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

                                       to

                            THE CHASE MANHATTAN BANK

                                     Trustee

                        --------------------------------

                          JUNIOR SUBORDINATED INDENTURE

                          Dated as of February 5, 1997

================================================================================
<PAGE>

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

            Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 317
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1990, are a part of and govern the Indenture whether
or not physically contained therein) and the Junior Subordinated Indenture,
dated as of February 5, 1997.

                                                                    Indenture
Trust Indenture Act Section                                          Section
---------------------------                                          -------

ss.310(a)(1), (2) and (5).....................................   6.09
ss.310(a)(3)..................................................   Not Applicable
ss.310(a)(4)..................................................   Not Applicable
ss.310(b).....................................................   6.08, 6.10
ss.310(c).....................................................   Not Applicable
ss.311(a).....................................................   6.13
ss.311(b).....................................................   6.13
ss.312(a).....................................................   7.01, 7.02 (a)
ss.312(b).....................................................   7.02(b)
ss.312(c).....................................................   7.02(c)
ss.313(a).....................................................   7.03(a)
ss.313(b).....................................................   7.03 (b)
ss.313(c).....................................................   7.03 (a),
                                                                      7.03 (b)
ss.313(d).....................................................   7.03(c)
ss.314(a)(1), (2) and (3).....................................   7.04
ss.314(a)(4)..................................................   10.04
ss.314(b).....................................................   Not Applicable
ss.314(c)(1)..................................................   1.02
ss.314(c)(2)..................................................   1.02
ss.314(c)(3)..................................................   Not Applicable
ss.314(d).....................................................   Not Applicable
ss.314(e).....................................................   1.02
ss.314(f).....................................................   Not Applicable
ss.315(a).....................................................   6.01(a)
ss.315(b).....................................................   6.02, 7.03(a)
ss.315(c).....................................................   6.01(b)
ss.315(d).....................................................   6.01(c)
ss.315(d)(1)..................................................   6.01(c)(1)
ss.315(d)(2)..................................................   6.01(c)(2)
ss.315(d)(3)..................................................   6.01(c)(3)
ss.315(e).....................................................   5.14
ss.316(a).....................................................   1.01
ss.316(a)(1)(A)...............................................   5.12
ss.316(a)(1)(B)...............................................   5.13
ss.316(a)(2)..................................................   Not Applicable
ss.316(b).....................................................   5.08
ss.316(c).....................................................   1.04(f)
ss.317(a)(1)..................................................   5.03
ss.317(a)(2)..................................................   5.04
ss.317(b).....................................................   10.03
ss.318(a).....................................................   1.07

----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
      part of the Junior Subordinated Indenture.
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                                      -3-


                                TABLE OF CONTENTS

                                                                       Page
                                                                       ----

                ARTICLE I Definitions and Other Provisions of
                               General Application

SECTION 1.01.  Definitions.............................................1
SECTION 1.02.  Compliance Certificate and Opinions.....................11
SECTION 1.03.  Forms of Documents Delivered to Trustee.................12
SECTION 1.04.  Acts of Holders.........................................12
SECTION 1.05.  Notices, Etc. to Trustee and Company....................13
SECTION 1.06.  Notice to Holders; Waiver...............................14
SECTION 1.07.  Conflict with Trust Indenture Act.......................14
SECTION 1.08.  Effect of Headings and Table of Contents................14
SECTION 1.09.  Successors and Assigns..................................14
SECTION 1.10.  Separability Clause.....................................14
SECTION 1.11.  Benefits of Indenture...................................14
SECTION 1.12.  Governing Law...........................................15
SECTION 1.13.  Non-Business Days.......................................15

                            ARTICLE II Security Forms

SECTION 2.01.  Forms Generally.........................................15
SECTION 2.02.  Form of Face of Security................................16
SECTION 2.03.  Form of Reverse of Security.............................20
SECTION 2.04.  Additional Provisions Required in Global Security.......24
SECTION 2.05.  Form of Trustee's Certificate of Authentication.........24

                           ARTICLE III The Securities

SECTION 3.01.  Title and Terms.........................................25
SECTION 3.02.  Denominations...........................................27
SECTION 3.03.  Execution, Authentication, Delivery and Dating..........27
SECTION 3.04.  Temporary Securities....................................29
SECTION 3.05.  Global Securities.......................................29
SECTION 3.06.  Registration, Transfer and Exchange Generally;
                  Certain Transfers and Exchanges; Restricted
                  Securities Legends...................................30
SECTION 3.07.  Mutilated, Destroyed, Lost and Stolen Securities........34
SECTION 3.08.  Payment of Interest; Interest Rights Preserved..........35
SECTION 3.09.  Persons Deemed Owners...................................36
SECTION 3.10.  Cancellation............................................37
SECTION 3.11.  Computation of Interest.................................37
SECTION 3.12.  Deferrals of Interest Payment Dates.....................37
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                                      -4-


SECTION 3.13.  Agreed Tax Treatment....................................38
SECTION 3.14.  CUSIP Numbers...........................................38

                      ARTICLE IV Satisfaction and Discharge

SECTION 4.01.  Satisfaction and Discharge of Indenture.................39
SECTION 4.02.  Application of Trust Money..............................40

                               ARTICLE V Remedies

SECTION 5.01.  Events of Default.......................................40
SECTION 5.02.  Acceleration of Maturity; Rescission and Annulment......41
SECTION 5.03.  Collection of Indebtedness and Suits for Enforcement by
                  Trustee..............................................43
SECTION 5.04.  Trustee May File Proofs of Claim........................44
SECTION 5.05.  Trustee May Enforce Claim Without Possession of
                  Securities...........................................45
SECTION 5.06.  Application of Money Collected..........................45
SECTION 5.07.  Limitation on Suits.....................................45
SECTION 5.08.  Unconditional Right of Holders to Receive Principal,
                  Premium and Interest.................................46
SECTION 5.09.  Restoration of Rights and Remedies......................46
SECTION 5.10.  Rights and Remedies Cumulative..........................47
SECTION 5.11.  Delay or Omission Not Waiver............................47
SECTION 5.12.  Control by Holders......................................47
SECTION 5.13.  Waiver of Past Defaults.................................48
SECTION 5.14.  Undertaking for Costs...................................48
SECTION 5.15.  Waiver of Usury, Stay or Extension Laws.................48
SECTION 5.16.  Option to Waive Certain Rights..........................49
SECTION 5.17.  Tax Treatment of the Junior Subordinated Debt
                  Securities...........................................49

                             ARTICLE VI The Trustee

SECTION 6.01.  Certain Duties and Responsibilities.....................49
SECTION 6.02.  Notice of Defaults......................................50
SECTION 6.03.  Certain Rights of Trustee...............................50
SECTION 6.04.  Not Responsible for Recitals or Issuance of
                  Securities...........................................51
SECTION 6.05.  May Hold Securities.....................................52
SECTION 6.06.  Money Held in Trust.....................................52
SECTION 6.07.  Compensation and Reimbursement..........................52
SECTION 6.08.  Disqualification; Conflicting Interests.................53
SECTION 6.09.  Corporate Trustee Required, Eligibility.................53
SECTION 6.10.  Resignation and Removal; Appointment of Successor.......53
SECTION 6.11.  Acceptance of Appointment by Successor..................55
SECTION 6.12.  Merger, Conversion, Consolidation or Succession to
                  Business.............................................56
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                                      -5-


SECTION 6.13.  Preferential Collection of Claims Against Company.......56
SECTION 6.14.  Appointment of Authenticating Agent.....................56
SECTION 6.15.  Trustee's Rights and Obligations After Qualification
                   of Indenture........................................58

                ARTICLE VII Holder's Lists and Reports by Trustee
                                   and Company

SECTION 7.01.  Company to Furnish Trustee Names and Addresses of
                  Holders..............................................58
SECTION 7.02.  Preservation of Information, Communications to
                  Holders..............................................58
SECTION 7.03.  Reports by Trustee......................................59
SECTION 7.04.  Reports by Company......................................59

                 ARTICLE VIII Consolidation, Merger, Conveyance,
                                Transfer or Lease

SECTION 8.01.  Company May Consolidate, etc., Only on Certain Terms....60
SECTION 8.02.  Successor Corporation Substituted.......................60

                       ARTICLE IX Supplemental Indentures

SECTION 9.01.  Supplemental Indentures without Consent of Holders......61
SECTION 9.02.  Supplemental Indentures with Consent of Holders.........62
SECTION 9.03.  Execution of Supplemental Indentures....................64
SECTION 9.04.  Effect of Supplemental Indentures.......................64
SECTION 9.05.  Conformity with Trust Indenture Act.....................64
SECTION 9.06.  Reference in Securities to Supplemental Indentures......64

                               ARTICLE X Covenants

SECTION 10.01.  Payment of Principal, Premium and Interest.............64
SECTION 10.02.  Maintenance of Office or Agency........................64
SECTION 10.03.  Money for Security Payments to be Held in Trust........65
SECTION 10.04.  Statement as to Compliance.............................66
SECTION 10.05.  Waiver of Certain Covenants............................67
SECTION 10.06.  Payment of the Trust's Costs and Expenses..............67
SECTION 10.07.  Additional Covenants...................................67
SECTION 10.08.  Information Returns....................................68

              ARTICLE XI Redemption or Prepayment of Securities

SECTION 11.01.  Applicability of this Article..........................68
SECTION 11.02.  Election to Redeem; Notice to Trustee..................69
SECTION 11.03.  Selection of Securities to be Redeemed.................69
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                                      -6-


SECTION 11.04.  Notice of Redemption...................................69
SECTION 11.05.  Deposit of Redemption Price............................70
SECTION 11.06.  Payment of Securities Called for Redemption............70
SECTION 11.07.  Company's Right of Redemption..........................71

                 ARTICLE XII Exchange and Registration Rights

SECTION 12.01.  Exchange...............................................71
SECTION 12.02.  Registration...........................................72
SECTION 12.03.  Liquidated Damages.....................................72
SECTION 12.04.  Compliance with Law....................................72

                           ARTICLE XIII Sinking Funds

SECTION 13.01.  Applicability of Article...............................73
SECTION 13.02.  Satisfaction of Sinking Fund Payments with
                  Securities...........................................73
SECTION 13.03.  Redemption of Securities for Sinking Fund..............73

                   ARTICLE XIV Subordination of Securities

SECTION 14.01.  Securities Subordinate to Senior Debt..................75
SECTION 14.02.  Payment Over of Proceeds Upon Dissolution, Etc.........75
SECTION 14.03.  Prior Payment to Senior Debt Upon Acceleration of
                  Securities...........................................76
SECTION 14.04.  No Payment When Senior Debt in Default.................77
SECTION 14.05.  Payment Permitted If No Default........................78
SECTION 14.06.  Subrogation to Rights of Holders of Senior Debt........78
SECTION 14.07.  Provisions Solely to Define Relative Rights............78
SECTION 14.08.  Trustee to Effectuate Subordination....................79
SECTION 14.09.  No Waiver of Subordination Provisions..................79
SECTION 14.10.  Notice to Trustee......................................79
SECTION 14.11.  Reliance on Judicial Order or Certificate of
                  Liquidating Agent....................................79
SECTION 14.12.  Trustee Not Fiduciary for Holders of Senior Debt.......80
SECTION 14.13.  Rights of Trustee as Holder of Senior Debt;
                  Preservation of Trustee's Rights.....................80
SECTION 14.14.  Article Applicable to Paying Agents....................80
SECTION 14.15.  Certain Conversions or Exchanges Deemed Payment........80
<PAGE>
                                      -7-


Exhibit A - Form of Restricted Securities Certificate
<PAGE>

                        JUNIOR SUBORDINATED INDENTURE, dated as of February 5,
                  1997 between U.S.B. HOLDING CO., INC., a bank holding company
                  established under the laws of Delaware (hereinafter called the
                  "Company") having its principal office at 100 Dutch Hill Road,
                  Orangeburg, New York 10962, and THE CHASE MANHATTAN BANK, a
                  New York banking corporation, as Trustee (hereinafter called
                  the "Trustee").

                             RECITALS OF THE COMPANY

            The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more business trusts (each a "U.S.B.H.
Capital Trust" and, collectively, the "U.S.B.H. Capital Trusts") of preferred
trust interests in such U.S.B.H. Capital Trusts (the "Capital Securities") and
common interests in such U.S.B.H. Capital Trusts (the "Common Securities" and,
collectively with the Capital Securities, the "Trust Securities"), and to
provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered.

            NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration
of the premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:

                                    ARTICLE I

             Definitions and Other Provisions of General Application

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

            (1) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular.

            (2) All other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein.

            (3) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the
<PAGE>
                                      -2-


date or time of such computation; provided, that when two or more principles are
so generally accepted, it shall mean that set of principles consistent with
those in use by the Company.

            (4) The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.

            "Act", when used with respect to any Holder, has the meaning
specified in Section 1.04.

            "Additional Interest" means the interest, if any, that shall accrue
on any interest on the Securities of any series the payment of which has not
been made on the applicable Interest Payment Date and which shall accrue at the
rate per annum specified or determined as specified in any Officers' Certificate
delivered pursuant to Section 3.01 of the Indenture.

            "Additional Sums" has the meaning specified in Section 10.06.

            "Adjusted Treasury Rate" means, with respect to any prepayment date,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date, in each case calculated on the third Business Day
preceding the prepayment date, plus in each case (a) if such prepayment is in
connection with a Tax Event, (1) 2.25% if such prepayment occurs on or prior to
February 1, 1998 and (2) 1.50% in all other cases, and (b) if such prepayment is
in connection with a Regulatory Capital Event, (1) 2.25% if such prepayment
occurs on or prior to February 1, 1998 and (2) 1.50% in all other cases.

            "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; provided, however, that an Affiliate of the
Company shall not be deemed to include any U.S.B.H. Capital Trust to which
Securities have been issued. 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.
<PAGE>
                                      -3-


            "Agent  Member"  means any  member  of,  or  participant  in,  the
Depositary.

            "Amended and Restated Declaration of Trust" for each series of
Securities has the meaning specified in the Officers' Certificate for such
series delivered pursuant to Section 3.01 of this Indenture.

            "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.

            "Board of Directors" means either the board of directors of the
Company or any committee of that board duly authorized to act hereunder.

            "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company 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 Trustee.

            "Business Day" means any day other than (i) a Saturday or Sunday,
(ii) 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 (iii) a day on which
the Corporate Trust Office of the Trustee, or, with respect to the Securities of
a series issued to a U.S.B.H. Capital Trust, the principal office of the
Property Trustee under the related Trust Agreement, is closed for business.

            "Capital Securities" has the meaning specified in the first recital
of this Indenture, and shall include, where appropriate, Exchange Capital
Securities as defined in Article XII.

            "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 under 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 on such date.

            "Common  Securities"  has  the  meaning  specified  in  the  first
recital of this Indenture.

            "Common  Stock" means the common  stock,  $5.00 par value,  of the
Company.

            "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

            "Company Request" and "Company Order" mean, respectively, the
written request or order signed in the name of the Company by the Chairman,
Chief Executive
<PAGE>
                                      -4-


Officer, President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee.

            "Comparable Treasury Issue" means the United States Treasury
security selected by the Quotation Agent as having a maturity comparable to the
Remaining Life of the Security to be prepaid that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity with the Remaining
Life of the Securities. If no United States Treasury Security has a maturity
which is within a period from three months before to three months after,
February 1, 2007, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Adjusted
Treasury Rate shall be interpolated or extrapolated on a straight-line basis,
rounding to the nearest month using such securities.

            "Comparable Treasury Price" means, with respect to any prepayment
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (a) the average
of five Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations,
or (b) if the Trustee obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.

            "Corporate  Trust  Office",  means  the  principal  office  of the
Trustee at which at any particular  time its corporate trust business shall be
administered,  which office as of the date of this Indenture is located at 450
West 33rd Street, 15th Floor, New York, New York 10001,  Attention:  Corporate
Trustee Administration Department.

