1,000 and having the rights provided therefor in this
Declaration of Trust, including the right to receive Distributions and a
Liquidation Distribution as provided herein.

            "Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.

            "Corporate  Trust  Office"  means  the  principal  office  of  the
Property  Trustee  located in New York City which at the time of the execution
of this  Declaration of Trust is located at 450 West 33rd Street,  15th Floor,
New  York,  NY  10001-2697,   Attention:   Corporate  Trustee   Administration
Department.

            "Debenture  Event of  Default"  means an  "Event  of  Default"  as
defined in the Indenture.

            "Debenture Trustee" means The Chase Manhattan Bank, a New York
banking corporation, as trustee under the Indenture, and any successor trustee
under the Indenture.

            "Declaration of Trust" means this Amended and Restated Declaration
of Trust, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto, including,
for all purposes of this Amended and Restated Declaration of Trust, the
provisions of the Trust Indenture Act that are deemed to


                                      -4-
<PAGE>

be a part of and govern this Amended and Restated Declaration of Trust and any
modification, amendment or supplement of either, respectively.

            "Definitive Capital Securities Certificate" means a Capital
Securities Certificate issued in certificated, fully registered form.

            "Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ss.ss. 3801, et seq., as it may be amended from time
to time.

            "Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Declaration of Trust solely in its capacity as
Delaware Trustee of the Trust continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
trustee appointed in such capacity as herein provided.

            "Depositor"  has the  meaning  specified  in the  preamble to this
Declaration of Trust.

            "Distribution Date" has the meaning specified in Section 4.01(a).

            "Distributions"  means  amounts  payable  in  respect of the Trust
Securities as provided in Section 4.01.

            "Early Termination Event" has the meaning specified in Section 9.02.

            "Event of Default" 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 occurrence of a Debenture Event of Default; or

            (b) default by the Trust in the payment of any Distribution when it
      becomes due and payable, and continuation of such default for a period of
      30 days; or

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

            (d) default in the performance, or breach of any covenant or
      warranty of any Trustee in this Declaration of Trust (other than a
      covenant or warranty, a default in the performance or breach of which is
      addressed in clause (b) or (c) 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 defaulting Trustee or Trustees 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


                                      -5-
<PAGE>

            (e) the occurrence of a Bankruptcy Event with respect to the
      Property Trustee and the failure by the Depositor to appoint a successor
      Property Trustee within 60 days thereof.

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

            "Exchange Capital Securities" means the 9.58% Capital Securities,
Series B, issued in exchange for the Initial Capital Securities in an Exchange
Offer in accordance with the Registration Rights Agreement, each representing an
undivided beneficial interest in the assets of the Trust, having a Liquidation
Amount of $1,000 per Exchange Capital Security and having the rights provided
therefor in this Declaration of Trust, including the right to receive
Distributions and a Liquidation Distribution.

            "Exchange Offer" has the meaning set forth in Section 5.05(d).

            "Expiration Date" has the meaning specified in Section 9.01.

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

            "Global Capital Securities" means a Capital Security registered in
the name of a Clearing Agency, beneficial ownership and transfers of which shall
be made through book entries by such Clearing Agency as described in Section
5.04.

            "Global Capital Securities Certificate" means a certificate
evidencing ownership of Global Capital Securities, substantially in the form
attached as Exhibit B.

            "Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and The Chase Manhattan Bank, as trustee, contemporaneously with
the execution and delivery of this Declaration of Trust, for the benefit of the
Holders of the Trust Securities, as amended from time to time, provided, that
following the consummation of the Exchange Offer, such term shall be deemed to
refer to the Exchange Guarantee (as defined in the Registration Rights
Agreement).

             "Indenture" means the Indenture, dated as of February 5, 1997,
between the Depositor and the Debenture Trustee (as amended or supplemented from
time to time), relating to the issuance of the Junior Subordinated Debt
Securities.

            "Initial Capital Securities" means the 9.58% Capital Securities,
Series A, of the Trust issued on the date hereof, each representing an undivided
beneficial interest in the assets of the Trust, having a Liquidation Amount of
$1,000 per Capital Security and having the rights provided therefor in this
Declaration of Trust, including the right to receive Distributions and a
Liquidation Distribution.

            "Initial Purchaser" means Keefe, Bruyette & Woods, Inc.


                                      -6-
<PAGE>

            "Institutional Accredited Investor" means an institutional
accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act.

            "Junior Subordinated Debt Securities" means the aggregate principal
amount of the Depositor's 9.58% Junior Subordinated Debt Securities due February
1, 2027, issued pursuant to the Indenture.

            "Junior Subordinated Debt Securities Redemption Date" means, with
respect to any Junior Subordinated Debt Securities to be redeemed under the
Indenture, the date fixed for redemption under the Indenture.

            "Letter of Representations" means the agreement among the Trust, the
Property Trustee and The Depository Trust Company ("DTC"), as the initial
Clearing Agency, dated as of the Closing Date.

            "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed
of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.

            "Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having an aggregate Liquidation Amount equal to the
principal amount of Junior Subordinated Debt Securities to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Trust Securities
based upon their relative Liquidation Amounts and the proceeds of which will be
used to pay the Redemption Price of such Trust Securities, and (b) with respect
to a distribution of Junior Subordinated Debt Securities to Holders in
connection with a dissolution or liquidation of the Trust, Junior Subordinated
Debt Securities having an aggregate principal amount equal to the aggregate
Liquidation Amount of the Trust Securities of the Holder to whom such Junior
Subordinated Debt Securities are distributed.

            "Liquidation Amount" means the stated amount of $1,000 per Trust
Security.

            "Liquidation Date" means the date on which Junior Subordinated Debt
Securities are to be distributed to Holders of Trust Securities in connection
with a termination and liquidation of the Trust pursuant to Section 9.04(a).

            "Liquidation Distribution" has the meaning specified in Section
9.04(d).

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

            "Officers' Certificate" means a certificate signed by the Chairman,
the Chief Executive Officer, President or a Vice President, and by the
Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an Assistant Secretary, of the Depositor, and delivered to the
appropriate Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 8.16 shall be the principal executive, financial or
accounting officer of the Depositor. Any Officers' Certificate delivered with
respect to


                                      -7-
<PAGE>

compliance with a condition or covenant provided for in this Declaration of
Trust 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;

            (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.

            "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of any thereof, and which opinion shall be reasonably acceptable to the
Property Trustee.

            "Original Declaration of Trust" has the meaning specified in the
preamble to this Declaration of Trust.

            "Other Capital Securities" means the Capital Securities sold by the
Initial Purchaser in the initial offering contemplated by the Purchase Agreement
to Institutional Accredited Investors in reliance on an exemption from the
registration requirements of the Securities Act other than Rule 144A.

            "Outstanding", with respect to Capital Securities, means, as of the
date of determination, all Capital Securities theretofore executed and delivered
under this Declaration of Trust, except:

            (a) Capital Securities theretofore canceled by the Property Trustee
      or delivered to the Property Trustee for cancellation;

            (b) Capital Securities for whose payment or redemption money in the
      necessary amount has been theretofore deposited with the Property Trustee
      or any Paying Agent for the benefit of the Holders of such Capital
      Securities; provided that if such Capital Securities are to be redeemed,
      notice of such redemption has been duly given pursuant to this Declaration
      of Trust; and

            (c) Capital Securities which have been paid or in exchange for or in
      lieu of which other Capital Securities have been executed and delivered
      pursuant to Sections 5.02, 5.04, 5.05, 5.11 or 5.13;


                                      -8-
<PAGE>

provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or any Trustee shall be disregarded and deemed not to be Outstanding, except
that (a) in determining whether any Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Capital Securities that a Responsible Officer of such Trustee actually
knows to be so owned shall be so disregarded and (b) the foregoing shall not
apply at any time when all of the outstanding Capital Securities are owned by
the Depositor, one or more of the Trustees and/or any such Affiliate. Capital
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Administrative
Trustees the pledgee's right so to act with respect to such Capital Securities
and that the pledgee is not the Depositor or any Affiliate of the Depositor.

            "Owner" means each Person who is the beneficial owner of a Global
Capital Security as reflected in the records of the Clearing Agency or, if a
Clearing Agency Participant is not the Owner, then as reflected in the records
of a Person maintaining an account with such Clearing Agency (directly or
indirectly), in accordance with the rules of such Clearing Agency.

            "Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.09 and shall initially be the Property Trustee.

            "Payment Account" means a segregated noninterest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Junior Subordinated Debt Securities will be held and from which
the Property Trustee shall make payments to the Securityholders in accordance
with Sections 4.01 and 4.02.

            "Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.

            "Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Declaration of
Trust solely in its capacity as Property Trustee of the Trust continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as herein provided.

            "Purchase Agreement" means the Purchase Agreement, dated as of
January 31, 1997, among the Trust, the Depositor and the Initial Purchaser.

            "Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Declaration
of Trust, provided, however, that each Junior Subordinated Debt Securities
Redemption Date and the Stated


                                      -9-
<PAGE>

Maturity of the Junior Subordinated Debt Securities shall be a Redemption Date
for a Like Amount of Trust Securities.

            "Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Junior Subordinated Debt Securities, allocated on a pro rata basis (based on
Liquidation Amounts) among the Trust Securities.

            "Registration Agreement" means the Registration Rights Agreement
dated as of February 5, 1997, among the Trust, the Depositor and the Initial
Purchaser.

            "Registration Statement" has the meaning specified in the
Registration Agreement.

            "Regulation D" means Regulation D under the Securities Act (or any
successor provision), as it may be amended from time to time.

            "Regulatory Capital Event" has the meaning specified in Section 1.01
of the Indenture.

            "Relevant Trustee" has the meaning specified in Section 8.10.

            "Responsible Officer" means, when used with respect to the Property
Trustee, any officer of the Property Trustee having direct responsibility for
the administration for this Declaration of Trust, and also means, with respect
to a particular matter, any other officer of the Property Trustee, to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.

            "Restricted Capital Securities" means all Capital Securities
required pursuant to Section 5.05(c) to bear a Restricted Capital Securities
Legend, including the Global Capital Securities.

            "Restricted Capital Securities Certificate" means a certificate
substantially in the form set forth in Exhibit D.

            "Restricted Capital Securities Legend" means a legend substantially
in the form of the legend required in Section 5.05(c).

            "Rule 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.

            "Rule 144A Capital Securities" means the Capital Securities
purchased by the Initial Purchaser from the Trust pursuant to the Purchase
Agreement, other than the Other Capital Securities.

            "Securities Act" means the Securities Act of 1933, as amended.


                                      -10-
<PAGE>

            "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.05.

            "Securityholder" or "Holder" means a Person in whose name a Trust
Security or Trust Securities is registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.

            "Special Event" means either a Tax Event or a Regulatory Capital
Event.

            "Stated Maturity" has the meaning specified in Section 1.01 of the
Indenture.

            "Tax Event" has the meaning specified in Section 1.01 of the
Indenture.

            "Trust" means Union State Capital Trust I.

            "Trust Indenture Act" has the meaning specified in Section 1.01 of
the Indenture.

            "Trust Property" means (a) the Junior Subordinated Debt Securities,
(b) the rights of the Property Trustee under the Guarantee, (c) any cash or
deposit in, or owing to, the Payment Account and (d) all proceeds and rights in
respect of the foregoing.

            "Trust Securities Certificate" means any one of the Common
Securities Certificates or the Capital Securities Certificates.

            "Trust  Security"  means any one of the Common  Securities  or the
Capital Securities.

            "Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.

                                   ARTICLE II

                            Continuation of the Trust

            SECTION 2.01. Name. The Trust continued hereby shall be known as
"Union State Capital Trust I," as such name may be modified from time to time by
the Administrative Trustees following written notice to the Holders and the
other Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.

            SECTION 2.02. Office of the Delaware Trustee; Principal Place of
Business. The address of the Delaware Trustee in the State of Delaware is Chase
Manhattan Bank Delaware, 1201 Market Street, 9th Floor, Wilmington, DE 19801,
Attention: Corporate Trustee Administration Department, or such other address in
the State of Delaware as the Delaware Trustee may designate by written notice to
the Securityholders and the Depositor. The principal executive office of the
Trust is in care of U.S.B. Holding Co., Inc., 100 Dutch


                                      -11-
<PAGE>

Hill Road, Orangeburg, New York 10962, Attention: Steven T. Sabatini, Executive
Vice President and Chief Financial Officer.

            SECTION 2.03. Organizational Expenses. The Depositor, as issuer of
the Junior Subordinated Debt Securities, shall pay all expenses of the Trust as
they arise or shall, upon request of any Trustee, promptly reimburse such
Trustee for any such expenses paid by such Trustee. The Depositor shall make no
claim upon the Trust Property for the payment of such expenses.

            SECTION 2.04. Issuance of the Capital Securities. The Capital
Securities to be issued will be limited to $20 million aggregate Liquidation
Amount outstanding at any one time.

            On January 31, 1997, the Depositor and an Administrative Trustee, on
behalf of the Trust, and pursuant to the Original Declaration of Trust, and the
Initial Purchaser executed and delivered the Purchase Agreement.
Contemporaneously with the execution and delivery of this Declaration of Trust,
an Administrative Trustee, on behalf of the Trust, shall execute or cause to be
executed in accordance with Section 5.02 and the Property Trustee shall upon the
written order of the Depositor, countersign and deliver to the initial Clearing
Agency or its custodian on behalf of the Initial Purchaser, a Global Capital
Securities Certificate registered in the name of the nominee of the initial
Clearing Agency, in an aggregate amount of Capital Securities having an
aggregate Liquidation Amount of $20 million against receipt by the
Administrative Trustees of the aggregate purchase price of such Capital
Securities equal to 100% of the Liquidation Amount multiplied by the number of
Capital Securities being purchased.

            SECTION 2.05. Issuance of the Common Securities; Subscription and
Purchase of Junior Debt Securities. Contemporaneously with the execution and
delivery of this Declaration of Trust, an Administrative Trustee, on behalf of
the Trust, shall execute or cause to be executed in accordance with Section
5.02(a) and delivered to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of 619 Common
Securities having an aggregate Liquidation Amount of $619,000 against payment by
the Depositor of $619,000, which amount the Administrative Trustees shall
promptly deliver to the Property Trustee. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Junior Subordinated Debt Securities, registered in the name
of the Trust and having an aggregate principal amount equal to $20,619,000, and,
in satisfaction of the purchase price for such Junior Subordinated Debt
Securities, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the sum of $20,619,000.

            SECTION 2.06. Declaration of Trust. The exclusive purposes and
functions of the Trust are to (a) issue and sell Trust Securities, (b) use the
proceeds from the sale of Trust Securities to acquire the Junior Subordinated
Debt Securities, (c) receive payments to be made with respect to the Junior
Subordinated Debt Securities, and (d) engage in only those other activities
necessary, advisable or incidental thereto, such as registering the transfer of
the


                                      -12-
<PAGE>

Capital Securities and complying with the terms of the Registration Agreement.
The Depositor hereby appoints the Trustees as trustees of the Trust, to have all
the rights, powers and duties to the extent set forth herein, and the Trustees
hereby accept such appointment subject to the terms hereof. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.