            "Corporation"  includes  a  corporation,   association,   company,
joint-stock company or business trust.

            "Declaration of Trust" for each series of Securities has the meaning
specified in the Officers' Certificate for such series delivered pursuant to
Section 3.01 of this Indenture.

            "Debt" means (i) the principal of and premium, if any, and unpaid
interest on indebtedness for money borrowed, (ii) purchase money and similar
obligations, (iii) obligations under capital leases, (iv) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Company is responsible for the payment of, such indebtedness
of others, (v) renewals, extensions and refunding of any such indebtedness, (vi)
interest or obligations in respect of any such indebtedness accruing after the
commencement of any insolvency or bankruptcy proceedings and (vii) obligations
associated with derivative products such as interest rate and currency exchange
contracts, foreign exchange contracts, commodity contracts and similar
arrangements; provided, however, that
<PAGE>
                                      -5-


Debt shall not include trade accounts payable or accrued liabilities in the
ordinary course of business.

            "Defaulted Interest" has the meaning specified in Section 3.08.

            "Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.01 with respect to such series (or any successor thereto (a "Successor
Depositary")).

            "Discount Security" means any security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 5.02.

            "Dollar" means the currency of the United States of America that, as
at the time of payment, is legal tender for the payment of public and private
debts.

            "DTC" means The Depository Trust Company.

            "Event of Default", unless otherwise specified in the supplemental
indenture creating a series of Securities, has the meaning specified in Article
V.

            "Extension Period" has the meaning specified in Section 3.12.

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

            "Foreign Currency" means any currency issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.

            "Global Security" means a Security in the form prescribed in Section
2.04 evidencing all or part of a series of Securities, issued to the Depositary
of its nominee for such series, and registered in the name of such Depositary or
its nominee.

            "Guarantee Agreement" for each series of Securities has the meaning
specified in the Officers' Certificate for such series delivered pursuant to
Section 3.01 of this Indenture.

            "Holder"  means a Person in whose name a Security is registered in
the Securities Register.

            "Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.01.
<PAGE>
                                      -6-


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

            "Interest Payment Date" means as to each series of Securities the
Stated Maturity of an installment of interest on such Securities.

            "Interest Rate" means the rate of interest specified or determined
as specified in each Security as being the rate of interest payable on such
Security.

            "Junior Subordinated Payment" has the meaning specified in Section
14.02.

            "Lien" means any mortgage, pledge, lien, security interest or other
encumbrance.

            "Liquidation Amount" has the meaning specified in Section 1.01 of
the Trust Agreement.

            "Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether as the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.

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

            "Officers' Certificate" means a certificate signed by the Chairman
and Chief Executive Officer, President, or Vice President, and by the Treasurer,
the Controller, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company, and delivered to the Trustee, which certificate shall
comply with the provisions of Section 1.03 hereof.

            "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, which opinion shall comply with the provisions of
Section 1.03 hereof.

            "Original Issue Date" means the date of issuance specified as such
in each Security.

            "Other Debentures" means, with respect to any series of Securities,
all junior subordinated debt securities to be issued by the Company pursuant to
this Indenture, other than such series of Securities, with substantially similar
subordination terms, and which will be issued and sold (if at all) to any
U.S.B.H. Capital Trust established by the Company (if any), and will be
unsecured and subordinate and junior in right of payment to the extent and to
the manner set forth in this Indenture to all Senior Debt of the Company.

            "Other Guarantees" means, with respect to any series of Securities,
all guarantees (if any) to be issued by the Company with respect to Capital
Securities (if any) to be issued by any U.S.B.H. Capital Trust to be established
by the Company (if any), other than the guarantee related to such series of
Securities.
<PAGE>
                                      -7-


            "Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:

            (i) Securities theretofore canceled by the Trustee or delivered to
      the Trustee for cancellation;

           (ii) Securities for whose payment money in the necessary amount has
      been theretofore deposited with the Trustee or any Paying Agent in trust
      for the Holders of such Securities; and

          (iii) Securities in substitution for or in lieu of which other
      Securities have been authenticated and delivered or which have been paid
      pursuant to Section 3.07, unless proof satisfactory to the Trustee is
      presented that any such Securities are held by Holders in whose hands such
      Securities are valid, binding and legal obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible officer actually knows to
be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor. Upon the
written request of the Trustee, the Company shall furnish the Trustee promptly
an Officers' Certificate listing and identifying all Securities, if any, known
by the Company to be owned or held by or for the account of the Company, or any
other obligor on the Securities or any Affiliate of the Company or such obligor,
and, subject to the provisions of Section 6.01, the Trustee shall be entitled to
accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Securities not listed therein are Outstanding
for the purpose of any such determination.

            "Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of (or premium, if any) or interest on any
Securities on behalf of the Company.

            "Person" means any individual, Corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.

            "Place of Payment" means, with respect to the Securities of any
series, the place or places where the principal of (and premium, if any) and
interest on the Securities of such series are payable pursuant to Sections 3.01
and 3.11.
<PAGE>
                                      -8-


            "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
security authenticated and delivered under Section 3.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.

            "Proceeding" has the meaning specified in Section 14.02.

            "Property Trustee" means, in respect of any U.S.B.H. Capital Trust,
the commercial bank or trust company identified as the "Property Trustee" in the
related Trust Agreement, solely in its capacity as Property Trustee of such
U.S.B.H. Capital Trust under each Trust Agreement and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as therein provided.

            "Quotation Agent" means the Reference Treasury Dealer selected by
the Trustee to act as such after consultation with the Company.

            "Redemption Date", when used with respect to any Security of a
series to be redeemed, means the date fixed for such redemption by or pursuant
to this Indenture.

            "Reference Treasury Dealer" means a nationally-recognized U.S.
Government Securities dealer selected by the Trustee after consultation with the
Company and its respective successors.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Trustee, of the bid and asked prices at 5:00 p.m., New York City time, on
the third Business Day preceding such prepayment date for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer.

            "Regular Record Date" for the interest payable on any Interest
Payment Date with respect to the Securities of a series means, unless otherwise
provided pursuant to Section 3.01 with respect to Securities of a series, the
date which is the Business Day next preceding such Interest Payment Date.

            "Regulatory Capital Event" means the Company shall have received an
opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in the laws (or any regulations thereunder) of the
United States or any rules, guidelines or policies of the Federal Reserve Board
or (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
original issuance of the Capital Securities, the Capital Securities do not
constitute, or within 90 days of the date thereof, will not constitute, Tier 1
capital (or its then equivalent); provided, however, that the distribution of
the Securities in connection with the liquidation of the Trust by the
<PAGE>
                                      -9-


Company and the treatment thereafter of the Securities as other than Tier 1
capital shall not in and of itself constitute a Regulatory Capital Event unless
such liquidation shall have occurred in connection with a Tax Event.

            "Remaining Life" has the meaning specified in Section 2.03.

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

            "Restricted Security" means each Security required pursuant to
Section 3.06(c) hereof to bear a Restricted Securities Legend.

            "Restricted Securities Certificate" means a certificate
substantially in the form set forth in Exhibit A to this Indenture.

            "Restricted Securities Legend" means a legend substantially in the
form of the legend required in the form of Security set forth in Section 2.02 to
be placed on a Restricted Security.

            "Securities" or "Security" means any debt securities or debt
security, as the case may be, authenticated and delivered under this Indenture.

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

            "Securities Certificate" means a certificate evidencing ownership of
Securities.

            "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.06.

            "Senior Debt" with respect to any series of Securities means the
principal of (and premium, if any) and interest, if any (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not such claim for
post-petition interest is allowed in such proceeding), on Debt of the Company,
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Securities or the Other Debentures;
provided, however, that Senior Debt shall not be deemed to include (a) any Debt
of the Company which, when incurred and without respect to any election under
Section 1111(b) of the U.S. Bankruptcy Code of 1978, as amended, was without
recourse to the Company; (b) any Debt of the Company to any of its Subsidiaries;
(c) Debt to any employee of the Company; (d) Debt to the extent such debt is by
its terms is subordinated to trade accounts payable or accrued liabilities
arising in the ordinary course of business to the extent that payments made to
the holders of such Debt by the Holders as a result of the subordination
<PAGE>
                                      -10-


provisions of this Indenture would be greater than such payments otherwise would
have been as a result of any obligation of such holders of such Debt to pay
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of the
subordination provisions to which such Debt is subject; and (e) any other debt
securities issued pursuant to this Indenture.

            "Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.08.

            "Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified
pursuant to the terms of such Security as the date on which the principal of
such Security or such installment of interest is due and payable, in the case of
such principal, as such date may be shortened or extended as provided pursuant
to the terms of such Security and this Indenture.

            "Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For purposes of this definition, "voting stock" means stock which
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.

            "Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.07 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

            "Tax Event" means the receipt by the Company of an opinion of
independent counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced proposed change) in, the
laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
Original Issue Date of the applicable series of Securities or of the applicable
Capital Securities issued by the affected U.S.B.H. Capital Trust, there is more
than an insubstantial risk that (i) such U.S.B.H. Capital Trust is, or will be
within 90 days of the date of such opinion of independent counsel, subject to
United States Federal income tax with respect to income received or accrued on
such Securities, (ii) interest payable by the Company on such series of
Securities is not, or within 90 days of the date of such opinion of independent
counsel, will not be, deductible by the Company, in whole or in part, for United
States Federal income tax purposes, or (iii) such U.S.B.H. Capital Trust is, or
will be within 90 days of the date of such opinion of independent counsel,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
<PAGE>
                                      -11-


            "Trust Agreement" with respect to each series of Securities means
the Declaration of Trust with respect to such series, as amended by the Amended
and Restated Declaration of Trust with respect to such series.

            "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a Successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder and,
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.

            "Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S.C. ss.ss. 77aaa-77bbbb), as amended and as in effect on the date of this
Indenture, except as provided in Sections 1.07 and 9.05 hereof, provided that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939, as so amended.

            "Trust  Securities" has the meaning specified in the first recital
of this Indenture.

            "U.S.B.H.  Capital  Trust" has the meaning  specified in the first
recital of this Indenture.

            "U.S.B.  Holding Co., Inc.  Guarantee"  means the guarantee by the
Company of the  distributions  on the Trust  Securities of a U.S.B.H.  Capital
Trust to the extent of the Guarantee Agreement.

            "Vice President", when used with respect to the Company, means any
duly appointed vice president, whether or not designated by a number or a word
or words added before or after the title "vice president".

            SECTION 1.02. Compliance Certificate and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent (including covenants
compliance with which constitutes a condition precedent), if any, provided for
in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel that all such
conditions precedent (including covenants compliance with which constitute a
condition precedent), if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

            Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided regarding conditions or covenants waived by the Holders
pursuant to Section 10.05) shall include:
<PAGE>
                                      -12-


            (1) a statement that each individual signing such certificate or
      opinion has read such covenant or condition and the definitions herein
      relating thereto;

            (2) a brief statement as to the nature and scope of the examination
      or investigation upon which the statements or opinions contained in such
      certificate or opinion are based;

            (3) a statement that, in the opinion of each such individual, he has
      made such examination or investigation as is necessary to enable him to
      express an informed opinion as to whether or not such covenant or
      condition has been complied with; and

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

            SECTION 1.03. Forms of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or given an opinion as to such
matters in one or several documents.

            Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representation
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

            Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

            SECTION 1.04. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given to or taken by Holders, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments is or are delivered to the Trustee, and, where it
is hereby expressly required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a
<PAGE>
                                      -13-


writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

            (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any 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 Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.

            (c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.

            (d)   The  ownership  of   Securities   shall  be  proved  by  the
Securities Register.

            (e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.

            (f) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to take any action
under this Indenture by vote or consent. Except as otherwise provided herein,
such record date shall be the later of 30 days prior to the first solicitation
of such consent or vote or the date of the most recent list of Securityholders
furnished to the Trustee pursuant to Section 7.01 prior to such solicitation. If
a record date is fixed, those persons who were Securityholders at such record
date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any vote or consent
previously given, whether or not such persons continue to be Holders after such
record date, provided, however, that unless such vote or consent is obtained
from the Holders (or their duly designated proxies) of the requisite principal
amount of Outstanding Securities prior to the date which is the 120th day after
such record date, any such vote or consent previously given shall automatically
and without further action by any Holder be canceled and of no further effect.

            SECTION 1.05.     Notices,   Etc.  to  Trustee  and  Company.  Any
request, demand,  authorization,  direction, notice, consent, waiver or Act of
Holders or other  document  provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with:

            (1) the Trustee by any holder or by the Company shall be sufficient
      for every purpose hereunder if made, given, furnished or filed in writing
      to or with the Trustee at its Corporate Trust Office, or
<PAGE>
                                      -14-


            (2) the Company by the Trustee or by any Holder shall be sufficient
      for every purpose (except as otherwise provided in Section 5.01 hereof)
      hereunder if in writing and mailed, first class, postage prepaid, to the
      Company addressed to it at the address of its principal office specified
      in the first paragraph of this instrument or at any other address
      previously furnished in writing to the Trustee by the Company.

            SECTION 1.06. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Securities Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

            SECTION 1.07. Conflict with Trust Indenture Act. This Indenture will
not be qualified under the Trust Indenture Act except upon the effectiveness of
a registration statement as contemplated in Article XII hereof. If any provision
of this Indenture limits, qualifies or conflicts with the duties imposed by any
of Section 310 to 317, inclusive, of the Trust Indenture Act through operation
of Section 318(c) thereof, such imposed duties shall control.

            SECTION 1.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.

            SECTION 1.09. Successors and Assigns. All covenants and agreements
in this Indenture by the Company shall bind its successors and assigns, whether
so expressed or not.

            SECTION 1.10. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

            SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto, any Paying Agent and their successors and assigns, the holders
of Senior Debt and the Holders of the Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
<PAGE>
                                      -15-


            SECTION 1.12. Governing Law. This Indenture and the Securities shall
be governed by and construed in accordance with the laws of the State of New
York without regard to the conflicts of laws principles thereof.

            SECTION 1.13. Non-Business Days. In any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Security shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or the
Securities) payment of interest or principal need not be made on such date, but
may be made on the next succeeding Business Day (and no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be, until such next succeeding Business Day)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity, as the case may be, such payment was
originally payable.

                                   ARTICLE II

                                 Security Forms

            SECTION 2.01. Forms Generally. The Securities of each series and the
Trustee's certificate of authentication shall be in substantially the forms set
forth in this Article, or in such other form or forms as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable tax
laws or the rules of any securities exchange or as may, consistently herewith,
be determined by the officers executing such securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.03 with respect to
the authentication and delivery of such Securities.

            The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules or any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

            Securities distributed to holders of book-entry Capital Securities
shall be distributed in the form of one or more Global Securities registered in
the name of a Depositary or its nominee, and deposited with the Securities
Registrar, as custodian for such Depositary, or held by such Depositary for
credit by the Depositary to the respective accounts of the
<PAGE>
                                      -16-


beneficial owners of the Securities represented thereby (or such other accounts
they may direct). Securities distributed to holders of Capital Securities other
than book-entry Capital Securities shall not be issued in the form of a Global
Security or any other form intended to facilitate book-entry trading in
beneficial interests in such Securities.

            SECTION 2.02. Form of Face of Security.