           SECTION 2.07. Authorization to Enter into Certain Transactions. (a)
The Trustees shall conduct the affairs of the Trust in accordance with the terms
of this Declaration of Trust. Subject to the limitations set forth in paragraph
(b) of this Section and in accordance with the following provisions (i) and
(ii), the Trustees shall have the authority to enter into all transactions and
agreements necessary to exercise the authority granted to the Trustees under
this Declaration of Trust, including, without limitation, the following acts:

            (i) As among the Trustees, each Administrative Trustee 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 Trust Securities;

                  (B) to cause the Trust to enter into, and to execute, deliver
            and perform on behalf of the Trust, the Purchase Agreement, the
            Registration Agreement, the Letter of Representations and such other
            agreements as may be necessary or desirable in connection with the
            purposes and function of the Trust;

                  (C) assisting the Depositor in the registration of the Capital
            Securities under the Securities Act and under state securities or
            blue sky laws, and the qualification of this Declaration of Trust as
            a trust indenture under the Trust Indenture Act;

                  (D) assisting the Depositor in the listing, if any, of the
            Capital Securities upon such securities exchange or exchanges as
            shall be determined by the Depositor and the registration of the
            Capital Securities under the Exchange Act, and the preparation and
            filing of all periodic and other reports and other documents
            pursuant to the foregoing;

                  (E) the sending of notices (other than notices of default) and
            other information regarding the Trust Securities and the Junior
            Subordinated Debt Securities to the Securityholders in accordance
            with this Declaration of Trust;


                                      -13-
<PAGE>

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

                  (G) registering transfer of the Trust Securities in accordance
            with this Declaration of Trust;

                  (H) to the extent provided in this Declaration of Trust, the
            winding up of the affairs 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) unless otherwise determined by the Depositor, the Property
            Trustee or the Administrative Trustees or as otherwise required by
            the Delaware Business Trust Act or the Trust Indenture Act, to
            execute on behalf of the Trust (either acting alone or together with
            any or all of the Administrative Trustees) any documents that the
            Administrative Trustees have the power to execute pursuant to this
            Declaration of Trust; and

                  (J) the taking of any action incidental to the foregoing as
            the Trustees may from time to time determine is necessary or
            advisable to give effect to the terms of this Declaration of Trust
            for the benefit of the Securityholders (without consideration of the
            effect of any such action on any particular Securityholders).

            (ii) As among the Trustees, the Property 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 Payment Account;

                  (B) the receipt of the Junior Subordinated Debt Securities;

                  (C) the collection of interest, principal and any other
            payments made in respect of the Junior Subordinated Debt Securities
            in the Payment Account;

                  (D) so long as it is acting as Paying Agent, the distribution
            of amounts owed to the Securityholders in respect of the Trust
            Securities;

                  (E) the exercise of all of the rights, powers and privileges
            of a holder of the Junior Subordinated Debt Securities, provided,
            however, that the Property Trustee shall not exercise such rights
            unless it shall have received an Opinion of Counsel to the effect
            that such exercise would not cause more than an insubstantial risk
            that the Trust fails to be treated as a grantor trust for federal
            income tax purposes;


                                      -14-
<PAGE>

                  (F) the sending of notices of default and other information
            regarding the Trust Securities and the Junior Subordinated Debt
            Securities to the Securityholders in accordance with this
            Declaration of Trust;

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

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

                  (I) after an Event of Default, the taking of any action
            incidental to the foregoing as the Property Trustee may from time to
            time determine is necessary or advisable to give effect to the terms
            of this Declaration of Trust and protect and conserve the Trust
            Property for the benefit of the Securityholders (without
            consideration of the effect of any such action on any particular
            Securityholder); and

                  (J) except as otherwise provided in this Section 2.07(a)(ii),
            the Property Trustee shall have none of the duties, liabilities,
            powers or the authority of the Administrative Trustees set forth in
            Section 2.07(a)(i).

            (b) So long as this Declaration of Trust remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transactions except as expressly provided herein or
contemplated hereby. In particular, but without limitation, the Trustees shall
not (i) acquire any investments or engage in any activities not authorized by
this Declaration of Trust, (ii) sell, assign, transfer, exchange, mortgage,
pledge, set-off or otherwise dispose of any of the Trust Property or interests
therein, including to Securityholders, except as expressly provided herein,
(iii) knowingly take any action that would cause the Trust to fail or cease to
qualify as a "grantor trust" for United States federal income tax purposes, (iv)
incur any indebtedness for borrowed money or issue any other debt, (v) take or
consent to any action that would result in the placement of a Lien on any of the
Trust Property, (vi) invest any proceeds received by the Trust from holding the
Junior Subordinated Debt Securities, but shall distribute all such proceeds to
Holders pursuant to the terms of this Declaration of Trust and of the Trust
Securities, (vii) acquire any assets other than the Trust Property, (viii)
possess any power or otherwise act in such a way as to vary the Trust Property,
(ix) possess any power or otherwise act in such a way as to vary the terms of
the Trust Securities in any way whatsoever (except to the extent expressly
authorized in this Declaration of Trust or by the terms of the Trust
Securities), (x) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Trust Securities, or
(xi) other than as provided in this Declaration of Trust or by the terms of the
Trust Securities, (A) direct the time, method and place of exercising any trust
or power conferred upon the Debenture Trustee with respect to the Junior
Subordinated Debt Securities, (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 Junior Subordinated Debt Securities


                                      -15-
<PAGE>

shall be due and payable, or (D) consent to any amendment, modification, or
termination of the Indenture or the Junior Subordinated Debt Securities where
such consent shall be required unless the Trust shall have received an Opinion
of Counsel to the effect that such amendment, modification or termination will
not cause more than an insubstantial risk that the Trust will be deemed an
Investment Company required to be registered under the Investment Company Act,
the Trust will not be classified as a grantor trust for United States federal
income tax purposes or the Junior Subordinated Debt Securities will not be
classified as indebtedness for such purposes. The Administrative Trustees shall
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
Securityholders in their capacity as Securityholders.

            (c) In connection with the issue and sale of the Trust Securities,
the Depositor 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 Depositor in furtherance of the following prior to the date of this
Declaration of Trust are hereby ratified and confirmed in all respects):

            (i) the preparation and filing by the Trust with the Commission and
      the execution on behalf of the Trust of a registration statement on the
      appropriate form in relation to the Trust Securities, including any
      amendments thereto;

            (ii) the determination of the states in which to take appropriate
      action to qualify or register for sale all or part of the Trust 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 Trustees
      of actions they must take on behalf of the Trust, and the preparation for
      execution and filing of any documents to be executed and filed by the
      Trust or on behalf of the Trust, as the Depositor deems necessary or
      advisable in order to comply with the applicable laws of any such states;

            (iii) the preparation for filing by the Trust and execution on
      behalf of the Trust of an application to permit the Capital Securities to
      trade as quoted or listed in or on the Private Offering, Resales and
      Trading through Automated Linkages ("PORTAL") Market of the National
      Association of Securities Dealers, Inc. or any other securities exchange
      quotation system or the NASDAQ National Market;

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

            (v) 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
Administrative Trustees 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 of 1940, as amended, or (ii) fail to be classified as a grantor
trust for United States federal income tax purposes and so that the Junior


                                      -16-
<PAGE>

Subordinated Debt Securities will be treated as indebtedness of the Depositor
for United States federal income tax purposes. In this connection, the Depositor
and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the Certificate of Trust or this Declaration
of Trust, that each of the Depositor and the Administrative Trustees determines
in their discretion to be necessary or desirable for such purposes, as long as
such action does not adversely affect in any material respect the interests of
the Holders of the Trust Securities.

            SECTION  2.08.  Assets of  Trust.  The  assets of the Trust  shall
consist solely of the Trust Property.

            SECTION 2.09. Title to Trust Property. Legal title to all Trust
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and administered by the Property Trustee for the
benefit of the Trust and the Securityholders in accordance with this Declaration
of Trust.

                                   ARTICLE III

                                 Payment Account

            SECTION 3.01. Payment Account. (a) On or prior to the Closing Date,
the Property Trustee shall establish the Payment Account. The Property Trustee
and any agent of the Property Trustee shall have exclusive control and sole
right of withdrawal with respect to the Payment Account for the purpose of
making deposits in and withdrawals from the Payment Account in accordance with
this Declaration of Trust. All moneys and other property deposited or held from
time to time in the Payment Account shall be held by the Property Trustee in the
Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein or by applicable law.

            (b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Junior Subordinated Debt
Securities. Amounts held in the Payment Account shall not be invested by the
Property Trustee pending distribution thereof.

                                   ARTICLE IV

                            Distributions; Redemption

            SECTION 4.01. Distributions. (a) Distributions on the Trust
Securities shall be cumulative and will accumulate whether or not there are
funds of the Trust available for the payment of Distributions. Distributions
shall accrue from February 5, 1997, and, except in the event (and to the extent)
that the Depositor exercises its right to defer the payment of interest on the
Junior Subordinated Debt Securities pursuant to the Indenture, shall be payable
semiannually in arrears on February 1 and August 1 of each year, commencing on
August 1, 1997. If any date on which a Distribution is otherwise payable is not
a Business Day, then the


                                      -17-
<PAGE>

payment of such Distribution shall be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), in each case with the same force and effect as if made on such date
(each date on which distributions are payable in accordance with this Section
4.01(a), a "Distribution Date"). Accrued Distributions that are not paid on the
applicable Distribution Date will bear interest on the amount thereof (to the
extent permitted by law) at the rate per annum of 9.58% thereof, compounded
semiannually from the relevant Distribution Date.

            (b) The Trust Securities represent undivided beneficial ownership
interests in the Trust Property, and, assuming payments of interest on the
Junior Subordinated Debt Securities are made when due (and before giving effect
to Additional Distributions, as defined below, if applicable), Distributions on
the Trust Securities shall be payable at a rate of 9.58% per annum of the
Liquidation Amount of the Trust Securities. The amount of Distributions payable
for any full period shall be computed on the basis of a 360-day year of twelve
30-day months. The amount of Distributions for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day year of twelve
30-day months. The amount of Distributions payable for any period shall include
the Additional Distributions, if any.

            (c) So long as no Debenture Event of Default has occurred and is
continuing, the Depositor has the right under the Indenture to defer the payment
of interest on the Junior Subordinated Debt Securities at any time and from time
to time for a period not exceeding 10 consecutive semiannual periods (an
"Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debt Securities. As a consequence of
any such deferral, semiannual Distributions on the Trust Securities by the Trust
will also be deferred (and the amount of Distributions to which Holders are
entitled will accumulate additional Distributions thereon at the rate of 9.58%
per annum, compounded semiannually) from the relevant payment date for such
Distributions, but not exceeding the interest rate then accruing on the Junior
Subordinated Debt Securities. In addition, in certain circumstances as provided
in the Registration Agreement, an additional amount will be payable, as
liquidated damages on the Junior Subordinated Debt Securities and as additional
distributions on the Trust Securities, respectively, at a rate of 0.25% per
annum of the Liquidation Amount. The aggregate amount of such additional amounts
payable with respect to the preceding sentence shall not exceed 0.25% per annum
(each type of increase in Distributions, described in this Section 4.01(c), an
"Additional Distribution").

            (d) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
available in the Payment Account for the payment of such Distributions.

            (e) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders of record as they appear on
the Securities Register for the Trust Securities on each January 15 and July 15.


                                      -18-
<PAGE>

            SECTION 4.02. Redemption. (a) On each Junior Subordinated Debt
Securities Redemption Date and on the Stated Maturity of the Junior Subordinated
Debt Securities, the Trust will be required to redeem a Like Amount of Trust
Securities at the applicable Redemption Price.

            (b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall identify the Trust Securities to be redeemed (including CUSIP
numbers) and shall state:

            (i) the Redemption Date;

            (ii) the applicable Redemption Price;

            (iii) if less than all the Outstanding Trust Securities are to be
      redeemed, the identification and the total Liquidation Amount of the
      particular Trust Securities to be redeemed; and

            (iv) that on the Redemption Date the Redemption Price will become
      due and payable upon each such Trust Security to be redeemed and that
      Distributions thereon will cease to accrue on and after said date.

            The Trust in issuing the Trust Securities may use "CUSIP", and/or
"private placement" numbers (if then generally in use), and, if so, the Property
Trustee shall indicate the "CUSIP" or "private placement" numbers of the Trust
Securities in notices of redemption and related materials as a convenience to
Securityholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the Trust
Securities or as contained in any notice of redemption and related material. The
Depositor shall promptly notify the Property Trustee of any change in such
numbers.

            (c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the applicable Redemption Price with the proceeds from the
contemporaneous redemption of Junior Subordinated Debt Securities. Redemptions
of the Trust Securities shall be made and the applicable Redemption Price shall
be payable on each Redemption Date only to the extent that the Trust has funds
then on hand and available in the Payment Account for the payment of such
Redemption Price.

            (d) If the Property Trustee gives a notice of redemption in respect
of any Trust Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.02(c), the Property Trustee will, so long
as the Capital Securities are in book-entry-only form, irrevocably deposit with
the Clearing Agency for the Capital Securities funds sufficient to pay the
applicable Redemption Price. With respect to Capital Securities held in
certificated form, the Property Trustee, subject to Section 4.02(c), will
irrevocably deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price to the


                                      -19-
<PAGE>

Holders thereof upon surrender of their Capital Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Securities
Register on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of Securityholders holding Trust
Securities so called for redemption will cease, except the right of such
Securityholders to receive the applicable Redemption Price and any Distribution
payable on or prior to the Redemption Date, but without interest, and such
Capital Securities will cease to be outstanding. In the event that any date on
which any applicable Redemption Price is payable is not a Business Day, then
payment of the applicable Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on such date. In the event that payment of the applicable Redemption Price in
respect of any Trust Securities called for redemption is improperly withheld or
refused and not paid either by the Trust or by the Depositor pursuant to the
Guarantee, Distributions on such Trust Securities will continue to accrue, at
the then applicable rate, from the Redemption Date originally established by the
Trust for such Trust Securities to the date such applicable Redemption Price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the applicable Redemption Price.

            (e) Payment of the applicable Redemption Price on, and any
distributions of Junior Subordinated Debt Securities to Holders of, the Trust
Securities shall be made to the Holders thereof as they appear on the Securities
Register on the relevant record date, and, with respect to Trust Securities held
in certificated form, upon surrender of such certificated Trust Securities to
the Paying Agent.

            (f) Subject to Section 4.03(a), if less than all the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Trust Securities. The
particular Trust Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Property Trustee from the Outstanding
Trust Securities not previously called for redemption, on a pro rata basis
(based upon Liquidation Amounts) or by such other method as the Property Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $1,000 or an integral multiple of $1,000 in
excess thereof) of the Liquidation Amount of Trust Securities of a denomination
larger than $1,000. The Property Trustee shall promptly notify the Security
Registrar in writing of the Trust Securities selected for redemption and, in the
case of any Trust Securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed. For all purposes of this Declaration of Trust,
unless the context otherwise requires, all provisions relating to the redemption
of Trust Securities shall relate in the case of any Trust Securities redeemed or
to be redeemed only in part, to the portion of the Liquidation Amount of Trust
Securities that has been or is to be redeemed.


                                      -20-
<PAGE>

            SECTION 4.03. Subordination of Common Securities. (a) Payment of
Distributions (including Additional Distributions, if applicable) on, and the
Redemption Price of the Trust Securities, as applicable, shall be made, subject
to Section 4.02(f), pro rata to the Holders of the Trust Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default or other Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Distributions,
if applicable) on, or Redemption Price of, any of the Common Securities, and no
other payment on account of the redemption, liquidation or other acquisition of
such Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions (including Additional Distributions, if
applicable) on all outstanding Capital Securities for all Distribution Dates
occurring on or prior thereto, or, in the case of payment of the applicable
Redemption Price, the full amount of such Redemption Price on all outstanding
Capital Securities, shall have been made or provided for, and all funds
immediately available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions (including Additional
Distributions, if applicable) on, or the Redemption Price of, Capital Securities
then due and payable.

            (b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any right to act with respect to any such Event of Default
under this Declaration of Trust until the effect of all such Events of Default
with respect to the Capital Securities have been cured, waived or otherwise
eliminated. Until all such Events of Default under this Declaration of Trust
with respect to the Capital Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Capital Securities and not on behalf of the Holder of the Common Securities,
and only the Holders of the Capital Securities will have the right to direct the
Property Trustee to act on their behalf.

            SECTION 4.04. Payment Procedures. In the event Definitive Capital
Securities Certificates are issued, payments of Distributions (including
Additional Distributions, if applicable) in respect of the Capital Securities
shall be made by check mailed to the address of the Person entitled thereto at
such address as shall appear on the Securities Register. If the Capital
Securities are held by a Clearing Agency, such Distributions shall be made to
the Clearing Agency in immediately available funds, which shall credit the
relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments in respect of the Common Securities shall be made
in such manner as shall be mutually agreed between the Property Trustee and the
Common Securityholder.

            SECTION 4.05. Tax Returns and Reports. The Administrative Trustees
shall prepare (or cause to be prepared), at the Depositor's expense, and file
all United States federal, state and local tax and information returns and
reports required to be filed by or in respect of the Trust. In this regard, the
Administrative Trustees shall (a) prepare and file (or cause to be prepared and
filed) the appropriate Internal Revenue Service form required to be filed in
respect of the Trust in each taxable year of the Trust and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
appropriate Internal Revenue


                                      -21-
<PAGE>

Service form required to be provided pursuant to the form referenced in clause
(a) hereof. The Administrative Trustees shall provide the Depositor and the
Property Trustee with a copy of all such returns and reports promptly after such
filing or furnishing. The Administrative Trustees shall comply with United
States federal withholding and backup withholding tax laws and information
reporting requirements with respect to any payments to Securityholders.

            SECTION 4.06. Payment of Taxes; Duties, etc. of the Trust. Pursuant
to Section 10.06 of the Indenture, the Depositor, as issuer of the Junior
Subordinated Debt Securities, has agreed to, and it shall, promptly pay any
taxes, duties or governmental charges of whatever nature imposed on the Trust
(but not including any taxes, duties or governmental charges imposed on Holders
including, without limitation, withholding taxes) by the United States or any
other taxing authority.

            SECTION 4.07. Payments Under Indenture. Any amount payable hereunder
to any Holder (and any Owner with respect thereto) shall be reduced by the
amount of any corresponding payment such Holder (and Owner) has directly
received pursuant to Section 5.08 of the Indenture.

                                    ARTICLE V

                          Trust Securities Certificates

            SECTION 5.01. Initial Ownership. Upon the formation of the Trust and
until the issuance of the Trust Securities, and at any time during which no
Trust Securities are outstanding, the Depositor shall be the sole beneficial
owner of the Trust.

            SECTION 5.02. Trust Securities Certificates. (a) The Capital
Securities Certificates shall be issued in blocks having minimum denominations
of $100,000 aggregate Liquidation Amount (100 Capital Securities) and integral
multiples of $1,000 in excess thereof, and the Common Securities Certificates
shall be issued in denominations of $1,000 Liquidation Amount and integral
multiples thereof. The Trust Securities Certificates shall be executed on behalf
of the Trust by the manual or facsimile signature of at least one Administrative
Trustee. Trust Securities Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefits of this Declaration of Trust, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior to
the delivery of such Trust Securities Certificates or did not hold such offices
at the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 5.04, 5.05 and 5.06.

            (b) Upon their original issuance, Capital Securities Certificates
representing Rule 144A Capital Securities shall be issued in the form of a
Global Capital Securities Certificate registered in the name of Cede & Co.
("Cede") as DTC's nominee and deposited with or on behalf of DTC for credit by
DTC to the respective accounts of the Owners thereof


                                      -22-
<PAGE>

(or such other accounts as they may direct). Except as set forth herein, record
ownership of the Global Capital Security may be transferred, in whole or in
part, only to another nominee of DTC or to a successor of DTC or its nominee.

            (c) Upon their original issuance, Capital Securities Certificates
representing Other Capital Securities shall be issued in definitive form and may
not be represented by the Global Security.

            (d) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.

            SECTION 5.03. Execution and Delivery of Trust Securities
Certificates. On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.04 and 2.05, to be executed on behalf of the Trust and delivered to
the Property Trustee and upon such delivery the Property Trustee shall
countersign such Trust Securities Certificates and deliver such Trust Securities
Certificates upon the written order of the Depositor, signed by its chairman of
the board and president, any executive vice president or any vice president,
treasurer or assistant treasurer or controller without further corporate action
by the Depositor, in authorized denominations.

            SECTION 5.04. Global Capital Security. (a) The Global Capital
Security issued under this Declaration of Trust shall be registered in the name
of Cede as nominee of the Clearing Agency and delivered to its custodian
therefor, and such Global Capital Security shall constitute a single Capital
Security for all purposes of this Declaration of Trust.

            (b) Notwithstanding any other provision in this Declaration of
Trust, the Global Capital Security may not be exchanged in whole or in part for
Capital Securities registered, and no transfer of the Global Capital Security in
whole or in part may be registered, in the name of any Person other than the
Clearing Agency for such Global Capital Security, Cede, or other nominee thereof
unless (i) such Clearing Agency advises the Property Trustee in writing that
such Clearing Agency is no longer willing or able to properly discharge its
responsibilities as Clearing Agency with respect to such Global Capital
Security, and the Depositor is unable to locate a qualified successor, (ii) the
Trust at its option advises DTC in writing that it elects to terminate the
book-entry system through the Clearing Agency, or (iii) there shall have
occurred and be continuing a Debenture Event of Default. In addition, beneficial
interests in a Global Capital Security may be exchanged by or on behalf of DTC
for certificated Capital Securities upon request by DTC, but only upon at least
20 days prior written notice given to the Property Trustee in accordance with
the Applicable Procedures.

            (c) If the Global Capital Security is to be exchanged for Other
Capital Securities or cancelled in whole, it shall be surrendered by or on
behalf of the Clearing Agency or its nominee to the Securities Registrar for
exchange or cancellation as provided in this Article V. If the Global Capital
Security is to be exchanged for Other Capital Securities or cancelled in part,
or if another Capital Security is to be exchanged in whole or in part for a
beneficial interest in the Global Capital Security, then either (i) such Global
Capital Security


                                      -23-
<PAGE>

shall be so surrendered for exchange or cancellation as provided in this Article
V or (ii) the Liquidation Amount thereof shall be reduced, subject to Section
5.02, or increased by an amount equal to the portion thereof to be so exchanged
or cancelled, or equal to the Liquidation Amount of such other Capital Security
to be so exchanged for a beneficial interest therein, as the case may be, by
means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Property Trustee, in accordance with the Applicable
Procedures, shall instruct the Clearing Agency or its authorized representative
to make a corresponding adjustment to its records. Upon any such surrender or
adjustment of the Global Capital Security by the Clearing Agency and Clearing
Agency Participants, accompanied by registration instructions executed by an
Administrative Trustee on behalf of the Trust and, to the extent required in
Section 5.05(c), a Restricted Capital Securities Certificate in a form
substantially similar to that attached hereto as Exhibit D, the Property Trustee
shall, subject to this Article V, countersign and deliver any executed Capital
Securities delivered to it issuable in exchange for such Global Capital Security
(or any portion thereof) in accordance with the instructions of the Clearing
Agency. The Property 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) The Clearing Agency or its nominee, as the registered owner of
the Global Capital Security, shall be considered the Holder of the Capital
Securities represented by the Global Capital Security for all purposes under
this Declaration of Trust and the Capital Securities, and the Owners shall hold
such interests pursuant to the Applicable Procedures and, except as otherwise
provided herein, shall not be entitled to have any of the individual Capital
Securities represented by the Global Capital Security registered in their names,
shall not receive nor be entitled to receive physical delivery of any such
Capital Securities in definitive form and shall not be considered the Holders
thereof under this Declaration of Trust. Accordingly, any such Owner's
beneficial interest in the Global Capital Security shall be shown only on, and
the transfer of such interest shall be effected only through, records maintained
by the Clearing Agency or its nominee. The Securities Registrar and the Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Declaration of Trust relating to the Global Capital Securities (including the
payment of the Liquidation Amount of and Distributions on the Global Capital
Securities and the giving of instructions or directions to Owners of Global
Capital Securities) as the sole Holder of Global Capital Securities and shall
have no obligations to the Owners thereof. Neither the Property Trustee nor the
Securities Registrar shall have any liability in respect of any transfers
effected by the Clearing Agency.

            (e) The rights of Owners of beneficial interests in the Global
Capital Security shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners and
the Clearing Agency.

            SECTION 5.05. Registration of Transfer and Exchange Generally;
Certain Transfers and Exchanges; Capital Securities Certificates; Securities Act
Legends. (a) The Property Trustee shall keep or cause to be kept at its
Corporate Trust Office a register or registers for the purpose of registering
Capital Securities Certificates and Common Securities


                                      -24-
<PAGE>

Certificates and transfers and exchanges of Capital Securities Certificates and
Common Securities Certificates in which the registrar and transfer agent with
respect to the Capital Securities (the "Securities Registrar"), subject to such
reasonable regulations as it may prescribe, shall provide for the registration
of Capital Securities Certificates and Common Securities Certificates (subject
to Section 5.11 in the case of Common Securities Certificates) and registration
of transfers and exchanges of Capital Securities Certificates and Common
Securities Certificates as herein provided. Such register is herein sometimes
referred to as the "Securities Register." The Property Trustee is hereby
appointed "Securities Registrar" for the purpose of registering Capital
Securities and transfers of Capital Securities as herein provided. The
provisions of Sections 8.01, 8.03 and 8.06 hereunder shall apply to the Property
Trustee also in its role as Securities Registrar.

            Upon surrender for registration of transfer of any Capital Security
at the offices or agencies of the Property Trustee designated for that purpose,
the Administrative Trustees shall execute, and the Property Trustee shall
countersign and deliver, in the name of the designated transferee or
transferees, one or more new Capital Securities of any authorized denominations
of like tenor and aggregate liquidation amount and bearing such restrictive
legends as may be required by this Declaration of Trust.

            At the option of the Holder, Capital Securities may be exchanged for
other Capital Securities of any authorized denominations, of like tenor and
aggregate Liquidation Amount and bearing such restrictive legends as may be
required by this Declaration of Trust, upon surrender of the Capital Securities
to be exchanged at such office or agency. Whenever any securities are so
surrendered for exchange, the Depositor shall execute and the Property Trustee
shall countersign and deliver the Capital Securities that the Holder making the
exchange is entitled to receive.

            All Capital Securities issued upon any registration of transfer or
exchange of Capital Securities shall be the valid obligations of the Trust,
entitled to the same benefits under this Declaration of Trust as the Capital
Securities surrendered upon such registration of transfer or exchange.

            Every Capital Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Property Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Property Trustee and the Securities Registrar, duly executed
by the Holder thereof or such Holder's attorney duly authorized in writing.

            No service charge shall be made to a Holder for any registration of
transfer or exchange of Capital Securities, but the Property Trustee or the
Securities Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any transfer or
exchange of Capital Securities.

            Neither the Trust nor the Property Trustee shall be required,
pursuant to the provisions of this Section, (i) to issue, register the transfer
of or exchange any Capital Security during a period beginning at the opening of
business 15 days before the day of mailing of a


                                      -25-
<PAGE>

notice of redemption of Capital Securities pursuant to Article IV and ending at
the close of business on the day of such mailing of the notice of redemption, or
(ii) to register the transfer of or exchange any Capital Security so selected
for redemption in whole or in part, except, in the case of any such Capital
Security to be redeemed in part, any portion thereof not to be redeemed.

            (b) Certain Transfers and Exchanges. Subject to Section 5.04(c), but
notwithstanding any other provision of this Declaration of Trust, transfers and
exchanges of Capital Securities and beneficial interests in a Global Capital
Security shall be made only in accordance with this Section 5.05(b) and Section
5.04(c).

            (i) Non-Global Capital Security to Global Security. If the Holder of
      a Restricted Capital Security (other than the Global Security) wishes at
      any time to transfer all or any portion of such Capital Security to a
      Person who wishes to take delivery thereof in the form of a beneficial
      interest in the Global Security, such transfer may be effected only in
      accordance with the provisions of this Clause (b)(i) and subject to the
      Applicable Procedures. Upon receipt by the Securities Registrar of (A)
      such Capital Security as provided in Section 5.05(a) and instructions
      satisfactory to the Securities Registrar directing that a beneficial
      interest in the Global Security in a specified Liquidation Amount not
      greater than the Liquidation Amount of such Capital Security to be
      credited to a specified Clearing Agency Participant's account and (B) a
      Capital Securities Certificate duly executed by such Holder or such
      Holder's attorney duly authorized in writing, then the Securities
      Registrar shall cancel such Capital Security (and issue a new Capital
      Security in respect of any untransferred portion thereof) as provided in
      Section 5.01(a) and increase the aggregate Liquidation Amount of the
      Global Capital Security by the specified Liquidation Amount as provided in
      Section 5.04(c).

            (ii) Non-Global Security to Non-Global Security. A Capital Security
      that is not a Global Capital Security may be transferred, in whole or in
      part, to a Person who takes delivery in the form of another Capital
      Security that is not a Global Security as provided in Section 5.05(a),
      provided that if the Capital Security to be transferred in whole or in
      part is a Restricted Capital Security, the Securities Registrar shall have
      received a Restricted Capital Securities Certificate duly executed by the
      transferor Holder or such Holder's attorney duly authorized in writing.

            (iii) Exchanges Between Global Capital Security and Non-Global
      Capital Security. A beneficial interest in the Global Capital Security may
      be exchanged for a Capital Security that is not a Global Capital Security
      as provided in Section 5.04.