            [If this Security is a Restricted Security, insert -- 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 CORPORATION'S AND THE 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 AMENDED AND RESTATED
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE CORPORATION OR
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTIONS TERMINATION DATE.]
<PAGE>
                                      -17-


                            U.S.B. HOLDING CO., INC.
                               (Title of Security)
No.                                                                    $

            U.S.B. HOLDING CO., INC., a corporation organized and existing under
the laws of Delaware (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ___________, or its registered assigns, the
principal sum of __________ Dollars on __________. The Company further promises
to pay interest on said principal sum from or from the most recent interest
payment date (each such date, an "Interest Payment Date") on which interest has
been paid or duly provided for, [monthly] (quarterly] [semi-annually] [if
applicable, insert--(subject to deferral as set forth herein)], in arrears on
[insert applicable Interest Payment Dates] of each year, commencing , at the
rate of % per annum, until the principal hereof shall have become due and
payable, [if applicable, insert--plus Additional Interest, if any,] until the
principal hereof is paid or duly provided for or made available for payment [if
applicable, insert--and on any overdue principal and (without duplication and to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the rate of % per annum, compounded
[monthly] [quarterly] [semi-annually] [annually] as Additional Interest]. The
amount of interest payable for any period shall be computed on the basis of
twelve 30-day months and a 360-day year. The amount of interest payable 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. In the event that any date on which
interest is payable on this Security is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), (except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case] with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean any day other than
(i) a Saturday or Sunday, (ii) 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 (iii) a day on which the Corporate Trust Office of the Trustee or the
Corporate Trust Office of the Property Trustee under the Trust Agreement
hereinafter referred to for U.S.B.H. Capital Trust is closed for business. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities, as
defined in the Indenture) is registered at the close of business on the Regular
Record Date for such interest installment, which shall be the [insert definition
of Regular Record Dates]. Any such interest installment not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this
<PAGE>
                                      -18-


series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.

            [If applicable, insert -- So long as no Event of Default has
occurred and is continuing, the Company shall have the right at any time during
the term of this Security, from time to time, to defer payment of interest on
such Security for up to _____ consecutive [monthly] [quarterly] [semi-annual]
interest payment periods with respect to each deferral period (each an
"Extension Period"), during which Extension Periods the Company shall have the
right to make partial payments of interest on any Interest Payment Date, and at
the end of which the Company shall pay all interest then accrued and unpaid
(together with Additional Interest thereon to the extent permitted by applicable
law); provided, however, that no Extension Period may extend beyond the Maturity
of this Security. During any such Extension Period, the Company will not (i)
declare or pay any dividends or distributions on or redeem, purchase, acquire or
make a liquidation payment with respect to, any of the Company's capital stock
(which includes common and preferred stock) or (ii) make any payment of
principal of, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company (including Other Debentures) that ranks pari
passu with or junior in interest to this Security or (iii) make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any Subsidiary of the Company (including Other Guarantees) if such guarantee
ranks pari passu with or junior in interest to this Security (other than (a)
dividends or distributions in Common Stock of the Company, (b) any declaration
of a dividend in connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (c) payments under
the applicable U.S.B. Holding Co., Inc. Guarantee, (d) purchases or acquisitions
of shares of the Company's Common Stock in connection with the satisfaction by
the Company of its obligations under any employee benefit plan or other
contractual obligation of the Company (other than a contractual obligation
ranking pari passu with or junior to these Securities), (e) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, or (f) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
Prior to the termination of any such Extension Period, the Company may further
extend such Extension Period, provided, however, that such extension does not
cause such Extension Period to exceed consecutive [monthly] [quarterly]
[semi-annual] interest payment periods or extend beyond the Maturity of this
Security. Upon the termination of any such Extension Period and the payment of
all accrued and unpaid interest and any Additional Interest then due, the
Company may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period
except at the end thereof. The Company shall give the Holder of this Security
and the Trustee notice of its election to begin any Extension Period at least
five Business Days prior to the Interest Payment Date, [if applicable,
insert--or, with respect to the Securities issued to a U.S.B.H. Capital Trust,
prior to the earlier of (i) the date the Distributions on the Capital Securities
would have been payable except for the election to begin or extend such
Extension Period or (ii) the date the Administrative Trustees are required to
give notice to any automated quotation
<PAGE>
                                      -19-


system or to holders of such Capital Securities of the record date or the date
such Distributions are payable, but in any event not less than five Business
Days prior to such record date]. There is no limitation on the number of times
the Company may elect to begin an Extension Period.

            Payment of the principal of (and premium, if any) and interest on
this Security will be made at the office or agency of the Company maintained for
that purpose in the United States, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert--; provided, however, that at the option of
the Company payment of any interest may be made (except Securities in Global
form) (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Securities Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Securities
Register].

            The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Debt, and this Security is issued subject to
the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
actions as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Debt, whether now outstanding or hereinafter incurred,
and waives reliance by each such holder upon said provisions.

            Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

            Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
<PAGE>
                                      -20-


            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.


Date:                                   U.S.B. HOLDING CO., INC.,


[Seal]
                                       By_________________________________
                                                  [Chairman and Chief
                                                  Executive Officer,
                                                     President or
                                                    Vice President]

Attest:

__________________________________
[Secretary or Assistant Secretary]

            SECTION 2.03. Form of Reverse of Security. This Security is one of a
duly authorized issue of securities of the Company (herein called the
"Securities"), issued and to be issued in one or more series under a Junior
Subordinated Indenture, dated as of February 5, 1997, [as supplemented by an
Officers' Certificate dated as of ____________, (herein called the "Indenture"),
between the Company and The Chase Manhattan Bank, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [, limited in aggregate principal amount to $        ].

            All terms used in this Security that are defined in the Indenture
[if applicable, insert--and in the Amended and Restated Declaration of Trust of
[insert the applicable U.S.B.H. Capital Trust     ], dated as of [     ] (the
"Amended and Restated Declaration of Trust") among U.S.B. Holding Co., Inc., as
Depositor, and the Trustees named therein,] shall have the meanings assigned to
them in the Indenture or, to the extent not defined in the Indenture, the
Amended and Restated Declaration of Trust, as the case may be.

            [If applicable, insert -- On or after the Company may at any time,
at its option, subject to the terms and conditions of Article XI of the
Indenture and subject to the Company having received prior approval of the
Federal Reserve if then required under applicable capital guidelines of the
Federal Reserve, redeem this Security in whole or in part at any time or from
time to time prior to maturity, at a redemption price (the "Optional Prepayment
Price") equal
<PAGE>
                                      -21-


to the following prices, expressed in percentages of the principal amount of the
Securities together with accrued but unpaid interest to but excluding the date
fixed for redemption. If redeemed during the 12-month period beginning
____________:

          Year                                         Redemption
                                                         Price
          ----                                         ----------

          [Insert year and redemption prices]


and at 100% on or after _____________.]

            [If applicable, insert -- If a Tax Event or a Regulatory Capital
Event (each a "Special Event") shall occur and be continuing prior to __________
__, ______, the Company may, at its option and subject to receipt of prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve, prepay the Securities within 90
days after the occurrence of such Special Event, in whole (but not in part), at
a prepayment price (the "Special Event Prepayment Price") equal to the greater
of (i) 100% of the principal amount of such Securities and (ii) the sum, as
determined by a Quotation Agent, of the present values of the principal amount
and premium payable as part of the Optional Prepayment Price with respect to an
optional redemption of such Securities on to __________ __, ______, together
with scheduled payments of interest accruing from the prepayment date to
__________ __, ______, (the "Remaining Life"), in each case discounted to the
prepayment date on a semiannual basis (assuming a 360-day year consisting of
30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued
interest thereon to the date of prepayment. In the case of redemption on or
after to __________ __, ______, following a Special Event, the Special Event
Prepayment Price shall equal the Optional Prepayment Price then applicable to a
redemption as described above.]

            In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.

            [If the Security is not a Discount Security, -- If an Event of
Default with respect to Securities of this series shall occur and be continuing,
the principal of this Security may be declared due and payable in the manner,
with the effect and subject to the conditions provided in the Indenture].

            [If the Security is a Discount Security, -- If an Event of Default
with respect to Securities of this series shall occur and be continuing, an
amount of principal of this Security may be declared due and payable in the
manner, with the effect and subject to the conditions provided in the Indenture.
Such amount shall be equal to [ -- insert formula for determining the amount].
Upon payment (i) of the amount of principal so declared due and payable and (ii)
<PAGE>
                                      -22-


of interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and
interest, if any, on this Security shall terminate.]

            The Indenture permits, with certain exceptions as therein provided,
the Company and the Trustee at any time to enter into a supplemental indenture
or indentures for the purpose of modifying in any manner the rights and
obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

            [If the Security is not a Discount Security, -- As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities of this series may
declare the principal amount of all the Securities of this series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), provided, however, that, in the case of the Securities of
this series issued to a U.S.B.H. Capital Trust, if upon an Event of Default, the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of this series fails to declare the principal of all the
Securities of this series to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of the corresponding series of Capital
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee. The Holders of a majority in aggregate principal amount
of the Outstanding Securities of these Securities may annul such declaration and
waive the default if the default (other than the non-payment of the principal of
these Securities which has become due solely by such acceleration) 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
Trustee. Should the Holders of these Securities fail to annul such declaration
and waive such default, the holders of a majority in aggregate Liquidation
Amount of the Capital Securities shall have such right. Upon any such
declaration such specified amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIV of the Indenture.]

            [If the Security is a Discount Security, -- As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or
<PAGE>
                                      -23-


the Holders of not less than such portion of the principal amount as may be
specified in the terms of this series of all the Securities of this series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), provided that, in the case of the Securities of
this series issued to a U.S.B.H. Capital Trust, if upon an Event of Default, the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of this series fails to declare the principal of all the
Securities of this series to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of the corresponding series of Capital
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee. The Holders of a majority in aggregate principal amount
of the Outstanding Securities of these Securities may annul such declaration and
waive the default if the default (other than the nonpayment of the principal of
these Securities which has become due solely by such acceleration) 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
Trustee. Should the Holders of these Securities fail to annul such declaration
and waive such default, the holders of a majority in aggregate Liquidation
Amount of the Capital Securities shall have such right. Upon any such
declaration such specified amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article XIII of the Indenture.]

            No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained pursuant to Section
10.02 of the Indenture duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Securities Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing
and thereupon one or more new Securities of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees. No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

            Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
shall treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
<PAGE>
                                      -24-


            The Securities of this series are issuable only in registered form
without coupons in denominations of $____________ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of such series of a different authorized
denomination, as requested by the Holder surrendering the same.

            The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security intend that such Security constitute indebtedness and
agree to treat such Security as indebtedness for all United States Federal,
state and local tax purposes.

            THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.

            SECTION 2.04. Additional Provisions Required in Global Security. Any
Global Security issued hereunder shall, in additional to the provisions
contained in Sections 2.02 and 2.03, bear a legend in substantially the
following form:

        "This Security is a Global Security within the meaning of the Indenture
      hereinafter referred to and is registered in the name of The Depository
      Trust Company (the "Depositary") or a nominee of the Depositary. This
      Security is exchangeable for Securities registered in the name of a person
      other than the Depositary or its nominee only in the limited circumstances
      described in the Indenture and no transfer of this Security (other than a
      transfer of this Security as a whole by 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 limited
      circumstances.

      Unless this Security is presented by an authorized representative of The
      Depositary Trust Company (55 Water Street, New York) to U.S.B. Holding
      Co., Inc. or its agent for registration of transfer, exchange or payment,
      and any Security issued is registered in the name of Cede & Co. or such
      other name as requested by an authorized representative of The Depository
      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."

            SECTION 2.05. Form of Trustee's Certificate of Authentication. This
is one of the Securities referred to in the within mentioned Indenture:

                                       THE CHASE MANHATTAN BANK
                                       as Trustee


                                       By:__________________________________
                                                 Authorized Officer
<PAGE>
                                      -25-


                                   ARTICLE III

                                 The Securities

            SECTION 3.01. Title and Terms.  The aggregate  principal amount of
Securities  which may be  authenticated  and delivered under this Indenture is
unlimited.

            The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:

            (a) the title of the securities of such series, which shall
      distinguish the Securities of the series from all other Securities;

            (b) the limit, if any, upon the aggregate principal amount of the
      Securities of such series which may be authenticated and delivered under
      this Indenture (except for Securities authenticated and delivered upon
      registration of transfer of, or in exchange for, or in lieu of, other
      Securities of the series pursuant to Section 3.04, 3.06, 3.07, 9.06 or
      11.06); provided, however, that the authorized aggregate principal amount
      of such series may be increased above such amount by a Board Resolution to
      such effect;

            (c) the Stated Maturity or Maturities on which the principal of the
      Securities of such series is payable or the method of determination
      thereof;

            (d) the rate or rates, if any, at which the Securities of such
      series shall bear interest, if any, the rate or rates and extent to which
      Additional Interest, if any, shall be payable in respect of any Securities
      of such series, the Interest Payment Dates on which such interest shall be
      payable, the right, pursuant to Section 3.12 or as otherwise set forth
      therein, of the Company to defer or extend an Interest Payment Date, and
      the Regular Record Date for the interest payable on any Interest Payment
      Date or the method by which any of the foregoing shall be determined;

            (e) the place or places where the principal of (and premium, if any)
      and interest on the Securities of such series shall be payable, the place
      or places where the Securities of such series may be presented for
      registration of transfer or exchange, and the place or places where
      notices and demands to or upon the Company in respect of the Securities of
      such series may be made;

            (f) the period or periods within or the date or date on which, if
      any, the price or prices at which and the terms and conditions upon which
      the Securities of such series may be redeemed, in whole or in part, at the
      option of the Company;

            (g) the obligation or the right, if any, of the Company to redeem,
      repay or purchase the Securities of such series pursuant to any sinking
      fund, amortization or analogous provisions, or at the option of a Holder
      thereof, and the period or periods within which, the prices or prices at
      which, the currency or currencies (including
<PAGE>
                                      -26-


      currency unit or units) in which and the other terms and conditions upon
      which Securities of the series shall be redeemed, repaid or purchased, in
      whole or in part, pursuant to such obligations;

            (h) the denominations in which any Securities of such series shall
      be issuable, if other than denominations of $1,000 and any integral
      multiple thereof;

            (i) if other than Dollars, the currency or currencies (including
      currency unit or units) in which the principal of (and premium, if any)
      and interest, if any, on the Securities of the series shall be payable, or
      in which the Securities of the series shall be denominated and the manner
      of determining the equivalent thereof in Dollars for purposes of the
      definition of the term "Outstanding";

            (j) the additions, modifications or deletions, if any, in the Events
      of Default or covenants of the Company set forth herein with respect to
      the Securities of such series;

            (k) if other than the principal amount thereof, the portion of the
      principal amount of Securities of such series that shall be payable upon
      declaration of acceleration of the Maturity thereof;

            (l) the additions or changes, if any, to this Indenture with respect
      to the Securities of such series as shall be necessary to permit or
      facilitate the issuance of the Securities of such series in bearer form,
      registrable or not registrable as to principal, and with or without
      interest coupons;

            (m) any index or indices used to determine the amount of payments of
      principal of and premium, if any, on the Securities of such series or the
      manner in which such amounts will be determined;

            (n) the issuance of a temporary Global Security representing all of
      the Securities of such series and exchange of such temporary Global
      Security for definitive Securities of such series;

            (o) whether the Securities of the series shall be issued in whole or
      in part in the form of one or more Global Securities and, in such case,
      the Depositary for such Global Securities, which Depositary shall be a
      clearing agency registered under the Securities Exchange Act of 1934, as
      amended;

            (p) the appointment of any Paying Agent or Agents for the Securities
      of such series;

            (q) the terms of any right to convert or exchange Securities of such
      series into any other securities or property of the Company, and the
      additions or changes, if any, to this Indenture with respect to the
      Securities of such series to permit or facilitate such conversion or
      exchange;
<PAGE>
                                      -27-


            (r) the transfer restrictions and legends required to be on the
      Securities;

            (s) the definitions of Amended and Restated Declaration of Trust,
      Declaration of Trust and Guarantee Agreement for each series;

            (t) the relative degree, if any, to which the Securities of the
      series shall be senior to or be subordinated to other series of Securities
      in right of payment, whether such other series of Securities are
      Outstanding or not; and

            (u) any other terms of the Securities of such series (which terms
      shall not be inconsistent with the provisions of this Indenture).

            All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth in such Officers' Certificate
or in any such indenture supplemental hereto.