            (iv) Limitations Relating to Liquidation Amount. Notwithstanding any
      other provision of this Declaration of Trust and unless otherwise
      specified as permitted by this Declaration of Trust, Capital Securities or
      portions thereof may be transferred or exchanged only in blocks having
      aggregate Liquidation Amounts of not less than $100,000. Any transfer,
      exchange or other disposition of Capital Securities in


                                      -26-
<PAGE>

      contravention of this Section 5.05(b)(iv) shall be deemed to be void and
      of no legal effect whatsoever, any such transferee shall be deemed not to
      be the Holder or Owner of any beneficial interest in 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.

            (c) Restricted Securities Legend. (i) Except as set forth in this
Section 5.05(c), all Capital Securities shall bear a Restricted Capital
Securities Legend substantially in the following form:

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
            LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
            MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
            OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS
            SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
            REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY
            ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
            SUCH SECURITY PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER
            OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH U.S.B.
            HOLDING CO., INC. (THE "CORPORATION") OR ANY AFFILIATE OF THE
            CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
            THIS SECURITY) (THE "RESALE RESTRICTIONS TERMINATION DATE") ONLY (A)
            TO THE CORPORATION, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
            STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
            SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
            SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS
            A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
            PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
            INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
            BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL
            "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1),
            (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT ACQUIRING THE
            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 (E) PURSUANT TO
            ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
            THE SECURITIES ACT, SUBJECT TO THE TRUST'S AND THE PROPERTY


                                      -27-
<PAGE>

            TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
            TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
            COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
            OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH
            MAY BE OBTAINED FROM THE CORPORATION OR THE PROPERTY TRUSTEE. THIS
            LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
            RESTRICTIONS TERMINATION DATE.

            (ii) Subject to the following paragraphs of this Section 5.05(c), a
      new Capital Security (other than a Global Capital Security) that does not
      bear a Restricted Capital Securities Legend may be issued in exchange for
      or in lieu of a Restricted Capital Security or any portion thereof that
      bears such a legend if, in the Depositor's judgment, placing such a legend
      upon such new Capital Security is not necessary to ensure compliance with
      the registration requirements of the Securities Act, and the Property
      Trustee, at the written direction of the Trust in the form of an Officers'
      Certificate, shall countersign and deliver such a new Capital Security as
      provided in this Article V.

            (iii) Notwithstanding the foregoing provisions of this Section
      5.05(c), a successor Capital Security of a Capital Security that does not
      bear a Restricted Capital Securities Legend shall not bear such form of
      legend unless the Depositor has reasonable cause to believe that such
      successor Capital Security is a "restricted security" within the meaning
      of Rule 144 under the Securities Act, in which case the Property Trustee,
      at the written direction of the Trust in the form of an Officers'
      Certificate, shall countersign and deliver a new Capital Security bearing
      a Restricted Capital Securities Legend in exchange for such Successor
      Capital Security as provided in this Article V.

            (iv) Upon any sale or registration of transfer of a Restricted
      Capital Security (including any Restricted Capital Security represented by
      a Global Capital Security) pursuant to an effective registration statement
      under the Securities Act or pursuant to Rule 144 under the Securities Act
      after such registration ceases to be effective: (A) in the case of any
      Restricted Capital Security that is a definitive Capital Security, the
      Securities Registrar shall permit the Holder thereof to exchange such
      Restricted Capital Security for a definitive Capital Security that does
      not bear the Restricted Securities Legend and rescind any restriction on
      the transfer of such Restricted Capital Security; and (B) in the case of
      any Restricted Capital Security that is represented by a Global Capital
      Security, the Securities Registrar shall permit the Holder of such Global
      Capital Security to exchange such Global Capital Security for another
      Global Capital Security that does not bear the Restricted Securities
      Legend.

            (v) If Restricted Capital Securities are being presented or
      surrendered for registration of transfer or exchange then there shall be
      (if so required by the Property


                                      -28-
<PAGE>

      Trustee), (A) if such Restricted Capital Securities are being delivered to
      the Securities Registrar by a Holder for registration in the name of such
      Holder, without transfer, a certification from such Holder to that effect;
      or (B) if such Restricted Capital Securities are being transferred, (i) a
      certification from the transferor in a form substantially similar to that
      attached hereto as Exhibit D, and (ii) if the Trust or Securities
      Registrar so requests, evidence reasonably satisfactory to them as to the
      compliance with the restrictions set forth in the Restricted Capital
      Securities Legend.

            (d) Exchange Offer. The Initial Capital Securities may be exchanged
for Exchange Capital Securities (as defined in the Indenture) pursuant to the
terms set forth in the Registration Agreement and Article XII of the Indenture
(the "Exchange Offer"). The Property Trustee shall make the exchange as follows:

            The Depositor shall present the Property Trustee with an Officers'
Certificate certifying the following:

            (i)   upon issuance of the Exchange Capital Securities, the
                  transactions contemplated by the Exchange Offer have been
                  consummated; and

            (ii)  the number of Initial Capital Securities properly tendered in
                  the Exchange Offer that are represented by a Global Capital
                  Security and the number of Initial Capital Securities properly
                  tendered in the Exchange Offer that are represented by Other
                  Capital Securities, the name of such Holder of such Other
                  Capital Securities, the liquidation amount of Initial Capital
                  Securities properly tendered in the Exchange Offer by each
                  such Holder and the name and address to which Other Capital
                  Securities for Exchange Capital Securities shall be registered
                  and sent for each such Holder.

            The Property Trustee, upon receipt of (i) such Officers'
Certificate, (ii) an Opinion of Counsel (x) to the effect that the Exchange
Capital Securities have been registered under Section 5 of the Securities Act
and the Indenture, Declaration of Trust and Guarantee have been qualified under
the Trust Indenture Act and (y) with respect to the matters set forth in Section
4(s) of the Registration Agreement and (iii) a written order of the Depositor
shall authenticate (A) a Global Capital Security for Exchange Capital Securities
in aggregate Liquidation Amount equal to the aggregate Liquidation Amount of
Initial Capital Securities represented by a Global Capital Security indicated in
such Officers' Certificate as having been properly tendered and (B) Capital
Securities Certificates representing Exchange Capital Securities registered in
the names of, and in the Liquidation Amounts indicated in such Officers'
Certificate.

            If, upon consummation of the Exchange Offer, less than all the
outstanding Initial Capital Securities shall have been properly tendered and not
withdrawn, the Property Trustee shall make an endorsement on the Global Capital
Security for Capital Securities indicating that reduction in the number and
aggregate Liquidation Amount represented thereby as a result of the Exchange
Offer.


                                      -29-
<PAGE>

            The Trust shall deliver such Capital Securities Certificates for
Exchange Capital Securities to the Holders thereof as indicated in such
Officers' Certificate.

            SECTION 5.06. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. Provided Definitive Capital Securities Certificates are issued, if
(a) any mutilated Trust Securities Certificate shall be surrendered to the
Securities Registrar, or if the Securities Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of the Trustees harmless, then in the absence of notice that such
Trust Securities Certificate shall have been acquired by a bona fide purchaser,
the Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection with
the issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustees or the Securities Registrar 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 Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial interest in the assets of the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Trust Securities Certificate shall be found
at any time.

            SECTION 5.07. Persons Deemed Securityholders. The Trustees or the
Securities Registrar shall treat the Person in whose name any Trust Securities
are issued as the owner of such Trust Securities for the purpose of receiving
distributions and for all other purposes whatsoever, and neither the Trustees
nor the Securities Registrar shall be bound by any notice to the contrary.

            SECTION 5.08. Access to List of Securityholders' Names and
Addresses. Each Holder or Owner of Trust Securities acknowledges that the
Depositor, the Property Trustee, the Delaware Trustee or the Administrative
Trustees may from time to time make reasonable use of information consisting of
such Holder's or Owner's name and address, including the furnishing of a list of
such names and addresses as contemplated hereunder, and each Owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.

            SECTION 5.09. Maintenance of Office or Agency. The Administrative
Trustees shall maintain an office or offices or agency or agencies where
Definitive Capital Securities Certificates, if issued, may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustees in respect of the Trust Securities may be served. The
Administrative Trustees initially designate the Corporate Trust Office of the
Property Trustee as its office for such purposes. The Administrative Trustees
shall give prompt written notice to the Depositor and to the Securityholders of
any change in the location of the Securities Register or any such office or
agency.


                                      -30-
<PAGE>

            SECTION 5.10. Appointment of Paying Agent. The Paying Agent shall
make Distributions to Securityholders from the Payment Account and shall report
the amounts of such Distributions to the Property Trustee and the Administrative
Trustees. Any Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making the Distributions referred to
above. The Administrative Trustees may revoke such power and remove any Paying
Agent if such Administrative Trustees determine in their sole discretion that
such Paying Agent shall have failed to perform its obligations under this
Declaration of Trust in any material respect. The Paying Agent shall initially
be the Property Trustee , and any co-paying agent chosen by the Property
Trustee, and acceptable to the Administrative Trustees and the Depositor. Any
Person acting as Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Property Trustee shall no longer be the
Paying Agent or a successor Paying Agent shall resign or its authority to act be
revoked, the Administrative Trustees shall appoint a successor that is
acceptable to the Property Trustee and the Depositor to act as Paying Agent
(which shall be a bank or trust company). The Administrative Trustees shall
cause such successor Paying Agent or any additional Paying Agent appointed by
the Administrative Trustees to execute and deliver to the Trustees an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Securityholders in trust for the benefit of the Securityholders entitled thereto
until such sums shall be paid to such Securityholders. The Paying Agent shall
return all unclaimed funds to the Property Trustee and upon removal of a Paying
Agent such Paying Agent shall also return all funds in its possession to the
Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 herein shall
apply to the Property Trustee also in its role as Paying Agent, for so long as
the Property Trustee shall act as Paying Agent and, to the extent applicable, to
any other paying agent appointed hereunder. Any reference in this Declaration of
Trust to the Paying Agent shall include any co-paying agent unless the context
requires otherwise.

            SECTION 5.11. Ownership of Common Securities by Depositor. For so
long as the Trust Securities remain outstanding, the Depositor will covenant (i)
to maintain 100% direct or indirect ownership of the Common Securities;
provided, however, that any permitted successor of the Depositor under the
Indenture may succeed to the Depositor's ownership of the Common Securities,
(ii) not to cause, as Depositor of the Trust, or to permit, as holder of the
Common Securities, the dissolution, winding-up or termination of the Trust,
except in connection with a distribution of the Junior Subordinated Debt
Securities as provided in this Declaration of Trust and in connection with
certain mergers, consolidations or amalgamations, each as permitted by this
Declaration of Trust, and (iii) to use its reasonable efforts to cause the Trust
to (a) remain a business trust, except in connection with the distribution of
Junior Subordinated Debt Securities to the Holders of Trust Securities in the
liquidation of the Trust, the redemption of all of the Trust Securities of the
Trust, or certain mergers, consolidations, amalgamations, each as permitted by
this Declaration of Trust, and (b) otherwise continue to be classified as a
grantor trust for United States federal income tax purposes.


                                      -31-
<PAGE>

            SECTION 5.12. Notices to Clearing Agency. To the extent that a
notice or other communication to the Owners is required under this Declaration
of Trust, for so long as Capital Securities are represented by a Global
Securities Certificate, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to give duplicates thereof to the Owners.

            SECTION 5.13. Rights of Securityholders. (a) The legal title to the
Trust Property is vested exclusively in the Property Trustee (in its capacity as
such) in accordance with Section 2.09, and the Securityholders shall not have
any right or title therein other than the undivided beneficial ownership
interest in the assets of the Trust conferred by their Trust 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 Trust Securities shall be
personal property giving only the rights specifically set forth therein and in
this Declaration of Trust. The Trust Securities shall have no preemptive or
singular rights and when issued and delivered to Securityholders against payment
of the purchase price therefor will be fully paid and nonassessable. The
Holders, in their capacities as such, 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.

            (b) For so long as any Capital Securities remain Outstanding, if,
upon a Debenture Event of Default, the Debenture Trustee fails or the holders of
not less than 25% in liquidation amount of the outstanding Junior Subordinated
Debt Securities fail to declare the principal amount of all of the Junior
Subordinated Debt Securities to be immediately due and payable, the Holders of
at least 25% in Liquidation Amount of the Capital Securities then Outstanding
shall have such right by a notice in writing to the Depositor and the Debenture
Trustee with a copy to the Property Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Junior Subordinated
Debt Securities shall become immediately due and payable; provided that the
payment of principal and interest on such Junior Subordinated Debt Securities
shall remain subordinated to the extent provided in the Indenture.

            At any time after such a declaration of acceleration with respect to
the Junior Subordinated Debt Securities 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, the Holders of a majority in Liquidation Amount of
the Capital Securities, by written notice to the Property Trustee, the Depositor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:

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

                  (A) all overdue installments of interest (including any
            Additional Interest (as defined in the Indenture)) on all of the
            Junior Subordinated Debt Securities,


                                      -32-
<PAGE>

                  (B) the principal of (and premium, if any, on) any Junior
            Subordinated Debt Securities which have become due otherwise than by
            such declaration of acceleration and interest thereon at the rate
            borne by the Junior Subordinated Debt Securities, and

                  (C) 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 Property
            Trustee, their agents and counsel, and all other amounts due to the
            Debenture Trustee under the Indenture and the Property Trustee
            pursuant to Section 8.06 hereof; and

            (ii) all Events of Default with respect to the Junior Subordinated
      Debt Securities, other than the non-payment of the principal of the Junior
      Subordinated Debt Securities which has become due solely by such
      acceleration, have been cured or waived as provided in Section 5.13 of the
      Indenture.

            If the Property Trustee fails to annul any such declaration and
waive such default, the Holders of Capital Securities representing a majority in
aggregate Liquidation Amount of all the Outstanding Capital Securities shall
also have the right to rescind and annul such declaration and its consequences
by written notice to the Depositor, the Property Trustee and the Debenture
Trustee, subject to the satisfaction of the conditions set forth in Clause (i)
and (ii) of this Section 5.13(b).

            The Holders of a majority in aggregate Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Capital Securities,
waive any past default under the Indenture, except a default in the payment of
principal or interest (unless such 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 in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each Junior Subordinated Debt
Securities. No such rescission shall affect any subsequent default or impair any
right consequent thereon.

            Upon receipt by the Property Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of the
Capital Securities all or part of which is represented by Global 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 Property 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
acclamation 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 which 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,


                                      -33-
<PAGE>

after expiration of such 90 day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice which 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 5.13(b).

            (c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Declaration of
Trust and the Indenture, upon a Debenture Event of Default specified in Section
5.01(l) or 5.01(2) of the Indenture, any Holder of Capital Securities shall have
the right to institute a proceeding directly against the Depositor, pursuant to
Section 5.08 of the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Junior Subordinated Debt Securities having a
principal amount equal to the Liquidation Amount of the Capital Securities of
such Holder (a "Direct Action"). Except as set forth in Sections 5.13(b) and
5.13(c), the Holders of Capital Securities shall have no right to exercise
directly any right or remedy available to the holders of, or in respect of, the
Junior Subordinated Debt Securities.