            Unless otherwise provided with respect to the Securities of any
series, at the option of the Company, interest on the Securities of any series
that bears interest may be paid by (i) by mailing a check to the address of the
person entitled thereto as such address shall appear in the Securities Register
or (ii) by wire transfer in immediately available funds at such place and to
such account as may be designated by the person entitled thereto as specified in
the Securities Register.

            SECTION 3.02. Denominations. The Securities of each series shall be
in registered form without coupons and shall be issuable in denominations of
$1,000 and any integral multiple thereof, unless otherwise specified as
contemplated by Section 3.01.

            SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents under its corporate seal
reproduced or impressed thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.

            Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities executed by the Company to the Trustee for authentication. Securities
may be authenticated on original issuance from time to time and delivered
pursuant to such procedures acceptable to the Trustee ("Procedures") as may be
specified from time to time by Company Order. Procedures may authorize
authentication and delivery pursuant to oral instructions of the Company or a
duly authorized agent, which instructions shall be promptly confirmed in
writing.
<PAGE>
                                      -28-


            Prior to the delivery of a Security in any such form to the Trustee
for authentication, the Company shall deliver to the Trustee the following:

            (a) a Company Order requesting the Trustee's authentication and
      delivery of all or a portion of the Securities of such series, and if less
      than all, setting forth procedures for such authentication;

            (b) the Board Resolution by or pursuant to which such form of
      Security has been approved, and the Board Resolution, if any, by or
      pursuant to which the terms of the Securities of such series have been
      approved, and, if pursuant to a Board Resolution, an Officers' Certificate
      describing the action taken;

            (c) an Officers' Certificate dated the date such certificate is
      delivered to the Trustee, stating that all conditions precedent provided
      for in this Indenture relating to the authentication and delivery of
      Securities in such form and with such terms have been complied with; and

            (d) an Opinion of Counsel substantially to the effect that (i) the
      form of such Securities has been duly authorized and approved in
      conformity with the provisions of this Indenture; (ii) the terms of such
      Securities have been duly authorized and determined in conformity with the
      provisions of this Indenture, or, if such terms are to be determined
      pursuant to Procedures, as defined above, when so determined such terms
      shall have been duly authorized and determined in conformity with the
      provisions of this Indenture; and (iii) Securities in such form when
      completed by appropriate insertions and executed and delivered by the
      Company to the Trustee for authentication in accordance with this
      Indenture, authenticated and delivered by the Trustee in accordance with
      this Indenture within the authorization as to aggregate principal amount
      established from time to time by the Board of Directors and sold in the
      manner specified in such Opinion of Counsel, will be the legal, valid and
      binding obligations of the Company entitled to the benefits of this
      Indenture, subject to applicable bankruptcy, reorganization, insolvency
      and similar laws generally affecting creditors, rights, to general
      equitable principles and except as enforcement thereof may be limited by
      (A) requirements that a claim with respect to any Securities denominated
      other than in Dollars (or a Foreign Currency or currency unit judgment in
      respect of such claim) be converted into Dollars at a rate of exchange
      prevailing on a date determined pursuant to applicable law or (B)
      governmental authority to limit, delay or prohibit the making of payments
      in Foreign Currencies or currency units or payments outside the United
      States, and subject to such other qualifications as such counsel shall
      conclude do not materially affect the rights of Holders of such
      Securities.

            The Trustee shall be entitled to receive the documents referred to
in clauses (b) and (d) above only at or prior to the first request of the
Company to the Trustee to authenticate Securities of such series.

            Each Security shall be dated the date of its authentication.
<PAGE>
                                      -29-


            No Security shall be entitled to any benefit under this Indenture,
or be valid or obligatory for any purpose, unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.

            SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Securities of such
series in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.

            If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations having the
same Original Issue Date and Stated Maturity and having the same terms as such
temporary Securities. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.

            SECTION 3.05. Global Securities. (a) Each Global Security issued
under this Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Security for all purposes of
this Indenture.

            (b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (a) such Depositary advises the Trustee in writing that such
Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Company is unable to locate a qualified successor, (b) the Company executes and
delivers to the Trustee a Company Order stating that the Company elects to
terminate the book-entry system through the Depositary, (c) there shall have
occurred and be continuing an Event of Default or (d) pursuant to the following
sentence. All or any portion of a Global Security may be exchanged for a
Security that has a like aggregate principal amount and is not a Global
<PAGE>
                                      -30-


Security upon 20 days' prior request made by the Depositary or its Agent Member
to the Securities Registrar.

            (c) If any Global Security is to be exchanged for other Securities
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Securities Registrar for exchange or cancellation as
provided in this Article III. If any Global Security is to be exchanged for
other Securities or canceled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, then
either (i) such Global Security shall be so surrendered for exchange or
cancellation as provided in this Article III or (ii) the principal amount
thereof shall be reduced, subject to Section 3.06(b)(iv), or increased by an
amount equal to the portion thereof to be so exchanged or canceled, or equal to
the principal amount of such other 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 Securities Registrar, whereupon the Trustee shall instruct
the Depositary or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of a Global
Security by the Depositary, accompanied by registration instructions and, to the
extent required by Section 3.06, a Restricted Securities Certificate, the
Trustee shall, subject to Section 3.05(b) and as otherwise provided in this
Article III, authenticate and deliver any Securities issuable in exchange for
such Global Security (or any portion thereof) in accordance with the
instructions of the Depositary. The Trustee shall not be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be fully
protected in relying on, such instructions.

            (d) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interest pursuant to the rules and procedures of
the Depositary. Accordingly, any such owner's beneficial interests in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members. Neither the Trustee nor the Securities Registrar shall have
any liability in respect of any transfers effected by the Depositary.

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

            SECTION 3.06. Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges; Restricted Securities Legends. (a) The Company shall
cause to be kept at the Corporate Trust Office of the Trustee a register in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of the Securities and of transfers of
Securities. Such register is herein sometimes referred to as the "Securities
Register". The Trustee is hereby appointed "Securities Registrar" for the
purpose of registering the Securities and transfers of Securities as herein
provided.
<PAGE>
                                      -31-


            Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated for that purpose the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of a like aggregate principal amount, of
the same Original Issue Date and Stated Maturity and having the same terms.

            At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.

            All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

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

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

            Neither the Company nor the Trustee shall be required, pursuant to
the provisions of this Section, (a) to issue, register any transfer or exchange
any Security of any series during a period beginning at the opening of business
15 days before the day of selection for redemption of Securities pursuant to
Article XI and ending at the close of business on the day of mailing of notice
of redemption or (b) to transfer or exchange any Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, any portion thereof not to be redeemed.

            (b) Certain Transfers and Exchanges. Notwithstanding any other
provision of the Indenture, the registration of transfers and exchanges of
Securities and beneficial interests in a Global Capital Security of the kinds
specified in this Section 3.06(b) shall be made only in accordance with this
Section 3.06(b).

             (i) Non-Global Security to Global Security. if the Holder of a
Security (other than a Global Security) wishes at any time to transfer all or
any portion of such Security to a Person who wishes to take delivery thereof in
the form of a beneficial interest in a Global
<PAGE>
                                      -32-


Security, the registration of such transfer may be effected only in accordance
with the provisions of this clause (b)(i) and subject to the rules and
procedures of the Depositary. Upon receipt by the Securities Registrar of (A)
such Security as provided in Section 3.06(a) and instructions satisfactory to
the Securities Registrar directing that a beneficial interest in the Global
Security in a specified principal amount not greater than the principal amount
of such Security be credited to a specified Agent Member's account and (B) a
Securities Certificate duly executed by such Holder or such Holder's attorney
duly authorized in writing, then the Securities Registrar shall cancel such
Security (and issue a new Security in respect of the untransferred portion
thereof) as provided in Section 3.06(a) and increase the aggregate principal
amount of the Global Security by the specified principal amount as provided in
Section 3.05(c).

            (ii) Non-Global Security to Non-Global Security. A Security that is
not a Global Security may be transferred, in whole or in part, to a Person who
takes delivery in the form of another Security that is not a Global Security as
provided in Section 3.06(a); provided, that in connection with the registration
of transfer of such Security that is a Restricted Security, the Securities
Registrar shall have received a Restricted Securities Certificate duly executed
by the transferor Holder or such Holder's attorney duly authorized in writing.

           (iii) Exchanges  between Global Security and Non-Global  Security.
A beneficial  interest in a Global  Security  may be exchanged  for a Security
that is not a Global Security as provided in Section 3.05.

            (iv) Limitations Relating to Principal Amount. Notwithstanding any
other provision of this Indenture and unless otherwise specified as permitted by
Section 3.01, Securities or portions thereof may be registered for transfer or
exchanged only in blocks having an aggregate principal amount of not less than
$100,000 and integral multiples of $1,000 in excess thereof. Any transfer,
exchange or other disposition of Securities in contravention of this Section
3.06(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 Securities for any purpose, including but not limited to the
receipt of interest payable on such Securities, and such transferee shall be
deemed to have no interest whatsoever in such Securities.

            (c)   Restricted  Securities  Legend.  (i)  Except  as  set  forth
below, all Securities shall bear a Restricted Securities Legend, as follows:

      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
<PAGE>
                                      -33-


      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 CORPORATION'S AND THE
      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 AMENDED AND RESTATED DECLARATION OF TRUST, A COPY OF
      WHICH MAY BE OBTAINED FROM THE CORPORATION OR THE TRUSTEE. THIS LEGEND
      WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTIONS
      TERMINATION DATE.

            (ii) Subject to Section 3.06(d) and to the following clauses of this
      Section 3.06(c), a Security (other than a Global Security) that does not
      bear a Restricted Securities Legend may be issued in exchange for or in
      lieu of a Restricted Security or any portion thereof that bears such
      legend if, in the Company's judgment, placing such a legend upon such new
      Security is not necessary to ensure compliance with the registration
      requirements of the Securities Act, and the Trustee, at the written
      direction of the Company in the form of an Officers' Certificate, shall
      countersign and deliver such a new Security as provided in this Article
      III.

           (iii) Notwithstanding the foregoing provisions of this Section
      3.06(c), a successor Security of a Security that does not bear a
      Restricted Securities Legend shall not bear such form of legend unless the
      Company has reasonable cause to believe that
<PAGE>
                                      -34-


      such successor Security is a "restricted security" within the meaning of
      Rule 144 under the Securities Act, in which case the Trustee, at the
      written direction of the Company in the form of an Officers' Certificate,
      shall countersign and deliver a new Security bearing a Restricted
      Securities Legend in exchange for such successor Security as provided in
      this Article III.

            (iv) Upon any sale or transfer of a Restricted Security (including
      any Restricted Security represented by a Global 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 Security that is a definitive
      Security, the Securities Registrar shall permit the Holder thereof to
      exchange such Restricted Security for a definitive Security that does not
      bear the Restricted Securities Legend and rescind the restriction on
      transfer of such Restricted Security; and (B) in the case of any
      Restricted Security that is represented by a Global Security, the
      Securities Registrar shall permit the Holder of such Global Security to
      exchange such Global Security for another Global Security that does not
      bear the Restricted Securities Legend.

             (v) If Restricted Securities are being presented or surrendered for
      transfer or exchange then there shall be (if so required by the Trustee),
      (A) if such Restricted 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 Securities are being transferred, (i) a certification from the
      transferor in a form substantially similar to that attached hereto as
      Exhibit A, and (ii) if the Company or Securities Registrar so requests,
      evidence reasonably satisfactory to them as to the compliance with the
      restrictions set forth in the Restricted Securities Legend.

            SECTION 3.07. Mutilated, Destroyed, Lost and Stolen Securities. If
any mutilated Security is surrendered to the Trustee together with such security
or indemnity as may be required by the Company or the Trustee to save each of
them harmless, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same issue and series of like
tenor and principal amount, having the same Original Issue Date and Stated
Maturity and bearing the same Interest Rate as such mutilated Security, and
bearing a number not contemporaneously outstanding.

            If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
issuing Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such destroyed, lost or stolen Security, and
bearing a number not contemporaneously outstanding.
<PAGE>
                                      -35-


            In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

            Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

            Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.

            The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

            SECTION 3.08. Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date, shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest
in respect of Securities of such series, except that, unless otherwise provided
in the Securities of such series, interest payable on the Stated Maturity of a
Security shall be paid to the Person to whom principal is paid. The initial
payment of interest on any Security of any series which is issued between a
Regular Record Date and the related Interest Payment Date shall be payable as
provided in such Security or in the Board Resolution pursuant to Section 3.01
with respect to the related series of Securities.

            Any interest on any Security which is payable, but is not timely
paid or duly provided for, on any Interest Payment Date for Securities of such
series (herein called "Defaulted Interest"), shall forthwith cease to be payable
to the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:

            (1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed
<PAGE>
                                      -36-


payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall not be more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be mailed, first
class, postage prepaid, to each Holder of a Security of such series at the
address of such Holder as it appears in the Securities Register not less than 10
days prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the expense of the Company, cause a similar notice to be
published at least once in a newspaper, customarily published in the English
language on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, but such publication shall not be a condition
precedent to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered on such Special Date and shall no longer
be payable pursuant to the following Clause (2).

            (2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of the series in respect of which interest is
in default may be listed and, upon such notice as may be required by such
exchange (or by the Trustee if the Securities are not listed), if, after notice
given by the Company to the Trustee of the proposed payment pursuant to this
Clause, such payment shall be deemed practicable by the Trustee.

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

            SECTION 3.09. Persons Deemed Owners. The Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 3.08) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. No holder of any
beneficial interest in any Global Security held on its behalf by a Depositary
shall have any rights under this Indenture with respect to such Global Security,
and such Depositary may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company or the Trustee from giving effect to any written certification, proxy,
or other authorization furnished by a Depositary or impair, as between the
Depositary and such holders of beneficial interests, the operation of customary
practices
<PAGE>
                                      -37-


governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.

            SECTION 3.10. Cancellation. All Securities surrendered for payment,
redemption, transfer or exchange shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee, and any such Securities and Securities
surrendered directly to the Trustee for any such purpose shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities shall be destroyed by the Trustee and the Trustee shall deliver to
the Company a certificate of such destruction.

            SECTION 3.11. Computation of Interest. Except as otherwise specified
as contemplated by Section 3.01 for Securities of any series, interest on the
Securities of each series for any period shall be computed on the basis of a
360-day year of twelve 30-day months and interest on the Securities of each
series 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.

            SECTION 3.12. Deferrals of Interest Payment Dates. If specified as
contemplated by Section 3.01 with respect to the Securities of a particular
series, provided that no Event of Default has occurred and is continuing with
respect to the Securities, the Company shall have the right, at any time or from
time to time during the term of such series, to defer the payment of interest on
such Securities for such period or periods as may be specified as contemplated
by Section 3.01 (each, an "Extension Period") during which Extension Periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date. No Extension Period shall end on a date other than an
Interest Payment Date. At the end of any such Extension Period the Company shall
pay all interest then accrued and unpaid on the Securities (together with
Additional Interest thereon, if any, at the rate specified for the Securities of
such series to the extent permitted by applicable law), provided, however, that
no Extension Period may extend beyond the Maturity of these Securities. During
any such Extension Period, the Company shall not (i) declare or pay dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's capital stock (which includes common and
preferred stock), or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company
(including Other Debentures) that rank pari passu with or junior in interest to
the Securities of such series or (iii) make any guarantee payments with respect
to any guarantee by the Company of the debt securities of any Subsidiary of the
Company (including Other Guarantees) if such guarantee ranks pari passu with or
junior in interest to the Securities of such series (other than (a) dividends or
distributions in common stock of the Company, (b) any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
applicable U.S.B. Holding Co., Inc. Guarantee, (d) purchases or acquisitions of
shares of the
<PAGE>
                                      -38-


Company's Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or other contractual obligation of
the Company (other than a contractual obligation ranking pari passu with or
junior to these Securities, (e) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, or (f) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged). Prior to the termination of
any such Extension Period, the Company may further extend such Extension Period;
provided, however, that no Extension Period shall exceed the period or periods
specified in such Securities or extend beyond the Maturity of such Securities.
Upon termination of any Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Company shall give the Holders of the
Securities of such series and the Trustee and the Property Trustee notice of its
election to begin any such Extension Period (or an extension thereof) at least
five Business Days prior to the Interest Payment Date or, with respect to the
Securities of a series issued to a U.S.B.H. Capital Trust, prior to the earlier
of (i) the date the Distributions on the Trust Securities of such U.S.B.H.
Capital Trust would have been payable except for the election to begin or extend
such Extension Period or (ii) the date the Administrative Trustees of such
U.S.B.H. Capital Trust are required to give notice to any automated quotation
system or to holders of Trust Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. There is no limitation on the number of times that
the Company may elect to begin an Extension Period.