            (d) A Securityholder may institute a legal proceeding directly
against the Guarantor under the Guarantee to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust or any
person or entity.

                                   ARTICLE VI

                    Acts of Securityholders; Meetings; Voting

            SECTION 6.01. Limitations on Capital Securityholder's Voting Rights.
(a) Except as provided in this Declaration of Trust and in the Indenture and as
otherwise required by law, no Holder of Capital Securities shall have any right
to vote or in any manner otherwise control the administration, operation and
management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the Holders of Capital Securities
from time to time as partners or members of an association. Unless a Debenture
Event of Default shall have occurred and be continuing, any Trustee may be
removed at any time by the vote of the Common Securityholder. The right to vote
to appoint, remove or replace the Administrative Trustees is vested exclusively
in the Depositor as the Holder of the Common Securities.

            (b) So long as any Junior Subordinated Debt Securities are held by
the Property Trustee, the Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Property Trustee with
respect to such Junior Subordinated Debt Securities, (ii) waive any past default
which is waivable under Section 5.13 of the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Junior
Subordinated Debt Securities shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Junior
Subordinated Debt Securities, where such consent shall be required, without, in
each case, obtaining the prior approval of the


                                      -34-
<PAGE>

Holders of at least a majority in aggregate Liquidation Amount of all
Outstanding Capital Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of Junior Subordinated
Debt Securities affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Capital Securities.
The Trustees shall not revoke any action previously authorized or approved by a
vote of the Holders of Capital Securities, except by a subsequent vote of the
Holders of Capital Securities. In addition to obtaining the foregoing approvals
of the Holders of the Capital Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will not
fail to be classified as a grantor trust for United States federal income tax
purposes on account of such action.

            (c) If any proposed amendment to the Declaration of Trust provides
for, or the Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the interests, powers, preferences or
special rights of the Trust Securities, whether by way of amendment to the
Declaration of Trust or otherwise, or (ii) the dissolution, winding-up or
termination of the Trust, other than pursuant to the terms of this Declaration
of Trust, then the Holders of Outstanding Trust Securities as a class will be
entitled to vote on such amendment or proposal.

            SECTION 6.02. Notice of Meetings. Notice of all meetings of the
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Property Trustee pursuant to Section 10.09 to each Securityholder
of record, at his registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.

            SECTION 6.03. Meetings of Securityholders. (a) No annual meeting of
Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Securityholders of record of 25% of the Securities (based upon
their Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of Securityholders
to vote on any matters as to which Securityholders are entitled to vote.

            (b) Securityholders of record of 50% of the Outstanding Securities
(based upon their Liquidation Amount), present in person or represented by
proxy, shall constitute a quorum at any meeting of Securityholders.

            (c) If a quorum is present at a meeting, an affirmative vote by the
Securityholders of record present, in person or by proxy, holding more than a
majority of the Securities (based upon their Liquidation Amount) held by the
Securityholders of record present, either in person or by proxy, at such meeting
shall constitute the action of the


                                      -35-
<PAGE>

Securityholders, unless this Declaration of Trust requires a greater number of
affirmative votes.

            SECTION 6.04. Voting Rights. Securityholders shall be entitled to
one vote for each $1,000 of Liquidation Amount represented by their outstanding
Trust Securities in respect of any matter as to which such Securityholders are
entitled to vote.

            SECTION 6.05. Proxies, etc. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy; provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Securityholders of record shall be entitled to vote. When Trust Securities are
held jointly by several Persons, any one of them may vote at any meeting in
person or by proxy in respect of such Securities, but the proxy card shall be
signed by all of the Holders, unless explicitly agreed to the contrary. A proxy
purporting to be executed by or on behalf of a Securityholder shall be deemed
valid unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. No proxy shall be valid more than three
years after its date of execution.

            SECTION 6.06. Securityholder Action by Written Consent. Any action
which may be taken by Securityholders at a meeting may be taken without a
meeting if Securityholders holding more than a majority of all Outstanding
Securities (based upon their Liquidation Amount) entitled to vote in respect of
such action (or such larger proportion thereof as shall be required by any
express provision of this Declaration of Trust) shall consent to the action in
writing.

            SECTION 6.07. Record Date for Voting and Other Purposes. For the
purposes of determining the Securityholders who are entitled to notice of and to
vote at any meeting or by written consent, or to participate in any Distribution
in respect of which a record date is not otherwise provided for in this
Declaration of Trust, or for the purpose of any other action, the Administrative
Trustees may from time to time fix a date, not more than 90 days prior to the
date of any meeting of Securityholders or the payment of a distribution or other
action, as the case may be, as a record date for the determination of the
identity of the Securityholders of record for such purposes.

            SECTION 6.08. Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Declaration of Trust to be given, made or taken by
Securityholders or Owners may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders or
Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as


                                      -36-
<PAGE>

the "Act" of the Securityholders or Owners signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Declaration of Trust and (subject to Section 8.01) conclusive in favor of the
Trustees, if made in the manner provided in this Section 6.08.

            The fact and date of the execution by any Person of any such
instrument or writing may be provided by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.

            The ownership of Trust Securities shall be proved by the Securities
Registrar.

            Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Securityholder of any Trust Security shall bind every
future Securityholder of the same Trust Security and the Securityholder of every
Trust Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.

            Without limiting the foregoing, a Securityholder entitled hereunder
to take any action hereunder with regard to any particular Trust Security may do
so with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such Liquidation
Amount.

            If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.

            A Holder may institute a legal proceeding directly against the
Depositor under the Guarantee Agreement to enforce its rights under the
Guarantee Agreement without first instituting a legal proceeding against the
Guarantee Trustee (as defined in the Guarantee Agreement), the Trust, any
Trustee or any other Person.

            SECTION 6.09. Inspection of Records. Upon reasonable notice to the
Administrative Trustees and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.


                                      -37-
<PAGE>

                                   ARTICLE VII

                         Representations and Warranties

            SECTION 7.01. Representations and Warranties of the Property
Trustee. The Property Trustee hereby represents and warrants for the benefit of
the Depositor and the Securityholders that:

            (a) The Property Trustee is a banking corporation with trust powers,
      duly organized, validly existing and in good standing under the laws of
      New York, with trust power and authority to execute and deliver, and to
      carry out and perform its obligations under the terms of this Declaration
      of Trust.

            (b) The execution, delivery and performance by the Property Trustee
      of this Declaration of Trust has been duly authorized by all necessary
      corporate action on the part of the Property Trustee; and this Declaration
      of Trust has been duly executed and delivered by the Property Trustee, and
      constitutes a legal, valid and binding obligation of the Property 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 the enforcement of
      such remedies is considered in a proceeding in equity or at law).

            (c) The execution, delivery and performance of this Declaration of
      Trust by the Property Trustee does not conflict with or constitute a
      breach of the certificate of incorporation or by-laws of the Property
      Trustee.

            (d) At the Closing Date, the Property Trustee has not knowingly
      created any liens or encumbrances on such Trust Securities.

            (e) No consent, approval or authorization of, or registration with
      or notice to, any New York State or federal banking authority is required
      for the execution, delivery or performance by the Property Trustee, of
      this Declaration of Trust.

            SECTION  7.02.  Representations  and  Warranties  of the Delaware
Trustee.  The Delaware Trustee hereby  represents and warrants for the benefit
of the Depositor and the Securityholders that:

            (a) The Delaware Trustee is duly organized, validly existing and in
      good standing 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 of Trust.

            (b) The execution, delivery and performance by the Delaware Trustee
      of this Declaration of Trust has been duly authorized by all necessary
      corporate action on the part of the Delaware Trustee; and this Declaration
      of Trust has been duly executed


                                      -38-
<PAGE>

      and delivered by the Delaware Trustee, and 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' right generally and to general principles of equity and the
      discretion of the court regardless of whether the enforcement of such
      remedies is considered in a proceeding in equity or at law.

            (c) The execution, delivery and performance of this Declaration of
      Trust by the Delaware Trustee does not conflict with or constitute a
      breach of the certificate of incorporation or by-laws of the Delaware
      Trustee.

            (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 Delaware Trustee of this
      Declaration of Trust.

            (e) The Delaware Trustee is an entity which has its principal place
      of business in the State of Delaware.

            SECTION 7.03. Representations and Warranties of Depositor. The
Depositor hereby represents and warrants for the benefit of the Securityholders
that the Trust Securities Certificates issued at the Closing Date on behalf of
the Trust have been duly authorized and will have been duly and validly
executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Declaration of
Trust, and the Securityholders will be, as of each such date, entitled to the
benefits of this Declaration of Trust.

                                  ARTICLE VIII

                                  The Trustees

            SECTION 8.01. Certain Duties and Responsibilities. (a) The duties
and responsibilities of the Trustees shall be as provided by this Declaration of
Trust and, in the case of the Property Trustee, by the Trust Indenture Act;
provided, however, that the Property Trustee shall not be subject to the
provisions of the Trust Indenture Act until such time as this Declaration of
Trust becomes qualified under the Trust Indenture Act upon the effectiveness of
a registration statement pursuant to the Registration Agreement. Notwithstanding
the foregoing, no provisions of this Declaration of Trust shall require the
Trustees 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 they shall have reasonable grounds
for believing that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not reasonably assured to it. Whether or not
herein expressly so provided, every provision of this Declaration of Trust
relating to the conduct or affecting the liability of or affording protection to
the Trustees shall be subject to the provisions of this Article. Nothing in this
Declaration of Trust shall be construed to release an Administrative Trustee
from liability for his own grossly negligent action, his own grossly negligent
failure to


                                      -39-
<PAGE>

act, or his own willful misconduct. To the extent that, at law or in equity, an
Administrative Trustee has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to the Securityholders, such Administrative
Trustee shall not be liable to the Trust or to any Securityholder for such
Trustee's good faith reliance on the provisions of this Declaration of Trust.
The provisions of this Declaration of Trust, to the extent that they restrict
the duties and liabilities of the Administrative Trustees otherwise existing at
law or in equity, are agreed by the Depositor and the Securityholders to replace
such other duties and liabilities of the Administrative Trustees.

            (b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust 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 Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust 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 are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.01(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Declaration of Trust or, in the case of the Property Trustee,
in the Trust Indenture Act, if applicable.

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

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

            (ii) the Property 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 Trust Securities relating to the time, method and place of
      conducting any proceeding for any remedy available to the Property
      Trustee, or exercising any trust or power conferred upon the Property
      Trustee under this Declaration of Trust;

            (iii) the Property Trustee's sole duty with respect to the custody,
      safe keeping and physical preservation of the Junior Subordinated Debt
      Securities and the Payment Account shall be to deal with such Property in
      a similar manner as the Property Trustee deals with similar property for
      its own account, subject to the projections and limitations on liability
      afforded to the Property Trustee under this Declaration of Trust and the
      Trust Indenture Act;

            (iv) the Property Trustee shall not be liable for any interest on
      any money received by it except as it may otherwise agree in writing with
      the Depositor; and money held by the Property Trustee need not be
      segregated from other funds held by it


                                      -40-
<PAGE>

      except in relation to the Payment Account maintained by the Property
      Trustee pursuant to Section 3.01 and except to the extent otherwise
      required by law; and

            (v) the Property Trustee shall not be responsible for monitoring the
      compliance by the Administrative Trustees or the Depositor with their
      respective duties under this Declaration of Trust nor shall the Property
      Trustee be liable for the default or misconduct of the Administrative
      Trustees or the Depositor.

            SECTION 8.02. Events of Default Notices; Deferral of Interest
Payment Notices. Within 10 Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Property Trustee, the
Property Trustee shall transmit, in the manner and to the extent provided in
Section 10.09, notice of such Event of Default to the Securityholders, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest
(including any interest) on the Trust Security, the Property Trustee shall be
fully protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Property Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of Securities; and
provided, further, however, that, in the case of any default of the character
specified in Section 5.01(3) of the Indenture, no such notice to Holders of
Securities shall be given until at least 30 days after the occurrence thereof.
For the purpose of this Section 8.02, the term "default" means any event which
is, or after notice or lapse of time or both would become, an Event of Default
with respect to the Securities.

            Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Junior
Subordinated Debt Securities pursuant to the Indenture, the Administrative
Trustee shall transmit, in the manner and to the extent provided in Section
10.09, notice of such exercise to the Securityholders and the Property Trustee,
unless such exercise shall have been revoked.

            The Property Trustee shall notify all Holders of the Capital
Securities of any notice of default received from the Debenture Trustee with
respect to the Junior Subordinated Debt Securities. The Depositor and the
Administrative Trustees are required to file within 60 days of each December 31
of each calendar year commencing December 31, 1997 with the Property Trustee a
certificate as to whether or not they are in compliance with all the conditions
and covenants applicable to them under this Declaration of Trust.

            SECTION 8.03. Certain Rights of Property Trustee. Subject to the
provisions of Section 8.01:

            (a) the Property Trustee may conclusively rely and shall be fully
      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, consent, order,
      appraisal, bond, debenture, note, other evidence of indebtedness or


                                      -41-
<PAGE>

      other paper or document believed by it to be genuine and to have been
      signed or presented by the proper party or parties;

            (b) if (i) in performing its duties under this Declaration of Trust
      the Property Trustee is required to decide between alternative courses of
      action or (ii) in construing any of the provisions of this Declaration of
      Trust the Property Trustee finds the same ambiguous or inconsistent with
      any other provisions contained herein or (iii) the Property Trustee is
      unsure of the application of any Provision of this Declaration of Trust,
      then, except as to any matter as to which the Securityholders are entitled
      to vote under the terms of this Declaration of Trust, the Property Trustee
      shall deliver a notice to the Depositor requesting written instructions of
      the Depositor as to the course of action to be taken and the Property
      Trustee shall take such action, or refrain from taking such action, as the
      Property Trustee shall be instructed in writing to take, or to refrain
      from taking, by the Depositor; provided, however, that if the Property
      Trustee does not receive such instructions of the Depositor within ten
      Business Days after it has delivered such notice, or such reasonably
      shorter period of time set forth in such notice (which to the extent
      practicable shall not be less than two Business Days), it may, but shall
      be under no duty to, take or refrain from taking such action not
      inconsistent with this Declaration of Trust as it shall deem advisable and
      in the best interests of the Securityholders, in which event the Property
      Trustee shall have no liability except for its own bad faith, negligence
      or willful misconduct;

            (c) any direction or act of the Depositor or the Administrative
      Trustee contemplated by this Declaration of Trust shall be sufficiently
      evidenced by an Officers' Certificate;

            (d) whenever in the administration of this Declaration of Trust, the
      Property Trustee shall deem it desirable that a matter be established
      before undertaking, suffering or omitting any action hereunder, the
      Property Trustee (unless other evidence is herein specifically prescribed)
      may, in the absence of bad faith on its part, request and conclusively
      rely upon an Officers' Certificate which, upon receipt of such request,
      shall be promptly delivered by the Depositor or the Administrative
      Trustees (which Officers' Certificate will be evidence only for purposes
      of determining entitlement to indemnification of the Property Trustee from
      the Depositor but not with respect to any liability to Securityholders);

            (e) the Property 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 Property Trustee may consult with counsel of its selection
      (which counsel may be counsel to the Depositor or any of its Affiliates,
      and may include any of its employees) 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


                                      -42-
<PAGE>

      Property Trustee shall have the right at any time to seek instructions
      concerning the administration of this Declaration of Trust from any court
      of competent jurisdiction;

            (g) the Property Trustee shall be under no obligation to exercise
      any of the rights or powers vested in it by this Declaration of Trust at
      the request or direction of any of the Securityholders pursuant to this
      Declaration of Trust, unless such Securityholders shall have offered to
      the Property Trustee security or indemnity satisfactory to it against the
      costs, expenses and liabilities which might be incurred by it in
      compliance with such request or direction;

            (h) the Property 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 Securityholders, but the Property Trustee may make such
      further inquiry or investigation into such facts or matters as it may see
      fit;

            (i) the Property Trustee may execute any of its trusts or powers
      hereunder or perform any of its duties hereunder either directly or by or
      through its agents or attorneys, and the Property 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 by it with due care
      hereunder;

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

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

            (1) when the Property 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; and

             (m) the Property Trustee shall not be charged with knowledge of an
      Event of Default unless a Responsible Officer of the Property Trustee
      obtains actual knowledge


                                      -43-
<PAGE>

      of such event or the Property Trustee receives written notice of such
      event from Securityholders holding at least 25% of the Outstanding Trust
      Securities (based upon Liquidation Amount).