            SECTION 3.13. Agreed Tax Treatment. Each Security issued hereunder
shall provide that the Company and, by its acceptance of a Security or a
beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Security intend that such Security constitute
indebtedness and agree to treat such Security as indebtedness for all United
States federal, state and local tax purposes.

            SECTION 3.14. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption or other related material as
a convenience to Holders; provided, however, that any such notice or other
related material may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a redemption or other related material and that reliance may be placed
only on the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the CUSIP numbers.
<PAGE>
                                      -39-


                                   ARTICLE IV

                           Satisfaction and Discharge

            SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect (except as to (i) any surviving
rights of transfer, substitution and exchange of Securities, (ii) rights
hereunder of Holders to receive payments of principal of (and premium, if any)
and interest on the Securities and other rights, duties and obligations of the
Holders as beneficiaries hereof with respect to the amounts, if any, deposited
with the Trustee pursuant to this Article IV and (iii) the rights and
obligations of the Trustee hereunder), and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

            (1) either

                  (A) all Securities theretofore authenticated and delivered
            (other than (i) Securities which have been destroyed, lost or stolen
            and which have been replaced or paid as provided in Section 3.07 and
            (ii) Securities for whose payment money has theretofore been
            deposited in trust or segregated and held in trust by the Company
            and thereafter repaid to the Company or discharged from such trust,
            as provided in Section 10.03) have been delivered to the Trustee for
            cancellation; or

                  (B) all such Securities not theretofore delivered to the
            Trustee for cancellation

                        (i) have become due and payable, or

                       (ii) will become due and payable at their Stated
                  Maturity within one year of the date of deposit,

      and the Company, in the case of Clause (B)(i) or (B)(ii) above, has
      deposited or caused to be deposited with the Trustee as trust funds in
      trust for such purpose an amount in the currency or currencies in which
      the Securities of such series are payable sufficient to pay and discharge
      the entire indebtedness on such Securities not theretofore delivered to
      the Trustee for cancellation, for principal (and premium, if any) and
      interest (including any Additional Interest) to the date of such deposit
      (in the case of Securities which have become due and payable) or to the
      Stated Maturity;

            (2) the Company has paid or caused to be paid all other sums payable
      hereunder by the Company; and

            (3) the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel each stating that all conditions
      precedent herein provided for relating to the satisfaction and discharge
      of this Indenture have been complied with.
<PAGE>
                                      -40-


Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.

            SECTION 4.02. Application of Trust Money. Subject to the provisions
of the last paragraph of Section 10.03, all money deposited with the Trustee
pursuant to Section 4.01, shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for the
payment of which such money or obligations have been deposited with or received
by the Trustee; provided, however, that such moneys need not be segregated from
other funds except to the extent required by law.

                                    ARTICLE V

                                    Remedies

            SECTION 5.01. Events of Default. "Event of Default", wherever used
herein with respect to the Securities of any series, 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):

            (1) default in the payment of any interest upon any Security of that
      series, including any Additional Interest in respect thereof, when it
      becomes due and payable, and continuance of such default for a period of
      30 days (subject to the deferral of any due date in the case of an
      Extension Period); or

            (2) default in the payment of the principal of (or premium, if any,
      on) any Security of that series when due, whether at its Maturity, upon
      redemption, by declaration of acceleration or otherwise; or

            (3) default in the performance or breach of any covenant or warranty
      of the Company in this Indenture (other than a covenant or warranty a
      default in the performance of which or the breach of which is elsewhere in
      this Section specifically dealt with), and continuance of such default or
      breach for a period of 90 days after there has been given, by registered
      or certified mail, to the Company by the Trustee or to the Company and the
      Trustee by the Holders of at least 25% in aggregate outstanding principal
      amount of the Securities of that series a written notice specifying such
      default or breach and requiring it to be remedied; or

            (4) the entry or a decree or order by a court having jurisdiction in
      the premises adjudging the Company a bankrupt or insolvent, or approving
      as properly
<PAGE>
                                      -41-


      filed a petition seeking reorganization, arrangement, adjustment or
      composition of or in respect of the Company 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 the Company 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

            (5) the institution by the Company 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 other similar official) of the Company or of any
      substantial part of its property, or the making by it of an assignment for
      the benefit for 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 the Company in furtherance of any such action; or

            (6) in respect of a series issued to a U.S.B.H. Capital Trust, the
      voluntary or involuntary dissolution, winding-up or termination of a
      U.S.B.H. Capital Trust, except in connection with the distribution of the
      Securities to the holders of Trust Securities in liquidation of such
      U.S.B.H. Capital Trust, the redemption of all the Trust Securities of a
      U.S.B.H. Capital Trust, or certain mergers, consolidations or
      amalgamations, each as permitted by the applicable Trust Agreement; or

            (7) any other Event of Default with respect to Securities of that
      series as may be specified pursuant to Section 3.01 hereof.

            SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided, however, that, in
the case of the Securities of a series issued to a U.S.B.H. Capital Trust, if,
upon an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series fail to declare
the principal of all the Securities of that series to be immediately due and
payable, the holders of at least 25% in aggregate Liquidation Amount of the
corresponding series of Capital Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee. The Holders of a
majority in aggregate principal amount of the Outstanding Securities of these
Securities may annul such declaration and waive the default if the default
(other than the
<PAGE>
                                      -42-


nonpayment of the principal of these Securities which has become due solely by
such acceleration) 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 Trustee. Should the Holders of these Securities fail to
annul such declaration and waive such default, the holders of a majority in
aggregate Liquidation Amount of the Capital Securities shall have such right.
Upon any such declaration such principal amount (or specified amount) of and the
accrued interest (including any Additional Interest) on all the Securities of
such series shall become immediately due and payable, provided, however, that
the payment of principal and interest (including any Additional Interest) on
such Securities shall remain subordinated to the extent provided in Article
XIII.

            At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:

            (1) the Company has paid or deposited with the Trustee a sum
      sufficient to pay:

                  (A) all overdue installments of interest (including any
            Additional Interest) on all Securities of that series,

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

                  (C) all sums paid or advanced by the Trustee hereunder and the
            reasonable compensation, expenses, disbursements and advances of the
            Trustee, its agents and counsel.

            (2) all Events of Default with respect to Securities of that series,
      other than the nonpayment of the principal of Securities of that series
      which has become due solely by such acceleration, have been cured or
      waived as provided in Section 5.13.

            The Holders of a majority in aggregate outstanding principal amount
of the Securities of a series affected thereby may, on behalf of the Holders of
all the Securities of such series, waive any past default, except a default in
the payment of principal of (or premium, if any) 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 Trustee) or a default in respect of a covenant or provision which under
this Indenture cannot be modified or amended without the consent of the Holder
of each outstanding Security of such series and, in the case of Securities of a
series issued to a U.S.B.H. Capital Trust, should the holders of such Securities
fail to annul such declaration and waive such default, the holders of a majority
in aggregate Liquidation Amount of the related series of Capital Securities
shall have such right. The Company is required to file
<PAGE>
                                      -43-


annually with the Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under this
Indenture.

            No such recession shall affect any subsequent default or impair any
right consequent thereon.

            Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the 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, however, that, unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such notice
prior to the day 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, 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 5.02.

            SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee. The Company covenants that if:

            (1) default is made in the payment of any installment of interest
      (including any Additional Interest) on any Security when such interest
      becomes due and payable and such default continues for a period of 30
      days, or

            (2) default is made in the payment of the principal of (and premium,
      if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal, including any sinking fund payment or
analogous obligations (and premium, if any) and interest (including any
Additional Interest); and, in addition thereto, all amounts owing to the Trustee
under Section 6.07 and Section 10.06.

            If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner
<PAGE>
                                      -44-


provided by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.

            If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

            SECTION 5.04. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors,

            (a) the Trustee (irrespective of whether the principal of the
      Securities of any series shall then be due and payable as therein
      expressed or by declaration or otherwise and irrespective of whether the
      Trustee shall have made any demand on the Company for the payment of
      overdue principal (and premium, if any) or interest (including any
      Additional Interest)) shall be entitled and empowered, by intervention in
      such proceeding or otherwise,

                  (i) to file and prove a claim for the whole amount of
            principal (and premium, if any) and interest (including any
            Additional Interest) owing and unpaid in respect to the Securities
            and to file such other papers or documents as may be necessary or
            advisable and to take any and all actions as are authorized under
            the Trust Indenture Act in order to have the claims of the Holders
            and any predecessor to the Trustee under Section 6.07 and of the
            Holders allowed in any such judicial proceedings; and

                 (ii) in particular, the Trustee shall be authorized to collect
            and receive any moneys or other property payable or deliverable on
            any such claims and to distribute the same in accordance with
            Section 5.06; and

            (b) 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 Trustee
      for distribution in accordance with Section 5.06, and in the event that
      the Trustee shall consent to the making of such payments directly to the
      Holders, to pay to the Trustee any amount due to it and any predecessor
      Trustee under Section 6.07.

            Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any
<PAGE>
                                      -45-


proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.

            SECTION 5.05. Trustee May Enforce Claim Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 6.07, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

            SECTION 5.06. Application of Money Collected. Any money or property
collected or to be applied by the Trustee with respect to a series of Securities
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money or
property on account of principal (or premium, if any) or interest (including any
Additional Interest), upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:

            First: to the payment of all amounts due the Trustee and any
      predecessor Trustee under Section 6.07;

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

            Third: the balance, if any, to the Person or Persons entitled
      thereto.

            SECTION 5.07. Limitation on Suits. No Holder of any Securities of
any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture or for the appointment of a receiver,
assignee, trustee, liquidator, sequestrator (or other similar official) or for
any other remedy hereunder, unless:

            (1) such Holder has previously given written notice to the Trustee
      of a continuing Event of Default with respect to the Securities of that
      series;

            (2) the Holders of not less than 25% in principal amount of the
      Outstanding Securities of that series shall have made written request to
      the Trustee to institute proceedings in respect of such Event of Default
      in its own name as Trustee hereunder;
<PAGE>
                                      -46-


            (3) such Holder or Holders have offered to the Trustee reasonable
      indemnity against the costs, expenses and liabilities to be incurred in
      compliance with such request;

            (4) the Trustee for 60 days after its receipt of such notice,
      request and offer of indemnity has failed to institute any such
      proceeding; and

            (5) no direction inconsistent with such written request has been
      given to the Trustee during such 60-day period by the Holders of a
      majority in principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.

            SECTION 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium, if any) and (subject to
Section 3.08) interest (including any Additional Interest) on such Security on
the respective Stated Maturities expressed in such Security and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder. In the case of Securities of a
series issued to a U.S.B.H. Capital Trust, any holder of the corresponding
series of Capital Securities shall have the right, upon the occurrence of an
Event of Default described in Section 5.01(l) or 5.01(2) hereof, to institute a
suit directly against the Company for enforcement of payment to such Holder of
principal of (and premium, if any) and (subject to Section 3.08) interest
(including any Additional Interest) on the Securities having a principal amount
equal to the aggregate Liquidation Amount of the Capital Securities of the
corresponding series held by such Holder. Notwithstanding any payments made to a
holder of Capital Securities by the Company in connection with a suit directly
against the Company, the Company shall remain obligated to pay the principal of
or interest on the Securities, and the Company shall be subrogated to the rights
of the holder of such Capital Securities with respect to payments on the Capital
Securities to the extent of any payments made by the Company to such holder in
any suit directly against the Company.

            The holders of the Capital Securities will not be able to exercise
directly any remedies, other than those set forth in this Section 5.08,
available to the holders of the Securities unless there shall have been an Event
of Default under the Trust Agreement.

            SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every case the Company,
<PAGE>
                                      -47-


the Trustee and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.

            SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise
provided in the last paragraph of Section 3.07, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

            SECTION 5.11. Delay or Omission Not Waiver. Except as otherwise
provided in the last paragraph of Section 3.07, no delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.

            Every right and remedy given by this Article or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders as the case may be.

            SECTION 5.12. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee, with respect to the Securities of such series, provided that:

            (1) such direction shall not be in conflict with any rule of law or
      with this Indenture or unduly prejudicial to the rights of other Holders
      and would not subject the Trustee to personal liability; and

            (2) the Trustee may take any other action deemed proper by the
      Trustee which is not inconsistent with such direction.

            Upon receipt by the Trustee of any written notice directing the
time, method or place of conducting any such proceeding or exercising any such
trust or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
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, however, that, unless the Holders of a majority in principal amount of
the Outstanding Securities of such series shall have joined in such notice
<PAGE>
                                      -48-


prior to the day which is 90 days after such record date, such notice shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new notice
identical to a 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 5.12.

            SECTION 5.13. Waiver of Past Defaults. The Holders of not less than
a majority in principal amount of the Outstanding Securities of any series may
on behalf of the Holders of all the Securities of such series waive any past
default hereunder and its consequences with respect to such series except a
default:

            (1) in the payment of the principal of (or premium, if any) or
      interest (including any Additional Interest) on any Security of such
      series; or

            (2) in respect of a covenant or provision hereof which under Article
      IX cannot be modified or amended without the consent of the Holder or each
      Outstanding Security of such series affected.

            Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

            SECTION 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security on or after the
respective Stated Maturities expressed in such Security.

            SECTION 5.15. Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to
<PAGE>
                                      -49-


the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

            SECTION 5.16. Option to Waive Certain Rights. Any beneficiary of any
right granted under this Indenture shall have the option to waive such right,
unless expressly prohibited under this Indenture.

            SECTION 5.17. Tax Treatment of the Junior Subordinated Debt
Securities. Each beneficial owner of a Trust Security by acceptance of a
beneficial interest in the Trust Security agrees to treat the Junior
Subordinated Debt Securities as indebtedness for all U.S. federal, state and
local tax purposes.

                                   ARTICLE VI

                                   The Trustee

            SECTION 6.01. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default:

            (1) the Trustee undertakes to perform such duties and only such
      duties as are specifically set forth in this Indenture, and no implied
      covenants or obligations shall be read into this Indenture against the
      Trustee; and

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

            (b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.

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

            (i) this Subsection shall not be construed to limit the effect of
      Subsection (a) of this Section;

           (ii) the Trustee shall not be liable for any error of judgment made
      in good faith by a Responsible Officer, unless it shall be proved that the
      Trustee was negligent in ascertaining the pertinent facts; and
<PAGE>
                                      -50-


          (iii) the Trustee shall not be liable with respect to any action
      taken or omitted to be taken by it in good faith in accordance with the
      direction of Holders pursuant to Section 5.12 hereof.

            (d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be grounds for believing that repayment of such
funds or indemnity satisfactory to its against such risk or liability is not
assured to it.

            (e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

            SECTION 6.02. Notice of Defaults. Within 90 days after actual
knowledge by a Responsible Officer of the Trustee of the occurrence of any
default hereunder with respect to the Securities of any series, the Trustee
shall transmit by mail to all Holders of Securities of such series, as their
names and addresses appear in the Securities Register, notice of such default
hereunder known to a Responsible Officer of the Trustee, unless such 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 Additional Interest) on any Security of such series, the 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 Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of Securities of
such series; and provided, further, however, that, in the case of any default of
the character specified in Section 5.01(3), no such notice to Holders of
Securities of such series shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, 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 Securities of such series.

            SECTION 6.03. Certain Rights of Trustee. Subject to the provisions
of Section 6.01:

            (a) the Trustee may conclusively rely and shall be fully protected
      in acting or refraining from acting upon any resolution, certificate,
      statement, instrument, opinion, report, notice, request, direction,
      consent, order, bond, debenture, Security or other paper or document
      believed by it to be genuine and to have been signed or presented by the
      proper party or parties, and, except as provided in Section 6.01(a)
      hereof, the Trustee need not investigate any fact or matter stated in the
      document;

            (b) any request or direction of the Company mentioned herein shall
      be sufficiently evidenced by a Company Request or Company Order and any
      resolution of the Board of Directors may be sufficiently evidenced by a
      Board Resolution;
<PAGE>
                                      -51-


            (c) whenever in the administration of this Indenture the Trustee
      shall deem it desirable that a matter be proved or established prior to
      taking, suffering or omitting any action hereunder, the Trustee (unless
      other evidence be herein specifically prescribed) shall be entitled to
      receive and may, in the absence of bad faith on its part, conclusively
      rely upon an Officers' Certificate;

            (d) the Trustee may consult with counsel and the advice of such
      counsel or any Opinion of Counsel shall be full and complete authorization
      and protection in respect of any action taken, suffered or omitted by it
      hereunder in good faith and in reliance thereon;

            (e) the Trustee shall be under no obligation to exercise any of the
      rights or powers vested in it by this Indenture at the request or
      direction of any of the Holders pursuant to this Indenture, unless such
      Holders shall have offered to the 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;

            (f) the Trustee shall not be bound to make any investigation into
      the facts or matters stated in any resolution, certificate, statement,
      instrument, opinion, report, notice, request, direction, consent, order,
      bond, indenture, Security or other paper or document, but the Trustee in
      its discretion may make such inquiry or investigation into such facts or
      matters as it may see fit, and, if the Trustee shall determine to make
      such inquiry or investigation, it shall be entitled to examine the books,
      records and premises of the Company, personally or by agent or attorney;

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

            (h) the Trustee shall not be under any obligation to take any action
      that is discretionary under the provisions of this Indenture;

            (i) the Trustee shall not be charged with knowledge of any Event of
      Default unless either (1) a Responsible Officer of the Trustee shall have
      actual knowledge or (2) the Trustee shall have received notice thereof in
      accordance with Section 1.05(l) hereof from the Company or a Holder; and

            (j) no permissive power or authority available to the Trustee shall
      be construed as a duty.

            SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities or any offering or disclosure materials
<PAGE>
                                      -52-


prepared in connection therewith. The Trustee shall not be accountable for the
use or application by the Company of the Securities or the proceeds thereof.

            SECTION 6.05. May Hold Securities. The Trustee, any Paying Agent,
Securities Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.08 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Securities Registrar or such
other agent.

            SECTION 6.06. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.

            SECTION 6.07. Compensation and Reimbursement. The Company, as
borrower on the Securities, agrees:

            (1) to pay to the Trustee from time to time reasonable compensation
      for all services rendered by it hereunder in such amounts as the Company
      and the Trustee shall agree from time to time (which compensation shall
      not be limited by any provision of law in regard to the compensation a
      trustee of an express trust);

            (2) to reimburse the Trustee upon its request for all reasonable
      expenses, disbursements and advances incurred or made by the Trustee in
      accordance with any provision of this Indenture (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 bad faith; and

            (3) to indemnify the Trustee, its officers, agents, directors and
      employees for, and to hold them harmless against, any loss, liability or
      expense (including the reasonable compensation and the expenses and
      disbursements of its agents and counsel) incurred without negligence or
      bad faith, arising out of or in connection with the acceptance or
      administration of this trust or the performance of its duties hereunder,
      including the costs and expenses of defending itself against any claim or
      liability in connection with the exercise or performance of any of its
      powers or duties hereunder.

            To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee. The
obligations of the Company under this Section 6.07 shall survive the
satisfaction and discharge and the termination of this Indenture or the earlier
resignation or removal of the Trustee.

            When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 5.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Code of 1978, as amended, or any successor
statute.
<PAGE>
                                      -53-


            SECTION 6.08. Disqualification; Conflicting Interests. The Trustee
for the Securities of any series issued hereunder shall be subject to the
provisions of Section 310(b) of the Trust Indenture Act. Nothing herein shall
prevent the Trustee from filing with the Commission the application referred to
in the second-to-last paragraph of Section 301(b) of the Trust Indenture Act.

            SECTION 6.09. Corporate Trustee Required, Eligibility. There shall
at all times be a Trustee hereunder which shall be:

            (a) a corporation organized and doing business under the laws of the
      United States of America or of any state, territory or the District of
      Columbia, authorized under such laws to exercise corporate trust powers
      and subject to supervision or examination by Federal, state, territorial
      or District of Columbia authority, or

            (b) a corporation or other Person organized and doing business under
      the laws of a foreign government that is permitted to act as Trustee
      pursuant to a rule, regulation or order of the Commission, authorized
      under such laws to exercise corporate trust powers, and subject to
      supervision or examination by authority of such foreign government or a
      political subdivision thereof substantially equivalent to the supervision
      or examination applicable to United States institutional trustees,

in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision of examination by Federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examination authority, then,
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee for the Securities of any series issued hereunder.

            SECTION 6.10. Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Trustee and no appointment of a Successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the Successor Trustee under Section 6.11.

            (b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a Successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a Successor Trustee with respect to the
Securities of such series.
<PAGE>
                                      -54-


            (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.

            (d) If at any time:

            (i) the Trustee shall fail to comply with Section 6.08 after written
      request therefor by the Company or by any Holder who has been a bona fide
      Holder of a Security for at least six months, or

           (ii) the Trustee shall cease to be eligible under Section 6.09 and
      shall fail to resign after written request therefor by the Company or by
      any such Holder, or

          (iii) the Trustee shall become incapable of acting or shall be
      adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
      property shall be appointed or any public officer shall take charge or
      control of the Trustee or of its property or affairs for the purpose of
      rehabilitation, conservation or liquidation, then, in any such case, (i)
      the Company, acting pursuant to the authority of a Board Resolution, may
      remove the Trustee, or (ii) subject to Section 5.14, any Holder who has
      been a bona fide Holder of a Security for at least six months may, on
      behalf of himself and all others similarly situated, petition any court of
      competent jurisdiction for the removal of the Trustee and the appointment
      of a Successor Trustee.

            (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a Successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a Successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the Successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the Successor Trustee with respect to the Securities of such series and
supersede the Successor Trustee appointed by the Company. If no Successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a bona fide Holder of a Security
for at least six months may, subject to Section 5.14, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a Successor Trustee with respect to the Securities of such
series.

            (f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a Successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Securities of such series as their names and addresses appear in
the Securities Register. Each notice shall include the name of the
<PAGE>
                                      -55-


Successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.

            SECTION 6.11. Acceptance of Appointment by Successor. (a) In case of
the appointment hereunder of a Successor Trustee with respect to all Securities,
every such Successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an 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 all the rights, powers trusts and duties
of the retiring Trustee; but, on the request of the Company 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 shall duly assign, transfer and
deliver to such Successor Trustee all property and money held by such retiring
Trustee hereunder.

            (b) In case of the appointment hereunder of the Successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each Successor Trustee with respect to the Securities
of one or more series shall execute and deliver an instrument or an indenture
supplemental hereto wherein each Successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each Successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such Successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such instrument or supplemental indenture shall constitute
such Trustee co-trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee and upon the execution
and delivery of such instrument or supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such Successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such Successor Trustee relates; but, on request of
the Company or any Successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such Successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such Successor Trustee relates.

            (c) Upon request of any such Successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such
<PAGE>
                                      -56-


Successor Trustee all rights, powers and trusts referred to in paragraph (a) or
(b) of this Section, as the case may be.

            (d) No Successor Trustee shall accept its appointment unless at the
time of such acceptance such Successor Trustee shall be qualified and eligible
under this Article. In the event that the Trust Indenture Act applies to this
Indenture at the time that any Successor Trustee is appointed, such Successor
Trustee shall qualify under such Act.

            SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article (including qualification under the Trustee Indenture Act, if
applicable), without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such Successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.

            SECTION 6.13. Preferential Collection of Claims Against Company. If
and when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).

            SECTION 6.14. Appointment of Authenticating Agent. The Trustee may
appoint an authenticating agent or agents (each, an "Authenticating Agent") with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial redemption
thereof, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Where reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any state, Territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually,
<PAGE>
                                      -57-


pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.

            Any corporation into which an Authenticating Agent 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 Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.

            An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.

            The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

            If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of each series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
<PAGE>
                                      -58-


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

                                       THE CHASE MANHATTAN BANK
                                       Trustee


                                       by  ______________________________
                                           As Authenticating Agent


                                       by  ______________________________
                                           Authorized Signatory

            SECTION 6.15. Trustee's Rights and Obligations After Qualification
of Indenture. Following the qualification of this Indenture under the Trust
Indenture Act, the Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Trustee is under no obligation to
exercise any of the powers vested in it by this Indenture at the request of any
holder of the Securities, unless offered indemnity to its satisfaction by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The Trustee will not be required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties if
the Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it. Notwithstanding the foregoing, nothing in this Section
6.15 shall be deemed to abrogate any of the rights, indemnities or protections
otherwise provided to the Trustee under this Indenture.

                                   ARTICLE VII

              Holder's Lists and Reports by Trustee and Company

            SECTION 7.01. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee:

            (a) semiannually, not more than 15 days after January 15 and July
      15, a list, in such form as the Trustee may reasonably require, of the
      names and addresses of the Holders as of such January 1 and July 1, and

            (b) at such other times as the Trustee may request in writing,
      within 30 days after the receipt by the Company of any such request, a
      list of similar form and content as of a date not more than 15 days prior
      to the time such list is furnished; provided, however, that so long as the
      Trustee is the Securities Registrar, no such list need be furnished.

            SECTION 7.02. Preservation of Information, Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in
<PAGE>
                                      -59-


Section 7.01 and the names and addresses of Holders received by the Trustee in
its capacity as Securities Registrar. The Trustee may destroy any list furnished
to it as provided in Section 7.01 upon receipt of a new list so furnished.

            (b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.

            (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.

            SECTION 7.03. Reports by Trustee. (a) The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act, at the times and in the
manner provided pursuant thereto.

            (b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted within 60 days of May 15 of each
calendar year, commencing with May 15, 1997.

            (c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each securities exchange
upon which the Securities are listed and also with the Commission. The Company
will notify the Trustee whenever the Securities are listed on any securities
exchange.

            SECTION 7.04. Reports by Company. The Company shall file with the
Trustee and with the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided in
the Trust Indenture Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, shall be filed
with the Trustee within 15 days after the same is required to be filed with the
Commission. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company shall continue to file with the
Commission and provide the Trustee with the annual reports and the information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Securities Exchange Act of 1934, as amended. The Company also shall comply with
the other provisions of Trust Indenture Act Section 314(a).
<PAGE>
                                      -60-


                                  ARTICLE VIII

             Consolidation, Merger, Conveyance, Transfer or Lease

            SECTION 8.01. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge with or into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge with or into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:

            (1) in case the Company shall consolidate with or merge with or into
      another Person or convey, transfer or lease its properties and assets
      substantially as an entirety to any Person, the corporation formed by such
      consolidation or into which the Company is merged or the Person which
      acquires by conveyance or transfer, or which leases, the properties and
      assets of the Company substantially as an entirety shall be a corporation,
      partnership or trust organized and existing under the laws of the United
      States of America or any State or the District of Columbia, and shall
      expressly assume, by an indenture supplemental hereto, executed and
      delivered to the Trustee, in form satisfactory to the Trustee, the due and
      punctual payment of the principal of (and premium, if any) and interest
      (including any Additional Interest) on all the Securities and the
      performance of every covenant and every obligation of this Indenture on
      the part of the Company to be performed or observed;

            (2) immediately after giving effect to such transaction, no Event of
      Default, and no event which, after notice or lapse of time, or both, would
      become an Event of Default, shall have occurred and be continuing;

            (3) in the case of the Securities of a series issued to a U.S.B.H.
      Capital Trust, such consolidation, merger, conveyance, transfer or lease
      is permitted under the related Trust Agreement and U.S.B. Holding Co.,
      Inc. Guarantee and does not give rise to any breach or violation of the
      related Trust Agreement or U.S.B. Holding Co., Inc. Guarantee; and

            (4) the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel each stating that such
      consolidation, merger, conveyance, transfer or lease and any such
      supplemental indenture complies with this Article and that all conditions
      precedent herein provided for relating to such transaction have been
      complied with; and the Trustee, subject to Section 6.01, may rely upon
      such Officers' Certificate and Opinion of Counsel as conclusive evidence
      that such transaction complies with this Section 8.01.

            SECTION 8.02. Successor Corporation Substituted. Upon any
consolidation or merger by the Company with or into any other Person, or any
conveyance, transfer or lease by the Company of its properties and assets
substantially as an entirety to any Person in accordance with Section 8.01, the
successor corporation formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or
<PAGE>
                                      -61-


lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein; and in the event of
any such conveyance, transfer or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities and may be
dissolved and liquidated.

            Such successor Person may cause to be signed, and may issue either
in its own name or in the name of the Company, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person thereafter shall cause
to be signed and delivered to the Trustee on its behalf for the purpose pursuant
to such provisions. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.

            In case of any such consolidation, merger, sale, conveyance or
lease, such changes in phraseology and form may be made in the Securities
thereafter to be issued as may be appropriate.

                                   ARTICLE IX

                             Supplemental Indentures

            SECTION 9.01. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory, to the
Trustee, for any of the following:

            (1) to evidence the succession of another Person to the Company, and
      the assumption by any such successor of the covenants of the Company
      herein and in the Securities contained;

            (2) to convey, transfer, assign, mortgage or pledge any property to
      or with the Trustee or to surrender any right or power herein conferred
      upon the Company;

            (3) to establish the form or terms of Securities of any series as
      permitted by Sections 2.01 or 3.01;

            (4) to add to the covenants of the Company for the benefit of the
      Holders of all or any series of Securities (and if such covenants are to
      be for the benefit of less than all series of Securities, stating that
      such covenants are expressly being included
<PAGE>
                                      -62-


      solely for the benefit of such series) or to surrender any right or power
      herein conferred upon the Company;

            (5) to add any additional Events of Default;

            (6) to change or eliminate any of the provisions of this Indenture;
      provided that any such change or elimination shall become effective only
      when there is no Security Outstanding of any series created prior to the
      execution of such supplemental indenture which is entitled to the benefit
      of such provision;

            (7) to cure any ambiguity, to 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 Indenture; provided that such action pursuant to this clause
      (7) shall not materially adversely affect the interest of the Holders of
      Securities of any series or, in the case of the Securities of a series
      issued to a U.S.B.H. Capital Trust and for so long as any of the
      corresponding series of Capital Securities shall remain outstanding, the
      holders of such Capital Securities;

            (8) to evidence and provide for the acceptance of appointment
      hereunder by a Successor Trustee with respect to the Securities of one or
      more series and to add to or change any of the provisions of this
      Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee, pursuant
      to the requirements of Section 6.11(b); or

            (9) to comply with the requirements of the Commission in order to
      effect or maintain the qualification of this Indenture under the Trust
      Indenture Act.