            No provision of this Declaration of Trust shall be deemed to impose
any duty or obligation on the Property 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 Property 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 Property Trustee
shall be construed to be a duty.

            SECTION 8.04. Not Responsible for Recitals. The recitals contained
herein and in the Trust Securities Certificates shall be taken as the statements
of Trust, and the Trustees do not assume any responsibility for their
correctness. The Trustees shall not be accountable for the use or application by
the Depositor of the proceeds of the Junior Subordinated Debt Securities.

            SECTION 8.05. May Hold Securities. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any other
agent of any Trustee or the Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and, subject to Sections 8.08
and 8.13, may otherwise deal with the Trust with the same rights it would if it
were not a Trustee or such other agent.

            SECTION 8.06. Compensation, Indemnity, Fees. Pursuant to Section
10.02 of the Indenture, the Depositor, as issuer of the Junior Subordinated Debt
Securities, agrees:

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

            (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 of Trust (including the reasonable compensation and
      the expenses and disbursements of its agents and counsel), except any such
      expense, disbursement or advance as may be attributable to its negligence
      or willful misconduct;

            (c) to the fullest extent permitted by applicable law, to indemnify
      and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee,
      (iii) any officer, director, shareholder, employee, representative or
      agent of any Trustee, and (iv) any employee or agent of the Trust or its
      Affiliates (referred to herein as an "Indemnified Person") from and
      against any loss, damage, liability, tax, penalty, expense or claim of any
      kind or nature whatsoever incurred by such Indemnified Person by reason of
      the creation, operation or termination of the Trust or any act or omission
      performed or omitted by such Indemnified Person in good faith on behalf of
      the Trust and in a manner such


                                      -44-
<PAGE>

      Indemnified Person reasonably believed to be within the scope of authority
      conferred on such Indemnified Person by this Declaration of Trust, except
      that no Indemnified Person shall be entitled to be indemnified in respect
      of any loss, damage or claim incurred by such Indemnified Person by reason
      of such Indemnified Person's negligence or willful misconduct with respect
      to such acts or omissions; and

            (d) to the fullest extent permitted by applicable law, to advance
      expenses (including legal fees) incurred by an Indemnified Person in
      defending any claim, demand, action, suit or proceeding, from time to
      time, prior to the final disposition of such claim, demand, action, suit
      or proceeding upon receipt by the Depositor of (i) a written affirmation
      by or on behalf of the Indemnified Person of its or his good faith belief
      that it or he has met the standard of conduct set forth in this Section
      8.06 and (ii) an undertaking by or on behalf of the Indemnified Person to
      repay such amount if it shall be determined that the Indemnified Person is
      not entitled to be indemnified as authorized in the preceding subsection.

            The provisions of this Section 8.06 shall survive the termination of
this Declaration of Trust or the earlier resignation or removal of any Trustee.

            No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.06.

            The Depositor and any Trustee (in the case of the Property Trustee,
subject to Section 8.08 hereof) 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 none of the Trust, the
Holders, the Depositor or any such Trustee shall have any rights by virtue of
this Declaration of Trust 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. Neither the Depositor, nor any 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 the Depositor or any 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 Trustee may
engage or be interested in any financial or other transaction with the Depositor
or any Affiliate of the Depositor, or may act as depository for, trustee or
agent for, or act on any committee or body of holders of, securities or other
obligations of the Depositor or its Affiliates.

            SECTION 8.07. Corporate Property Trustee Required; Eligibility of
Trustees. (a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least $50
million. If any such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be


                                      -45-
<PAGE>

deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Property Trustee with
respect to the Trust Securities shall cease to be eligible in accordance with
the provisions of this Section 8.07, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article; provided, however,
that the Property Trustee need not qualify under the Trust Indenture Act until
such time as this Declaration of Trust is qualified under the Trust Indenture
Act.

            (b) There shall at all times be one or more Administrative Trustees
      hereunder. Each Administrative Trustee shall be either a natural person
      who is at least 21 years of age or a legal entity that shall act through
      one or more persons authorized to bind that entity.

            (c) There shall at all times be a Delaware Trustee. The Delaware
      Trustee shall either be (i) a natural person who is at least 21 years of
      age and a resident of the State of Delaware or (ii) a legal entity with
      its principal place of business in the State of Delaware and that
      otherwise meets the requirements of applicable Delaware law that shall act
      through one or more persons authorized to bind such entity.

            SECTION 8.08. Conflicting Interests. If the Property Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Declaration of Trust.

            SECTION 8.09. Co-Trustees and Separate Trustee. Unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the time be located,
the Depositor and the Administrative Trustees, by agreed action of the majority
of such Trustees, shall have power to appoint, and upon the written request of
the Administrative Trustees, the Depositor shall for such purpose join with the
Administrative Trustees in the execution, delivery, and performance of all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Property Trustee either to act as co-trustee, jointly with the
Property Trustee, of all or any part of such Trust Property, or to the extent
required by law to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other provisions of
this Section. If the Depositor does not join in such appointment within 15 days
after the receipt by it of a request so to do, or in case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment. Any co-trustee or separate trustee appointed
pursuant to this Section shall either be (i) a natural person who is at least 21
years of age and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act through one or
more persons authorized to bind such entity.


                                      -46-
<PAGE>

            Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.

            Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms,
namely:

            (a) The Trust Securities shall be executed and delivered and all
      rights, powers, duties, and obligations hereunder in respect of the
      custody of securities, cash and other personal property held by, or
      required to be deposited or pledged with, the Trustees specified
      hereunder, shall be exercised solely by such Trustees and not by such
      co-trustee or separate trustee.

            (b) The rights, powers, duties, and obligations hereby conferred or
      imposed upon the Property Trustee in respect of any property covered by
      such appointment shall be conferred or imposed upon and exercised or
      performed by the Property Trustee or by the Property Trustee and such
      co-trustee or separate trustee jointly, as shall be provided in the
      instrument appointing such co-trustee or separate trustee, except to the
      extent that under any law of any jurisdiction in which any particular act
      is to be performed, the Property Trustee shall be incompetent or
      unqualified to perform such act, in which event such rights, powers,
      duties and obligations shall be exercised and performed by such co-trustee
      or separate trustee.

            (c) The Property Trustee at any time, by an instrument in writing
      executed by it, with the written concurrence of the Depositor, may accept
      the resignation of or remove any co-trustee or separate trustee appointed
      under this Section, and, in case a Debenture Event of Default has occurred
      and is continuing, the Property Trustee shall have power to accept the
      resignation of, or remove, any such co-trustee or separate trustee without
      the concurrence of the Depositor. Upon the written request of the Property
      Trustee, the Depositor shall join with the Property Trustee in the
      execution, delivery and performance of all instruments and agreements
      necessary or proper to effectuate such resignation or removal. A successor
      to any co-trustee or separate trustee so resigned or removed may be
      appointed in the manner provided in this Section.

            (d) No co-trustee or separate trustee hereunder shall be personally
      liable by reason of any act or omission of the Property Trustee or any
      other trustee hereunder.

            (e) The Property Trustee shall not be required to supervise any
      co-trustee or separate trustee nor shall it be liable by reason of any act
      of a co-trustee or separate trustee or any employees or agents of a
      co-trustee or separate trustee.

            (f) Any Act of Holders delivered to the Property Trustee shall be
      deemed to have been delivered to each such co-trustee and separate
      trustee.


                                      -47-
<PAGE>

            SECTION 8.10. Resignation and Removal; Appointment of Successor. No
resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article VIII shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.

            Subject to the immediately preceding paragraph, a Relevant Trustee
may resign at any time by giving written notice thereof to the Securityholders.
If the instrument of acceptance by the successor Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 30 days after
the giving of such notice of resignation, the Relevant Trustee may petition, at
the expense of the Trust, any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.

            Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Holder of
Common Securities. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Outstanding Capital Securities, delivered to the Relevant Trustee
(in its individual capacity and on behalf of the Trust). An Administrative
Trustee may be removed by Act of the Holder of Common Securities at any time.

            If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee for
any cause, at a time when no Debenture Event of Default shall have occurred and
be continuing, the Holder of Common Securities, by Act of the Holder of Common
Securities delivered to the retiring Trustee, shall promptly appoint a successor
Trustee or Trustees and the retiring Trustee shall comply with the applicable
requirements of Section 8.11. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when a
Debenture Event of Default shall have occurred and be continuing, 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 retiring Relevant
Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and
such successor Trustee shall comply with the applicable requirements of Section
8.11. If an Administrative Trustee shall resign, be removed or become incapable
of acting as Administrative Trustee, at a time when a Debenture Event of Default
shall have occurred and be continuing, the Holder of Common Securities, by Act
of the Holder of Common Securities delivered to the Administrative Trustee,
shall promptly appoint a successor Administrative Trustee or Administrative
Trustees and such successor Administrative Trustee or Trustees shall comply with
the applicable requirements of Section 8.11. If no successor Relevant Trustee
shall have been so appointed by the Holder of Common Securities or the Holders
of Capital Securities and accepted appointment in the manner required by Section
8.11, any Securityholder who has been a Securityholder of Trust Securities for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.


                                      -48-
<PAGE>

            The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.08 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.

            Notwithstanding the foregoing or any other provision of this
Declaration of Trust, in the event any Administrative Trustee or a Delaware
Trustee who is a natural person dies or becomes, in the opinion of the
Depositor, incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (a) the unanimous act of remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies the
eligibility requirement for Administrative Trustees or Delaware Trustee, as the
case may be, set forth in Section 8.07).

            SECTION 8.11. Acceptance of Appointment by Successor. In the case of
the appointment hereunder of a successor Trustee, such successor Trustee so
appointed shall execute, acknowledge and deliver to the Trust and to the
retiring Trustee any instrument accepting such appointment, 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 the rights, powers, trusts and duties of the retiring Trustee, but,
on the request of the Depositor or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and if the Property Trustee is the resigning Trustee the
Property Trustee shall duly assign, transfer and deliver to the successor
Property Trustee all Trust Property and money held by such retiring Property
Trustee hereunder.

            In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each successor Relevant Trustee with
respect to the Trust 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
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Declaration of Trust as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees if the same trust and that each such Relevant
Trustee shall be Trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Relevant Trustee;
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


                                      -49-
<PAGE>

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 Trust Securities and the Trust.

            Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.

            No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.

            SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Relevant Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article VIII, without the execution or filing
of any paper or any further act on the part of any of the parties hereto.

            SECTION 8.13. Preferential Collection of Claims Against Depositor or
Trust. In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:

            (a) to file and prove a claim for the whole amount of any
      Distributions owing and unpaid in respect of the Trust Securities and to
      file such other papers or documents as may be necessary or advisable in
      order to have the claims of the Property Trustee (including any claim for
      the reasonable compensation, expenses, disbursements and advances of the
      Property Trustee, its agents and counsel) and of the Holders allowed in
      such judicial proceeding, and

            (b) to collect and receive any moneys or other property payable or
      deliverable on any such claims and to distribute the same; and any
      custodian, receiver, assignee, trustee, liquidator, sequestrator or other
      similar official in any such judicial proceeding is hereby authorized by
      each Holder to make such payments to the Property Trustee and, in the
      event the Property Trustee shall consent to the making of such


                                      -50-
<PAGE>

      payments directly to the Holders, to pay to the Property Trustee any
      amount due it for the reasonable compensation, expenses, disbursements and
      advances of the Property Trustee, its agents and counsel, and any other
      amounts due the Property Trustee.

            Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or compensation affecting
the Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.

            SECTION 8.14. Reports by Property Trustee. Upon qualification of
this Declaration of Trust under the Trust Indenture Act, within 60 days after
May 15 of each year, commencing May 15, 1997, the Property Trustee shall provide
to the Holders of the Capital Securities such reports as are required by ss. 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
ss. 313 of the Trust Indenture Act. The Property Trustee shall also comply with
the requirements of ss. 313(d) of the Trust Indenture Act.

            SECTION 8.15. Reports to the Property Trustee. Upon Qualification of
this Indenture under the Trust Indenture Act, the Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 (a) of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.

            SECTION 8.16. Evidence of Compliance with Conditions Precedent. Upon
qualification of this Indenture under the Trust Indenture Act, each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration of Trust that relate to any
of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers'
Certificate.

            SECTION 8.17. Number of Trustees. (a) The number of Trustees shall
be six; provided that the Holder of all of the Common Securities by written
instrument may increase or decrease the number of Administrative Trustees. The
Property Trustee and the Delaware Trustee may be the same Person.

            (b) If a Trustee ceases to hold office for any reason and the number
      of Administrative Trustees is not reduced pursuant to Section 8.17(a), or
      if the number of Trustees is increased pursuant to Section 8.17(a), a
      vacancy shall occur. The vacancy shall be filed with a Trustee appointed
      in accordance with Section 8.10.

            (c) The death, resignation, retirement, removal, bankruptcy,
      incompetence or incapacity to perform the duties of a Trustee shall not
      operate to annul the Trust. Whenever a vacancy in the number of
      Administrative Trustees shall occur, until such vacancy is filled by the
      appointment of an Administrative Trustee in accordance with


                                      -51-
<PAGE>

      Section 8.10, the Administrative Trustees in office, regardless of their
      number (and notwithstanding any other provision of this Agreement), shall
      have all the powers granted to the Administrative Trustees and shall
      discharge all the duties imposed upon the Administrative Trustees by this
      Declaration of Trust.