            SECTION 9.02. Supplemental Indentures with Consent of Holders. With
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,

            (1) except to the extent permitted by Section 3.12 or as otherwise
      specified as contemplated by Section 3.01 with respect to the extension of
      the interest payment period of the Securities of any series, change the
      Stated Maturity of the principal of, or any installment of interest
      (including any Additional Interest) on, any Security, or reduce the
      principal amount thereof or the rate of interest thereon or reduce any
      premium payable upon the redemption thereof, or reduce the amount of
      principal of a Discount Security that would be due and payable upon a
      declaration of acceleration of
<PAGE>
                                      -63-


      the Maturity thereof pursuant to Section 5.02, or change the place of
      payment where, or the coin or currency in which, any Security or interest
      thereon is payable, or impair the right to institute suit for the
      enforcement of any such payment on or after the Stated Maturity thereof
      (or, in the case of redemption, on or after the date fixed for redemption
      thereof);

            (2) reduce the percentage in principal amount of the Outstanding
      Securities of any series, the consent of whose Holders is required for any
      such supplemental indenture, or the consent of whose Holders is required
      for any waiver (of compliance with certain provisions of this Indenture or
      certain defaults hereunder and their consequences) provided for in this
      Indenture;

            (3) modify any of the provisions of this Section, Section 5.13 or
      Section 10.05, except to increase any such percentage or to provide that
      certain other provisions of this Indenture cannot be modified or waived
      without the consent of the Holder of each Security affected thereby; or

            (4) modify the provisions in Article XIII of this Indenture with
      respect to the subordination of Outstanding Securities of any series in a
      manner adverse to the Holders thereof;

provided that, in the case of the Securities of a series issued to a U.S.B.H.
Capital Trust, so long as any of the corresponding series of Capital Securities
remains outstanding, no such amendment shall be made that adversely affects the
holders of such Capital Securities, and no termination of this Indenture shall
occur, and no waiver of any Event of Default or compliance with any covenant
under this Indenture shall be effective, without the prior consent of the
holders of at least a majority of the aggregate Liquidation Amount of such
Capital Securities then outstanding unless and until the principal (and premium,
if any) of the Securities of such series and all accrued and, subject to Section
3.08, unpaid interest (including any Additional Interest) thereon have been paid
in full; and provided further, however, that in the case of the Securities of a
series issued to a U.S.B.H. Capital Trust, so long as any of the corresponding
series of Capital Securities remain outstanding, no amendment shall be made to
Section 5.08 of this Indenture without the prior consent of the holders of each
Capital Security then outstanding unless and until the principal (and premium,
if any) of the Securities of such series and all accrued and (subject to Section
3.08) unpaid interest (including any Additional interest) thereon have been paid
in full.

            A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

            It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
<PAGE>
                                      -64-


            SECTION 9.03. Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in conclusively relying upon, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, or
which may subject it to liability or be contrary to applicable law.

            SECTION 9.04. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

            SECTION 9.05. Conformity with Trust Indenture Act. No supplemental
indenture will be qualified or executed pursuant to the Trust Indenture Act
unless this Indenture is so qualified, or in connection with Capital Securities
which are registered under the Securities Exchange Act of 1934, as amended, upon
the effectiveness of a registration statement and the consummation of an
exchange offer pursuant to a Registration Rights Agreement as contemplated in
Article XII hereof. Every supplemental indenture so qualified or executed shall
conform to the requirements of the Trust Indenture Act as then in effect.

            SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Company,
bear a notation in form approved by the Company as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
of any series so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such Series.

                                    ARTICLE X

                                    Covenants

            SECTION 10.01. Payment of Principal, Premium and Interest. The
Company covenants and agrees for the benefit of each series of securities that
it will duly and punctually pay the principal of (and premium, if any) and
interest on the Securities of that series in accordance with the terms of such
Securities and this Indenture.

            SECTION 10.02. Maintenance of Office or Agency. The Company will
maintain in each Place of Payment for any series, an office or agency where
Securities of that
<PAGE>
                                      -65-


series may be presented or surrendered for payment and an office or agency where
Securities may be surrendered for transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company initially appoints the Trustee, acting through its
Corporate Trust Office, as its agent for said purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain such office
or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.

            The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.

            SECTION 10.03. Money for Security Payments to be Held in Trust. If
the Company shall at any time act as its own Paying Agent with respect to any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its failure so to
act.

            Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m. New York City time on each due date of the principal of or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal and
premium (if any) or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its failure so to act.

            The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:

            (1) hold all sums held by it for the payment of the principal of
      (and premium, if any) or interest on Securities in trust for the benefit
      of the Persons entitled thereto until such sums shall be paid to such
      Persons or otherwise disposed of as herein provided;

            (2) give the Trustee written notice of any default by the Company
      (or any other obligor upon the Securities) in the making of any payment of
      principal (and premium, if any) or interest;
<PAGE>
                                      -66-


            (3) at any time during the continuance of any such default, upon the
      written request of the Trustee, forthwith pay to the Trustee all sums so
      held in trust by such Paying Agent; and

            (4) comply with the provisions of the Trust Indenture Act applicable
      to it as a Paying Agent.

            The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by the Company or any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.

            Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and premium,
if any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall (unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Company Request to the Company,
or (if then held by the Company) shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, the City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

            SECTION 10.04. Statement as to Compliance. The Company shall deliver
to the Trustee, within 120 days after the end of such calendar year of the
Company ending after the date hereof, an Officers' Certificate executed by
authorized officers at least one of whom shall be the principal executive,
financial or accounting officer of the Company covering the preceding calendar
year, stating whether or not to the best knowledge of the signers thereof the
Company is in default in the performance, observance or fulfillment of or
compliance with any of the terms, provisions, covenants and conditions of this
Indenture, and if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge. For the
purpose of this Section 10.04, compliance shall be determined without regard to
any grace period or requirement of notice provided pursuant to the terms of this
Indenture.
<PAGE>
                                      -67-


            SECTION 10.05. Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any covenant or condition as specified as
contemplated by Section 3.01 with respect to the Securities of any series, if
before or after the time for such compliance the Holders of at least a majority
in principal amount of the Outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company in respect of any such covenant or condition shall remain in full force
and effect.

            SECTION 10.06. Payment of the Trust's Costs and Expenses. Since the
U.S.B.H. Capital Trusts are being formed solely to facilitate the investment in
the Securities, the Company, as borrower on the Securities, hereby covenants to
pay all debts and obligations (other than with respect to the payment of
principal, interest and premium, if any, on the Trust Securities) and all costs
and expenses of such Trusts (including, but not limited to, all costs and
expenses relating to the organization of such Trusts, the fees and expenses of
the Trustees and all costs and expenses relating to the operation of such
Trusts) and to pay any and all taxes, duties, assessments or other governmental
charges of whatever nature (other than United States withholding taxes) imposed
on such Trusts by the United States, or any other taxing authority (such
payments of amounts in connection with taxes being herein referred to as
"Additional Sums"), so that the net amounts received and retained by such Trusts
and their respective Property Trustees after paying such expenses or Additional
Sums will be equal to the amounts such Trusts and Property Trustees would have
received had no such costs, expenses or taxes, duties, assessments or other
governmental charges been incurred by or imposed on such Trusts. The foregoing
obligations of the Company are for the benefit of, and shall be enforceable by,
any person to whom such debts, obligations, costs, expenses and taxes are owed
(a "Creditor") whether or not such Creditor has received notice thereof. Any
such Creditor may enforce such obligations of the Company hereunder directly
against the Company, and the Company hereby irrevocably waives any right or
remedy to require that any such Creditor take any action against any Trust or
any other person before proceeding against the Company. The Company also agrees
hereby to execute such additional agreements as may be necessary or desirable to
give full effect to the foregoing.

            SECTION 10.07. Additional Covenants. The Company covenants and
agrees with each Holder of Securities of a series issued to a U.S.B.H. Capital
Trust that it will not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any
shares of the Company's capital stock (which includes common and preferred
stock), or (ii) make any payment of principal, interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Company (including
Other Debentures) that rank pari passu with or junior in interest to the
Securities of such series or (iii) make any guarantee payments with respect to
any guarantee by the Company of debt securities of any subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in interest to the Securities (other than (a) dividends or distributions in
Common Stock of the Company, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
<PAGE>
                                      -68-


under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (c) payments under the U.S.B. Holding Co. Inc.
Guarantee, (d) purchases or acquisitions of shares of the Company's Common Stock
in connection with the satisfaction by the Company of its obligations under any
employee benefit plan or other contractual obligation of the Company (other than
a contractual obligation ranking pari passu with or junior in interest to these
Securities), (e) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, or (f)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged), if at such time (i) there shall have
occurred an Event of Default, (ii) the Company shall be in default with respect
to its payment of any obligations under the related U.S.B. Holding Co. Inc.
Guarantee or (iii) the Company shall have given notice of its election to begin
an Extension Period as provided herein and shall not have rescinded such notice,
or such Extension Period, or any extension thereof, shall be continuing.

            The Company also covenants with each Holder of Securities of a
series issued to a U.S.B.H. Capital Trust (i) to maintain directly 100%
ownership of the Common Securities of such U.S.B.H. Capital Trust; provided,
however, that any permitted successor of the Company hereunder may succeed to
the Company's ownership of such Common Securities, (ii) not to voluntarily
terminate, windup or liquidate such U.S.B.H. Capital Trust, except (a) in
connection with a distribution of the Securities of such series to the holders
of Capital Securities in liquidation of such U.S.B.H. Capital Trust or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement and (iii) to use its reasonable efforts, consistent
with the terms and provisions of such Trust Agreement, to cause such U.S.B.H.
Capital Trust to remain classified as a grantor trust and not an association
taxable as a corporation for United States Federal income tax purposes.

            SECTION 10.08. Information Returns. On or before December 15 of each
year during which any Securities are outstanding, the Company shall furnish to
each Paying Agent such information as may be reasonably requested by each Paying
Agent in order that such Paying Agent may prepare the information which it is
required to report for such year on Internal Revenue Service Forms 1096 and
1099. Such information shall include the amount of original issue discount, if
any, includible in income for each $1,000 of principal amount at Stated Maturity
of outstanding Securities during such year.

                                   ARTICLE XI

                     Redemption or Prepayment of Securities

            SECTION 11.01. Applicability of This Article. Redemption of
Securities (whether by operation of a sinking fund or otherwise) as permitted or
required by any form of Security issued pursuant to this Indenture shall be made
in accordance with such form of Security and this Article; provided, however,
that if any provision of any such form of Security shall conflict with any
provision of this Article, the provision of such form of
<PAGE>
                                      -69-


Security shall govern. Except as otherwise set forth in the form of Security for
such series, each Security shall be subject to partial redemption only in the
amount of $1,000 or, in the case of the Securities of a series issued to a
U.S.B.H. Capital Trust, $1,000, or integral multiples thereof.

            SECTION 11.02. Election To Redeem; Notice to Trustee. The election
of the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
any Securities of any particular series and having the same terms, the Company
shall, not less than 45 nor more than 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee and the Property Trustee of such date and of the principal
amount of Securities of that series to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities, the Company shall furnish
the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing
compliance with such restriction. Any such notice given to the Trustee hereunder
shall include the information required by Section 11.04 hereof.

            SECTION 11.03. Selection of Securities to be Redeemed. If less than
all the Securities of any series are to be redeemed (unless all the Securities
of such series and of a specified tenor are to be redeemed or unless such
redemption affects only a single Security all as designated to the Trustee by
the Company), the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of a portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security. If less than all the
Securities of such series and of a specified tenor are to be redeemed (unless
such redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.

            The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed. If the Company shall so direct, Securities registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Securities selected for redemption.

            SECTION 11.04. Notice of Redemption. Notice of redemption shall be
given by the Company by first-class mail, postage prepaid, mailed not later than
the thirtieth day, and not earlier than the sixtieth day, prior to the date
fixed for redemption, to each
<PAGE>
                                      -70-


Holder of Securities to be redeemed, at the address of such Holder as it appears
in the Securities Register.

            With respect to Securities of each series to be redeemed, each
notice of redemption shall state:

            (a) the date fixed for redemption for Securities of such series;

            (b) the redemption price at which Securities of such series are to
      be redeemed;

            (c) if less than all Outstanding Securities of such particular
      series and having the same terms are to be redeemed, the identification
      (and, in the case of partial redemption, the respective principal amounts)
      of the particular Securities to be redeemed;

            (d) that on the date fixed for redemption, the redemption price at
      which such Securities are to be redeemed will become due and payable upon
      each such Security or portion thereof, and that interest thereon, if any,
      shall cease to accrue on and after said date;

            (e) the place or places where such Securities are to be surrendered
      for payment of the redemption price at which such Securities are to be
      redeemed;

            (f) that the redemption is for a sinking fund, if such is the case;
      and

            (g) such other provisions as may be required in respect of the terms
      of a particular series of Securities.

            Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall not be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.

            SECTION 11.05. Deposit of Redemption Price. Prior to 10:00 a.m. New
York City time on the redemption date specified in the notice of redemption
given as provided in Section 11.04, the Company will deposit with the Trustee or
with one or more paying agents an amount of money sufficient to redeem on the
redemption date all the Securities so called for redemption at the applicable
redemption price.

            SECTION 11.06. Payment of Securities Called for Redemption. If any
notice of redemption has been given as provided in Section 11.04, the Securities
or portion of Securities with respect to which such notice has been given shall
become due and payable on
<PAGE>
                                      -71-


the date and at the place or places stated in such notice at the applicable
redemption price. On presentation and surrender of such Securities at a place of
payment in said notice specified, the said securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price.

            Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of that
same series, of authorized denominations, in aggregate principal amount equal to
the unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms. If the Global Security is so surrendered,
such new Security will (subject to Section 3.06) also be a new Global Security.

            If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.

            SECTION 11.07. Company's Right of Redemption. Unless otherwise
specified as contemplated by Section 3.01 with respect to the Securities of a
particular series and notwithstanding any additional redemption rights that may
be so specified, the Company may, at its option, redeem the Securities of any
series after their date of issuance in whole at any time or in part from time to
time, subject to the provisions of this clause (a) and the other provisions of
this Article XI. Unless otherwise specified as contemplated by Section 3.01 with
respect to the Securities of a particular series, the redemption price for any
Security so redeemed pursuant to this clause (a) shall be equal to 100% of the
principal amount of such Securities plus any accrued and unpaid interest,
including any Additional Interest, to the date fixed for redemption. The Company
shall not redeem the Securities in part unless all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all Securities
Outstanding for all interest periods terminating on or prior to the date fixed
for redemption.

                                   ARTICLE XII

                        Exchange and Registration Rights

            SECTION 12.01. Exchange. (a) If specified as contemplated by Section
3.01 for Securities for any series, the Company and a U.S.B.H. Capital Trust
holding such Securities shall enter into a registration rights agreement (a
"Registration Rights Agreement") for the benefit of the holders of any Capital
Securities of such U.S.B.H. Capital Trust which are not registered under the
Securities Act providing that such U.S.B.H. Capital Trust use its best efforts
to exchange such Capital Securities for registered securities, by means of an
exchange offer registration statement (an "Exchange Offer Registration
Statement"), issued by the Company and such U.S.B.H. Capital Trust with terms
identical in all material respects to the terms of the Capital Securities (the
"Exchange Capital Securities").

            (b) In the event that U.S.B.H. Capital Trust is successful in
providing Exchange Capital Securities to the holders of Capital Securities as
described in clause (a) of
<PAGE>
                                      -72-


this Section 12.01, the Company shall contemporaneously exchange the Securities
held by such U.S.B.H. Capital Trust for new securities issued by the Company
(the "Exchange Securities") with terms identical in all material respects to the
terms of the Securities to such Capital Securities, and shall further
contemporaneously exchange the U.S.B. Holding Co., Inc. Guarantee then held by
the Guarantee Trustee under the Guarantee Agreement for a new guarantee of the
Company (the "Exchange Guarantee") with terms identical in all material respects
to the terms of the U.S.B. Holding Co., Inc. Guarantee.

            SECTION 12.02. Registration. If specified as contemplated by Section
3.01 for Securities for any series, the Administrative Trustee of any U.S.B.H.
Capital Trust on behalf of the Company and such U.S.B.H. Capital Trust shall (a)
file a registration statement under the Securities Act covering resales of the
Capital Securities (the "Registration Statement"), (b) use their best efforts to
cause such Registration Statement to be declared effective under the Securities
Act, and (c) use their best efforts to cause such Registration Statement to
remain effective for as long as specified as contemplated by Section 3.01 for
Securities of such series. The Administrative Trustees shall (x) promptly
deliver to the holders and to the Delaware Trustee and the Property Trustee
written notice of their intent to file such Registration Statement. All costs
incurred in connection with the filing and maintenance of such Registration
Statement shall be borne by the Company.