            SECTION 8.18. Delegation of Power. (a) Any Administrative Trustee
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any documents contemplated in Section 2.07(a), including any registration
statement or amendment thereto filed with the Commission, or making any other
governmental filing; and

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

                                   ARTICLE IX

                       Termination, Liquidation and Merger

            SECTION 9.01. Termination Upon Expiration Date; Termination Upon
Special Event. Unless earlier terminated, the Trust shall automatically
terminate on January 27, 2037 (the "Expiration Date"), following the
distribution of the Trust Property in accordance with Section 9.04.

            SECTION  9.02.  Early  Termination.  The  first to occur of any of
the following events is an "Early Termination Event":

            (a) the occurrence of a Bankruptcy Event in respect of, or the
      dissolution or liquidation of, the Depositor or the Holder of the Common
      Securities;

            (b) the written direction to the Property Trustee from the
      Depositor, as issuer of the Junior Subordinated Debt Securities, at any
      time (which direction is optional and wholly within the discretion of the
      Depositor subject to (i) receipt by the Depositor of the Opinion of
      Counsel to the effect that such distribution will not be a taxable event
      to Holders of the Capital Securities and (ii) receipt of prior approval of
      the Federal Reserve if then required under applicable capital guidelines
      or policies of the Federal Reserve (including upon the occurrence and
      continuation of a Special Event in respect of the Trust) to terminate the
      Trust and, after satisfaction of liabilities to creditors of the Trust as
      provided by applicable law, distribute a Like Amount of the Junior
      Subordinated Debt Securities to Securityholders;


                                      -52-
<PAGE>

            (c) the redemption of all of the Trust Securities in connection with
      the redemption of all the Junior Subordinated Debt Securities (including
      upon the occurrence and continuation of a Special Event pursuant to
      Section 11.07(b) of the Indenture); and

            (d) the entry of an order for dissolution of the Trust by a court of
      competent jurisdiction.

            SECTION 9.03. Termination. The respective obligations and
responsibilities of the Trustees and the Trust created and continued hereby
shall terminate upon the latest to occur of the following: (a) the payment of
any expenses owed by the Trust, (b) the distribution by the Property Trustee to
Securityholders upon the liquidation of the Trust pursuant to Section 9.04, or
upon the redemption of all of the Trust Securities pursuant to Section 4.02, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities, and (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.

            SECTION 9.04. Liquidation. (a) If an Early Termination Event
specified in clause (a), (b) or (d) of Section 9.02 occurs or upon the
Expiration Date, the Trust shall be liquidated by the Trustees as expeditiously
as the Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to each
Securityholder a Like Amount of Junior Subordinated Debt Securities, subject to
Section 9.04(d). Upon the written direction of any Administrative Trustee,
notice of liquidation shall be given by the Property Trustee by first-class
mail, postage prepaid, mailed not later than 30 nor more than 90 days prior to
the Liquidation Date to each Holder at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:

            (i)   state the Liquidation Date (which in the case of any
                  liquidation following the occurrence of a Special Event shall
                  not be more than 90 days following such occurrence);

            (ii)  state that from and after the Liquidation Date the Trust
                  Securities will no longer be deemed to be Outstanding and any
                  Trust Securities Certificates not surrendered for exchange
                  will be deemed to represent a Like Amount of Junior
                  Subordinated Debt Securities; and

            (iii) provide such information with respect to the mechanics by
                  which Holders may exchange Trust Securities Certificates for
                  Junior Subordinated Debt Securities, or, if Section 9.04(d)
                  applies, receive a Liquidation Distribution, as the
                  Administrative Trustees or the Property Trustee shall deem
                  appropriate.

            (b) Except where Section 9.02(c) or 9.04(d) applies, in order to
      effect the liquidation of the Trust and distribution of the Junior
      Subordinated Debt Securities to Securityholders, the Property Trustee
      shall establish a record date for such distribution


                                      -53-
<PAGE>

      (which shall be not more than 45 days prior to the Liquidation Date) and,
      either itself acting as exchange agent or through the appointment of a
      separate exchange agent, shall establish such procedures as it shall deem
      appropriate to effect the distribution of Junior Subordinated Debt
      Securities in exchange for the Outstanding Trust Securities Certificate.

            (c) Except where Section 9.02(c) or 9.04(d) applies, after the
      Liquidation Date, (i) the Trust Securities will no longer be deemed to be
      Outstanding, (ii) certificates representing a Like Amount of Junior
      Subordinated Debt Securities will be issued to Holders, upon surrender of
      Trust Securities Certificates to the Administrative Trustees or their
      agent for exchange, (iii) any Trust Securities Certificates not so
      surrendered for exchange will be deemed to represent a Like Amount of
      Junior Subordinated Debt Securities accruing interest at the rate provided
      for in the Junior Subordinated Debt Securities from the last Distribution
      Date on which a Distribution was made on such Trust Securities
      Certificates until such certificates are so surrendered (until such
      certificates are so surrendered, no payments of interest or principal will
      be made to the Holders of Trust Securities Certificates with respect to
      such Junior Subordinated Debt Securities) and (iv) all rights of
      Securityholders holding Trust Securities will cease, except the right of
      such Securityholders to receive Junior Subordinated Debt Securities upon
      surrender of Trust Securities Certificates.

            (d) In the event that, notwithstanding the other provisions of this
      Section 9.04, whether because of an order for dissolution entered by a
      court of competent jurisdiction or otherwise, distribution of the Junior
      Subordinated Debt Securities in the manner provided herein is determined
      by the Property Trustee not to be practical, the Trust Property shall be
      liquidated, and the Trust shall be dissolved, wound-up or terminated, by
      the Property Trustee in such manner as the Property Trustee determine. In
      such event, on the date of the dissolution, winding-up or other
      termination of the Trust, Securityholders will be entitled to receive out
      of the assets of the Trust available for distribution to Securityholders
      after satisfaction of liabilities to creditors of the Trust as provided by
      applicable law, an amount equal to the aggregate of Liquidation Amount of
      such Holders of Trust Securities plus accumulated and unpaid Distributions
      thereon to the date of payment (such amount being the "Liquidation
      Distribution"). If, upon any such dissolution, winding up or termination,
      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, subject to the next succeeding sentence, the amounts
      payable by the Trust on the Trust Securities shall be paid on a pro rata
      basis (based upon Liquidation Amounts). Holders of the Common Securities
      will be entitled to receive Liquidation Distributions upon any such
      dissolution, winding-up or termination pro rata (determined as aforesaid)
      with Holders of Capital Securities, except that, if a Debenture Event of
      Default has occurred and is continuing, the Capital Securities shall have
      a priority over the Common Securities, and no payments shall be made with
      respect to the Common Securities until Holders of Capital Securities have
      been paid in full. Any such determination and liquidation by the Property
      Trustee shall


                                      -54-
<PAGE>

      be conclusive upon the Securityholders and the Property Trustee shall have
      no liability in connection therewith.

            SECTION 9.05. Mergers, Consolidations, Amalgamations or Replacements
of the Trust. The Trust may not merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 9.05. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Capital
Securities, the Property Trustee or the Delaware Trustee, the Trust may merge
with or into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, however, that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Trust Securities or (b) substitutes for the Trust
Securities other securities having substantially the same terms as the Trust
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Trust Securities rank in priority with respect to distributions
and payments upon liquidation, redemption and otherwise, (ii) the Depositor
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee as the holder of the Junior Subordinated Debt
Securities, (iii) the Successor Securities (if Capital Securities) are listed or
traded, or any Successor Securities will be listed or traded upon notification
of issuance, on any national securities exchange or other organization on which
the Capital Securities are then listed or traded, if any, (iv) if the Capital
Securities, including any successor Securities, are rated by any nationally
recognized statistical rating organization prior to such transaction, such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Trust Securities (including any Successor Securities) or, if
so rated, the Junior Subordinated Debt Securities, to be downgraded by such
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Trust Securities (including any Successor Securities) in any material respect,
(vi) such successor entity has a purpose identical to that of the Trust, (vii)
prior to such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Depositor has received an Opinion of Counsel to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Trust Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act, (viii) the Depositor or any permitted
successor or assignee owns all of the Common Securities of such successor entity
and guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee, and (ix) the
Depositor delivers to the Property Trustee an Officer's Certificate and an
Opinion of Counsel, each to the effect that all conditions precedent in this
Section 9.05 to such transaction have been satisfied. Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by or convey, transfer or lease its properties and
assets


                                      -55-
<PAGE>

substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.

                                    ARTICLE X

                            Miscellaneous Provisions

            SECTION 10.01. Limitation of Rights of Securityholders. The death,
dissolution or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Declaration
of Trust, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.

            SECTION 10.02. Liability of the Depositor. The Depositor, as issuer
of the Junior Subordinated Debt Securities, shall be liable for all the debts
and obligations of the Trust (other than with respect to payments of principal,
interest, or premium, if any, on the Trust Securities) to the extent not
satisfied out of the Trust's assets.

            SECTION 10.03. Amendment. (a) This Declaration of Trust may be
amended from time to time by the Property Trustee, the Administrative Trustees
and the Depositor, without the consent of any Securityholders (i) to cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Declaration of Trust, which shall not be
inconsistent with the other provisions of this Declaration of Trust or (ii) to
modify, eliminate or add to any provisions of this Declaration of Trust to such
extent as shall be necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are Outstanding or to ensure that the Trust will not be
required to register as an investment company under the 1940 Act; or (iii) to
modify, correct or supplement in any respect the provisions relating to the
exchange of the Trust Securities for identical securities pursuant to the
Registration Rights Agreement; provided, however, that in the case of clauses
(i) and (iii), such action shall not adversely affect in any material respect
the interests of any Securityholder, and any amendments of this Declaration of
Trust shall become effective when notice thereof is given to the
Securityholders.

            (b) Except as provided in Section 10.03(c) hereof, any provision of
      this Declaration of Trust may be amended by the Trustees and the Depositor
      with (i) the consent of Securityholders representing not less than a
      majority (based upon Liquidation Amounts) of the Trust Securities then
      Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to
      the effect that such amendment or the exercise of any power granted to the
      Trustees in accordance with such amendment will not affect


                                      -56-
<PAGE>

      the Trust's status as a grantor trust for United States federal income tax
      purposes or the Trust's exemption from status of an investment company
      under the 1940 Act.

            (c) In addition to and notwithstanding any other provision in this
      Declaration of Trust, without the consent of each affected Securityholder
      (such consent being obtained in accordance with Section 6.03 or 6.08
      hereof), this Declaration of Trust may not be amended to (i) change the
      amount or timing of any Distribution on the Trust Securities or otherwise
      adversely affect the amount of any Distribution required to be made in
      respect of the Trust Securities as of a specified date or (ii) restrict
      the right of a Securityholder to institute suit for the enforcement of any
      such payment on or after such date. Notwithstanding any other provision
      herein, without the unanimous consent of the Securityholders (such consent
      being obtained in accordance with Section 6.03 or 6.08 hereof), this
      paragraph (c) of this Section 10.03 may not be amended.

            (d) Notwithstanding any other provisions of this Declaration of
      Trust, no Trustee shall enter into or consent to any amendment to this
      Declaration of Trust which would cause the Trust to fail or cease to
      qualify for the exemption from status of an investment company under the
      1940 Act or fail or cease to be classified as a grantor trust for United
      States federal income tax purposes.

            (e) Notwithstanding anything in this Declaration of Trust to the
      contrary, without the consent of the Depositor this Declaration of Trust
      may not be amended in a manner which imposes any additional obligation on
      the Depositor.

            (f) Notwithstanding any other provision of this Declaration of
      Trust, no amendment to this Declaration of Trust may be made if, as a
      result of such amendment, it would cause the Trust to fail to be
      classified as a grantor trust for United States federal income tax
      purposes.

            (g) In the event that any amendment to this Declaration of Trust is
      made, the Administrative Trustees shall promptly provide to the Depositor
      a copy of such amendment.

            (h) Neither the Property Trustee nor the Delaware Trustee shall be
      required to enter into any amendment to this Declaration of Trust which
      affects its own rights, duties or immunities under this Declaration of
      Trust or would otherwise expose the Property Trustee to any liability or
      be contrary to applicable law. The Property Trustee shall be entitled to
      receive an Opinion of Counsel and an Officers' Certificate stating that
      any amendment to this Declaration of Trust is in compliance with this
      Declaration of Trust and that all conditions precedent, if any, to the
      execution and delivery of such amendment have been satisfied.

            SECTION 10.04. Separability. In case any provision in this
Declaration of Trust or in the Trust Securities Certificates shall be invalid,
illegal or unenforceable, the


                                      -57-
<PAGE>

validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

            SECTION 10.05. Governing Law. This Declaration of Trust and the
rights and obligations of each of the Securityholders, the Trust and the
Trustees with respect to this Declaration of Trust and the Trust Securities
shall be construed in accordance with and governed by the laws of the State of
Delaware without regard to its conflict of laws principles. The provisions of
Sections 3540 and 3561 of Title 12 of the Delaware Code shall not apply to this
Trust.

            SECTION 10.06. Payments Due on Non-Business Day. If the date fixed
for any payment on any Trust Security shall be a day that is not a Business Day,
then such payment need not be made on such date but may be made on the next
succeeding day that is a Business Day (except as otherwise provided in Section
4.02(d)), with the same force and effect as though made on the date fixed for
such payment, and no interest shall accrue thereon for the period after such
date.

            SECTION 10.07. Successors. This Declaration of Trust shall be
binding upon and shall inure to the benefit of any successor to the Depositor,
the Trust or the Relevant Trustee, including any successor by operation of law.
Except in connection with a consolidation, merger or sale involving the
Depositor that is permitted under Article VI of the Indenture and pursuant to
which the assignee agrees in writing to perform the Depositor's obligations
hereunder, the Depositor shall not assign its obligations hereunder.

            SECTION 10.08. Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Declaration of
Trust.

            SECTION 10.09. Reports, Notices and Demands. Any report, notice,
demand or other communication which by any provision of this Declaration of
Trust is required or permitted to be given or served to or upon any
Securityholder or the Depositor may be given or served in writing by deposit
thereof, first class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a Capital
Securityholder, to such Capital Securityholder as such Securityholder's name and
address may appear on the Securities Register, and (b) in the case of the Holder
of Common Securities or the Depositor, to U.S.B. Holding Co., Inc., 100 Dutch
Hill Road, Orangeburg, New York 10961, Attention: Steven T. Sabatini, Executive
Vice President and Chief Financial Officer, facsimile no.: (914) 365-4600. Any
notice to Holders of Capital Securities may also be given to such Owners as
have, within two years preceding the giving of such notice, filed their names
and addresses with the Property Trustee for that purpose. Such notice, demand or
other communication to or upon a Securityholder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission.

            Any notice, demand or other communication which by any provision of
this Declaration of Trust is required or permitted to be given or served to or
upon the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (a) with respect


                                      -58-
<PAGE>

to the Property Trustee to The Chase Manhattan Bank, 450 West 33rd Street, 15th
Floor, New York, NY 10001-2697, Attention: Corporate Trustee Administration
Department; (b) with respect to the Delaware Trustee to Chase Manhattan Bank
Delaware, 1201 Market Street, 8th Floor, Wilmington, DE 19801, Attention:
Corporate Trustee Administration Department; and (c) with respect to the
Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention: Office of the Executive Vice President". Such
notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Trust or the Property Trustee.

            SECTION 10.10. Agreement Not to Petition. Each of the Trustees and
the Depositor agree for the benefit of the Securityholders that, until at least
one year and one day after the Trust has been terminated in accordance with
Article IX, they shall not file, or join in the filing of, a petition against
the Trust under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Laws. In the event the
Depositor takes action in violation of this Section 10.10, the Property Trustee
agrees, for the benefit of Securityholders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be estopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.10 shall survive the
termination of this Declaration of Trust.

            SECTION 10.11. Trust Indenture Act; Conflict with Trust Indenture
Act. This Declaration of Trust will not be qualified under the Trust Indenture
Act except upon the effectiveness of a registration statement and the
consummation of an exchange offer pursuant to the Registration Rights Agreement.
By its terms, however, this Declaration of Trust incorporates certain provisions
of the Trust Indenture Act. Upon the effectiveness of any such registration
statement, clauses (a), (b), (c) and (d), below, shall apply to this Declaration
of Trust.

            (a) This Declaration of Trust is subject to the provisions of the
      Trust Indenture Act that are required to be part of this Declaration of
      Trust and shall, to the extent applicable, be governed by such provisions.

            (b) The Property Trustee shall be the only Trustee which is a
      trustee for the purposes of the Trust Indenture Act.

            (c) If any provision hereof limits, qualifies or conflicts with
      another provision hereof which is required to be included in this
      Declaration of Trust by any of the provisions of the Trust Indenture Act,
      such required provision shall control. If any provision of this
      Declaration of Trust modifies or excludes any provision of the Trust
      Indenture Act which may be so modified or excluded, the latter provision
      shall be


                                      -59-
<PAGE>

      deemed to apply to this Declaration of Trust as so modified or excluded,
      as the case may be.

            (d) The application of the Trust Indenture Act to this Declaration
      of Trust shall not affect the nature of the Securities as securities
      representing undivided beneficial interests in the assets of the Trust.

            SECTION 10.12. Acceptance of Terms of Declaration of Trust,
Guarantee and Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY
INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER,
WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS DECLARATION OF TRUST AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS DECLARATION OF TRUST SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.


                                      -60-
<PAGE>

                                       U.S.B. HOLDING CO., INC.,
                                       Depositor

                                       by  /s/ [ILLEGIBLE]
                                           ----------------------------------
                                           Name:
                                           Title:

                                       THE CHASE MANHATTAN BANK,
                                       Property Trustee

                                       by  /s/ Sheik Wiltshire
                                           ----------------------------------
                                           Name:  Sheik Wiltshire
                                           Title: (Second Vice President)

                                       CHASE MANHATTAN BANK DELAWARE,
                                       not in its individual capacity but
                                       solely as Trustee

                                       by  /s/ John J. Cashin
                                           ----------------------------------
                                           Name:  John J. Cashin
                                           Title: Senior Trust Officer


                                      -61-
<PAGE>

                                       /s/ Thomas E. Hales
                                       -------------------------------
                                       Thomas E. Hales
                                       as Administrative Trustee


                                       /s/ Michael H. Fury
                                       -------------------------------
                                       Michael H. Fury
                                       as Administrative Trustee


                                       /s/ Raymond J. Crotty
                                       -------------------------------
                                       Raymond J. Crotty
                                       as Administrative Trustee


                                       /s/ Steven T. Sabatini
                                       -------------------------------
                                       Steven T. Sabatini
                                       as Administrative Trustee


                                      -62-
<PAGE>

                                                                       EXHIBIT A

                              CERTIFICATE OF TRUST

            The undersigned, the trustee of Union State Capital Trust I,
desiring to form a business trust pursuant to the Delaware Business Trust Act,
12 Del. C. Section 3801, hereby certify as follows:

            (a) The name of the business trust formed hereby is "Union State
      Capital Trust I" (the "Trust").

            (B) The name and business address of the trustee of the Trust that
      has its principal place of business in the State of Delaware are as
      follows:

            Chase Manhattan Bank Delaware

            1201 Market Street, 9th Floor, Wilmington, DE 19801.

            (C) This Certificate of Trust shall be effective as of the date of
      filing.

         Dated: January    , 1997

                                    CHASE MANHATTAN BANK DELAWARE, not in its
                                    individual capacity but solely as trustee

                                    by _______________________________________
                                       Name:
                                       Title:

                                    Thomas E. Hales, not in his individual
                                    capacity but solely as trustee


                                    __________________________________________

                                    Michael H. Fury, not in his individual
                                    capacity but solely as trustee


                                    __________________________________________

                                    Raymond J. Crotty, not in his individual
                                    capacity but solely as trustee

                                    __________________________________________


                                      -63-
<PAGE>

                                    Steven T. Sabatini, not in his individual
                                    capacity but solely as trustee

                                    __________________________________________


                                      -64-
<PAGE>

                                                                       EXHIBIT B

IF THE CAPITAL SECURITY IS A RESTRICTED SECURITY,

      THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
      SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
      ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
      ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
      NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
      HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
      OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE WHICH IS THREE YEARS
      AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
      WHICH U.S.B. HOLDING CO., INC. (THE "CORPORATION") OR ANY AFFILIATE OF THE
      CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
      SECURITY) (THE "RESALE RESTRICTIONS TERMINATION DATE") ONLY (A) TO THE
      CORPORATION, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
      PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
      IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
      RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
      QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
      BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
      INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
      RULE 501 UNDER THE SECURITIES ACT ACQUIRING THE 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
      (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE TRUST'S AND THE
      PROPERTY TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
      PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
      COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
      THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE
      OBTAINED FROM THE TRUST OR THE PROPERTY TRUSTEE. THIS LEGEND WILL BE
      REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTIONS
      TERMINATION DATE."


                                      -65-
<PAGE>

            IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE A GLOBAL SECURITIES
      CERTIFICATE, INSERT--[This Capital Securities Certificate is a Global
      Capital Securities Certificate within the meaning of the Declaration of
      Trust hereinafter referred to and is registered in the name of The
      Depository Trust Company (the "Depositary") or a nominee of the
      Depositary. This Capital Securities Certificate is exchangeable for
      Capital Securities Certificates registered in the name of a person other
      than the Depositary or its nominee only in the limited circumstances
      described in the Declaration of Trust and no transfer of this Capital
      Securities Certificate (other than a transfer of this Capital Securities
      Certificate as a whole by the Depositary to a nominee of the Depositary or
      by a nominee of the Depositary to the Depositary or another nominee of the
      Depositary) may be registered except in the limited circumstances
      described in the Declaration of Trust.

            Unless this Capital Securities Certificate is presented by an
      authorized representative of The Depositary Trust Company, 55 Water
      Street, New York ,to Union State Capital Trust I or its agent for
      registration of transfer, exchange or payment, and any Capital Securities
      Certificate issued is registered in the name of Cede & Co. or such other
      name as requested by an authorized representative of The Depositary Trust
      Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
      OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
      inasmuch as the registered owner hereof, Cede & Co., has an interest
      herein.]

            The Capital Securities are issued, and may be transferred, only in
      blocks having an aggregate Liquidation Amount of not less than $100,000.
      Any transfer, sale or other disposition of Capital Securities in a block
      having a Liquidation Amount of less than $100,000 shall be deemed to be
      void and of no legal effect whatsoever. Any such 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.

            NO EMPLOYEE BENEFIT OR OTHER PLAN 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 (EACH, A "PLAN"), NO
      ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY
      PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON
      INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL
      SECURITIES CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR
      HOLDER IS COVERED BY THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT
      OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 96-23, 95-60,
      91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
      PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR


                                      -66-
<PAGE>

      ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
      HOLDING HEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND
      IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF
      ANY PLAN, OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE
      96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR
      HOLDING.


                                      -67-
<PAGE>

                                                           Liquidation Amount of
Certificate Number                                            Capital Securities

                                  CUSIP NO. [ ]
                    Certificate Evidencing Capital Securities
                                       of
                           Union State Capital Trust I
                           [____]% Capital Securities
                (Liquidation Amount $1,000 per Capital Security)

            Union State Capital Trust I, a statutory business trust formed 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 an undivided beneficial interest in the assets of Trust
and designated Union State Capital Trust I ___% Capital Securities (Liquidation
Amount $1,000 per Capital Security) (the "Capital Securities"). 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 as provided in Section 5.05 of the Declaration
of Trust (as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities are set
forth in, and this certificate and the Capital Securities presented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of _____ __,
1997, as the same may be amended from time to time (the "Declaration of Trust")
among U.S.B. Holding Co., Inc., as Depositor, The Chase Manhattan Bank, as
Property Trustee, Chase Manhattan Bank Delaware, as Delaware Trustee and the
Administrative Trustees named therein, including the designation of the terms of
Capital Securities as set forth therein. The Holder is entitled to the benefits
of the Guarantee Agreement entered into by U.S.B. Holding Co., Inc., a
corporation, and The Chase Manhattan Bank, as Guarantee trustee, dated as of
_______ __, 1997, (the "Guarantee"), to the extent provided therein. The Trust
will furnish a copy of the Declaration of Trust and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.

            Terms used but not defined herein have the meanings set forth in the
Declaration of Trust.

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


                                      -68-
<PAGE>

            IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this Certificate this    day of     ,    .

                                    UNION STATE CAPITAL TRUST I

                                    by___________________________________
                                       Name:
                                       Title: Administrative Trustee

                                    COUNTERSIGNED AND REGISTERED:

                                    THE CHASE MANHATTAN BANK,
                                    as Property Trustee

                                    by___________________________________
                                       Authorized Officer


                                      -69-
<PAGE>

                                   ASSIGNMENT

            FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security 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)

      The signatures should be guaranteed by an eligible guarantor institution
      (banks, stockbrokers, savings and loan associations and credit unions with
      membership in an approved signature guarantee medallion program), pursuant
      to SEC Rule 17Ad-15.


                                      -70-
<PAGE>

                                                                       EXHIBIT C

                      THIS CERTIFICATE IS NOT TRANSFERABLE

                                                           Liquidation Amount of
Certificate Number                                            Capital Securities

                    Certificate Evidencing Common Securities
                                       of
                           Union State Capital Trust I

                            [____]% Common Securities
                 (Liquidation Amount $1,000 per Common Security)

            Union State Capital Trust I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that U.S.B.
Holding Co., Inc. (the "Holder") is the registered owner of _____ ( ) common
securities of the Trust representing beneficial interests of the Trust and
designated the [____]% Common Securities (Liquidation Amount $1,000 per Common
Security) (the "Common Securities"). Except as provided in Section 5.11 of the
Declaration of Trust (as defined below), the Common Securities are not
transferable and any attempted transfer hereof shall be void. The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of _____ __, 1997, as the same may be amended from time to
time (the "Declaration of Trust") among U.S.B. Holding Co., Inc., as Depositor,
The Chase Manhattan Bank, as Property Trustee, Chase Manhattan Bank Delaware, as
Delaware Trustee, and the Administrative Trustees named therein, including the
designation of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Declaration of Trust to the Holder without
charge upon written request to the Trust at its principal place of business or
registered office.

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

            Terms used but not defined herein have the meanings set forth in the
Declaration of Trust.


                                      -71-
<PAGE>

            IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this     day of    ,    .


                                    UNION STATE CAPITAL TRUST I

                                    by___________________________________
                                       Name:
                                       Title: Administrative Trustee


                                    COUNTERSIGNED AND REGISTERED:

                                    THE CHASE MANHATTAN BANK,
                                    as Property Trustee

                                    by___________________________________
                                       Authorized Officer


                                      -72-
<PAGE>

                                                                       EXHIBIT D

                   [Form of Restricted Securities Certificate]

                    RESTRICTED CAPITAL SECURITIES CERTIFICATE

                     (For transfers pursuant to ss. 5.05(b)
                          of the Declaration of Trust)

[__________________________________],
as Security Registrar
[address]

                        Re: 9.58% Capital Securities of
                            Union State Capital Trust I (the "Trust")
                            (the "Capital Securities")

            Reference is made to the Amended and Restated Declaration of Trust,
dated as of February 5, 1997 (the "Declaration of Trust"), among U.S.B. Holding
Co., Inc., as Depositor, The Chase Manhattan Bank, as Property Trustee, Chase
Manhattan Bank Delaware, as Delaware Trustee, and the Administrative Trustees
named therein. Terms used herein and defined in the Declaration of Trust or in
Regulation D, Rule 144A or Rule 144 under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), are used herein as so defined.

            This certificate relates to $______________ aggregate Liquidation
Amount of Capital Securities, which are evidenced by the following
certificate(s) (the "Specified Securities"):

            CUSIP No(s).

            CERTIFICATE No(s).

            CURRENTLY IN BOOK-ENTRY FORM:  ___Yes  ___No (check one)

The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Capital Securities
Certificate, they are held through the Clearing Agency or a Clearing Agency
Participant in the name of the Undersigned, as or on behalf of the Owner. If the
Specified Securities are not represented by a Global Capital Securities
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.

            The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Restricted Capital Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being


                                      -73-
<PAGE>

effected pursuant to an effective registration statement under the Securities
Act, it is being effected in accordance with one of the following (CHECK ONE):

___ (1)     transferred to the Corporation; or

___ (2)     exchanged for the undersigned's own account without transfer; or

___ (3)     transferred  pursuant  to and in  compliance  with Rule 144A under
            the Securities Act; or

___ (4)     to an  institutional  "accredited  investor" within the meaning of
            subparagraph  (a)(1),  (2),  (3) or  (7) of  Rule  501  under  the
            Securities  Act of 1933 that is acquiring  the Capital  Securities
            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

___ (5)     transferred  pursuant  to  another  available  exemption  from the
            registration requirements of the Securities Act.

Unless such transfer is being effected in accordance with one of the above, the
Transfer Agent will refuse to register any of the Capital Securities evidenced
by this certificate in the name of any person other than the Holder thereof;
provided, however, that if (4) or (5) is applicable, the Securities Registrar
may require, prior to registering any such transfer of the Capital Securities
such legal opinions, certifications and other information as the Trust has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, such as the exemption provided by Rule 144
under such Act; provided, further, that if (3) is applicable, the transferee
must also certify that it is a qualified institutional buyer as defined in Rule
144A.

            This certificate and the statements contained herein are made for
your benefit and the benefit of the Depositor, the Trust and the Initial
Purchaser.

Dated:                              __________________________________________
                                    (Print the name of the Undersigned, as
                                    such term is defined in the second
                                    paragraph of this certificate.)

                                    By: _______________________________
                                        Name:
                                        Title:


                                      -74-
<PAGE>

                                    (If the Undersigned is a corporation,
                                    partnership or fiduciary, the title of the
                                    person signing on behalf of the Undersigned
                                    must be stated.)


                                      -75-