            SECTION 12.03. Liquidated Damages. If specified as contemplated by
Section 3.01 for Securities of any series, the Company may enter into an
agreement providing that, in the event that (i) an Exchange Offer Registration
Statement or a Registration Statement is not filed, (ii) such Exchange Offer
Registration Statement or Registration Statement does not become effective, or
(iii) such Exchange Offer Registration Statement or Registration Statement does
not remain effective or useable within the time period or for as long as
contemplated by the applicable registration rights agreement, the Company shall
pay to the relevant U.S.B.H. Capital Trust, and such U.S.B.H. Capital Trust
shall pay to the holders of the Capital Securities, an amount of liquidated
damages, which may be either fixed or based on the duration and/or principal
amount of the Securities or the Liquidation Amount of the Capital Securities
affected thereby.

            SECTION 12.04. Compliance with Law. Any registration rights
agreement entered into hereunder may provide that any Holder of Capital
Securities who is considered to be an affiliate of the Company or the U.S.B.H.
Capital Trust or any underwriter in connection with the issuance and sale of
Capital Securities be barred from participation in the Exchange Offer
Registration Statement or other Registration Statement, in accordance with
applicable law or regulation.
<PAGE>
                                      -73-


                                  ARTICLE XIII

                                  Sinking Funds

            SECTION 13.01. Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of Securities
of any series except as otherwise specified as contemplated by Section 3.01 for
such Securities.

            The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount which is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the case amount of any sinking
fund payment may be subject to reduction as provided in Section 13.02. Each
sinking fund payment shall be applied to the redemption (or purchase by tender
or otherwise) of Securities of any series as provided for by the terms of such
Securities.

            SECTION 13.02. Satisfaction of Sinking Fund Payments with
Securities. In lieu of making all or any part of a mandatory sinking fund
payment with respect to any Securities of a series in cash, the Company may at
its option, at any time no more than 16 months and no less than 45 days prior to
the date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series (together with the unmatured Coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Company, except Securities of such series that have been redeemed through the
application of mandatory or optional sinking fund payments pursuant to the terms
of the Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such obligations and stating that the Securities of such
series were originally issued by the Company by way of bona fide sale or other
negotiation for value; provided that the Securities to be so credited have not
been previously so credited. The Securities to be so credited shall be received
and credited for such purpose by the Trustee at the redemption price for such
Securities, as specified in the Securities so to be redeemed, for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.

            SECTION 13.03. Redemption of Securities for Sinking Fund. Not less
than 45 days prior to each sinking fund payment date for any series of
securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.01) and the portion thereof, if any, which is to be satisfied by delivering
and crediting Securities pursuant to Section 13.02 and will also deliver to the
Trustee any Securities to be so delivered. Such Certificate shall be irrevocable
and upon its delivery the Company shall be obligated to make the cash payment or
payments therein referred to, if any, on or before the succeeding sinking fund
payment date. In the case of the failure of the Company to deliver such
Certificate (or, as required by this Indenture, the Securities and coupons, if
any, specified in such Certificate)
<PAGE>
                                      -74-


by the due date therefor, the sinking fund payment due on the succeeding sinking
fund payment date for such series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of the Securities of such series
subject to a mandatory sinking fund payment without the right to deliver or
credit securities as provided in Section 13.02 and without the right to make the
optional sinking fund payment with respect to such series at such time.

            Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Securities
of such series at the redemption price specified in such Securities with respect
to the sinking fund. Any sinking fund moneys not so applied or allocated by the
Trustee (or by the Company if the Company is acting as its own Paying Agent,
segregated and held in trust as provided in Section 10.03) for such series and
together with such payment (or such amount so segregated) shall be applied in
accordance with the provisions of this Section 13.03. Any and all sinking fund
moneys with respect to the Securities of any particular series held by the
Trustee (or if the Company is acting as its own Paying Agent, segregated and
held in trust as provided in Section 10.03) on the last sinking fund payment
date with respect to Securities of such series and not held for the payment or
redemption of particular Securities of such series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent),
together with other moneys, if necessary, to be deposited (or segregated)
sufficient for the purpose, to the payment of the principal of the Securities of
such series at Maturity. The Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 11.03 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 11.04. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Section 11.06. On or before each sinking fund
payment date, the Company shall pay to the Trustee (or, if the Company is acting
as its own Paying Agent, the Company shall segregate and hold in trust as
provided in Section 10.03) in cash a sum in the currency in which Securities of
such series are payable (except as provided pursuant to Section 3.01) equal to
the principal, premium, if any, and any interest accrued to the redemption date
for Securities or portions thereof to be redeemed on such sinking fund payment
date pursuant to this Section 13.03.

            Neither the Trustee nor the Company shall redeem any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Securities of
such series or of any Event of Default (other than an Event of Default occurring
as a consequence of this paragraph) with respect to the Securities of such
series, except that if the notice of redemption shall have been provided in
accordance with the provisions hereof, the Trustee (or the Company if the
Company is then acting as its own Paying Agent) shall redeem such Securities if
cash sufficient for that purpose shall be deposited with the Trustee (or
segregated by the Company) for that purpose in accordance with
<PAGE>
                                      -75-


the terms of this Article XII. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such default or Event of Default, be held as security for the
payment of the Securities and coupons, if any, of such series; provided,
however, that in case such default or Event of Default shall have been cured or
waived herein, such moneys shall thereafter be applied on the next sinking fund
payment date for the Securities of such series on which such moneys may be
applied pursuant to the provisions of this Section 13.03.

                                   ARTICLE XIV

                           Subordination of Securities

            SECTION 14.01. Securities Subordinate to Senior Debt. The Company
covenants and agrees, and each Holder of a Security, by its acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article, the payment of the principal of (and premium, if any)
and interest (including any Additional Interest) on each and all of the
Securities are hereby expressly made subordinate and junior in right of payment
to the prior payment in full of all amounts then due and payable in respect of
all Senior Debt.

            SECTION 14.02. Payment Over of Proceeds Upon Dissolution, etc. In
the event of (a) any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company, its creditors or its property, (b) any
proceeding for the liquidation, dissolution, or other winding up of the Company,
voluntary or involuntary, whether or not involving insolvency or bankruptcy
proceedings, (c) any assignment by the Company for the benefit of creditors or
(d) any other marshaling of the assets of the Company (each such event, if any,
herein sometimes referred to as a "Proceeding"), then the holders of Senior Debt
shall be entitled to receive payment in full of principal of (and premium, if
any) and interest, if any, on such Senior Debt, or provision shall be made for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, before the Holders of the Securities are entitled
to receive or retain any payment or distribution of any kind or character,
whether in cash, property or securities (including any payment or distribution
which may be payable or deliverable by reason of the payment of any other Debt
of the Company (including any series of the Securities) subordinated to the
payment of the Securities, such payment or distribution being hereinafter
referred to as a "Junior Subordinated Payment"), on account of principal of (or
premium, if any) or interest (including any Additional Interest) on the
Securities or on account of the purchase or other acquisition of Securities by
the Company or any Subsidiary and to that end the holders of Senior Debt shall
be entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities,
including any Junior Subordinated Payment, which may be payable or deliverable
in respect of the Securities in any such Proceeding; provided, however, that
holders of Senior Debt shall not be entitled to receive payment of any such
amounts to the extent that such holders would be required by the subordination
provisions of such Senior Debt
<PAGE>
                                      -76-


to pay such amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of business.

            In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
or distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Debt remaining unpaid, to the extent necessary to
pay all Senior Debt in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.

            For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan or reorganization or readjustment which securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article VIII shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by sale such properties and assets as an entirety, as the case may be,
shall, as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article VIII.

            SECTION 14.03. Prior Payment to Senior Debt Upon Acceleration of
Securities. In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall first be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Securities
will be entitled to receive or retain any payment or distribution of any kind or
character, whether in cash, property or securities (including any Junior
Subordinated Payment) by the Company on account of the principal of (or premium,
if any) or interest (including any Additional Interest) on the Securities or on
account of the purchase or other acquisition of Securities by the Company or any
Subsidiary; provided, however, that nothing in this Section
<PAGE>
                                      -77-


shall prevent the satisfaction of any sinking fund payment in accordance with
this Indenture or as otherwise specified as contemplated by Section 3.01 for the
Securities of any series by delivering and crediting pursuant to Section 13.02
or as otherwise specified as contemplated by Section 3.01 for the Securities of
any series Securities which have been acquired (upon redemption or otherwise)
prior to such declaration of acceleration; provided further, however, that
holders of Senior Debt shall not be entitled to receive payment of any such
amounts to the extent that such holders would be required by the subordination
provisions of such Senior Debt to pay such amounts over to the obligees on trade
accounts payable or other liabilities arising in the ordinary course of
business.

            In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to a Responsible Officer of Trustee
or, as the case may be, such Holder, then and in such event such payment shall
be paid over and delivered forthwith to the Company.

            The provisions of this Section shall not apply to any payment with
respect to which Section 14.02 would be applicable.

            SECTION 14.04. No Payment When Senior Debt in Default. (a) In the
event and during the continuation of any default by the Company in the payment
of principal of (or premium, if any) or interest, if any, on any Senior Debt, or
in the event that any event of default with respect to any Senior Debt shall
have occurred and be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or (b) in the event any
judicial proceeding shall be pending with respect to any such default in payment
or such event or default, then no direct or indirect payment or distribution of
any kind or character, whether in cash, property or securities (including any
Junior Subordinated Payment) shall be made or agreed to be made by the Company
on account of principal of (or premium, if any) or interest (including any
Additional Interest), if any, on the Securities or on account of any redemption,
repayment, retirement, purchase or other acquisition of any Securities by the
Company or any Subsidiary; provided, however, that nothing in this Section shall
prevent the satisfaction of any sinking fund payment in accordance with this
Indenture or as otherwise specified as contemplated by Section 3.01 for the
Securities of any series by delivering and crediting pursuant to Section 13.02
or as otherwise specified as contemplated by Section 3.01 for the Securities of
any series Securities which have been acquired (upon redemption or otherwise)
prior to such default in payment or event of default.

            In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the Company.
<PAGE>
                                      -78-


            The provisions of this Section shall not apply to any payment with
respect to which Section 14.02 would be applicable.

            SECTION 14.05. Payment Permitted If No Default. Nothing contained in
this Article or elsewhere in this Indenture or in any of the Securities shall
prevent (a) the Company, at any time except during the pendency of any
Proceeding referred to in Section 14.02 or under the conditions described in
Sections 14.03 and 14.04, from making payments at any time of principal of (and
premium, if any) or interest (including Additional Interest) on the Securities,
or (b) the application by the Trustee of any money deposited with it hereunder
to the payment of or on account of the principal of (and premium, if any) or
interest (including any Additional Interest) on the Securities or the retention
of such payment by the Holders, if, at the time of such payment by the Company
or application by the Trustee, as the case may be, it did not have knowledge
that such payment or application, as the case may be, would have been prohibited
by the provisions of this Article.

            SECTION 14.06. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment of all Senior Debt to the extent required under Sections
14.02 and 14.03 of this Indenture, or the provision for such payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of Senior
Debt, the Holders of the Securities shall be subrogated to the extent of the
payments or distributions made to the holders of such Senior Debt pursuant to
the provisions of this Article (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to Senior
Debt of the Company to substantially the same extent as the Securities are
subordinated to the Senior Debt and is entitled to like rights of subrogation by
reason of any payments or distributions made to holders of such Senior Debt) to
the rights of the holders of such Senior Debt to receive payments and
distributions of cash, property and securities applicable to the Senior Debt
until the principal of (and premium, if any) and interest on the Securities
shall be paid in full. For purposes of such subrogation or assignment, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt, and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.

            SECTION 14.07. Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as between the Company and the Holders of the Securities, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Securities the principal of (and premium, if any) and interest
(including any Additional Interest) on the Securities as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of the Securities and
creditors of the Company other than their rights in relation to the
<PAGE>
                                      -79-


holders of Senior Debt; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture including, without limitation, filing and voting claims in
any Proceeding, subject to the rights, if any, under this Article of the holders
of Senior Debt to receive cash, property and securities otherwise Payable or
deliverable to the Trustee or such Holder.

            SECTION 14.08. Trustee to Effectuate Subordination. Each Holder of a
Security by his or her acceptance thereof authorizes and directs the Trustee on
his or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination provided in this Article and
appoints the Trustee his or her attorney-in-fact for any and all such purposes.

            SECTION 14.09. No Waiver of Subordination Provisions. No right of
any present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or be otherwise charged with.

            SECTION 14.10. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of Senior Debt
or from any trustee, agent or representative therefor (whether or not the facts
contained in such notice are true); provided, however, that if the Trustee shall
not have received the notice provided for in this Section at least two Business
Days prior to the date upon which by the terms hereof any monies may become
payable for any purpose (including, without limitation, the payment of the
principal of (and premium, if any) or interest (including any Additional
Interest) on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary which may be received by it
within two Business Days prior to such date.

            SECTION 14.11. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Article
VI, and the Holders of the Securities shall be entitled to conclusively rely
upon any order or decree entered by any court of competent jurisdiction in which
such Proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of Securities, for the purpose of ascertaining the
Persons entitled to participate in such payment
<PAGE>
                                      -80-


or distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.

            SECTION 14.12. Trustee Not Fiduciary for Holders of Senior Debt. The
Trustee, in its capacity as trustee under this Indenture, shall not be deemed to
owe any fiduciary duty to the holders of Senior Debt and shall not be liable to
any such holders if it shall in good faith mistakenly pay over or distribute to
Holders of Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Debt shall be entitled by virtue of
this Article or otherwise.

            SECTION 14.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Debt which may at any time be held by it, to the same extent as any other
holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee
of any of its rights as such holder.

            SECTION 14.14. Article Applicable to Paying Agents. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee.

            SECTION 14.15. Certain Conversions or Exchanges Deemed Payment. For
purposes of this Article only, (a) the issuance and delivery of junior
securities upon conversion or exchange of Securities shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest (including any Additional Interest) on Securities or on
account of the purchase or other acquisition of Securities, and (b) the payment,
issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such Security. For the
purposes of this Section, the term "junior securities" means (i) shares of any
stock of any class of the Company and (ii) securities of the Company which are
subordinated in right of payment to all Senior Debt which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.
<PAGE>
                                      -81-


            This instrument may be executed in any number of counterparts, each
of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

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


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


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


                                       THE CHASE MANHATTAN BANK, as Trustee,


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

                                                                               1

                                                                       EXHIBIT A

                   [Form of Restricted Securities Certificate]

                        RESTRICTED SECURITIES CERTIFICATE

                (For transfers pursuant to ss. 3.05 and ss. 3.06
                      of the Junior Subordinated Indenture)

[_____________________________],
as Security Registrar
[address]

      Re:   ____% Junior Subordinated Securities of
            U.S.B. Holding Co., Inc. (the "Company")
                     (the "Securities")

            Reference is made to the Junior Subordinated Indenture, dated as of
________ ____, 1997 (the "Indenture"), between U.S.B. Holding Co., Inc. and The
Chase Manhattan Bank, as trustee (the "Trustee"). Terms used herein and defined
in the Indenture 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 principal amount
of 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 Security, they are held
through the Depositary in the name of the Undersigned, as or on behalf of the
Owner. If the Specified Securities are not represented by a Global Security,
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 Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with one of the following as indicated (check one):
<PAGE>

                                                                               2


___   (1)   transferred to the Company; 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  that  is  acquiring  the  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
Securities Registrar will refuse to register any of the 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 Securities such legal
opinions, certifications and other information as the Company 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 box (3) is checked, 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 Company and the Initial Purchasers.


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


                                       By: ___________________________________
                                           Name:
                                           Title:

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