<PAGE>





                 ==============================================








                        AMENDED AND RESTATED DECLARATION

                                    OF TRUST

                              PXRE CAPITAL TRUST I

                          Dated as of January 29, 1997








                 ==============================================











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                             CROSS-REFERENCE TABLE*

Section of Trust Indenture
Act of 1939, as amended                         Section of Declaration
-----------------------                         ----------------------

310(a)                                          5.3(a)
310(c)                                          Inapplicable
311(c)                                          Inapplicable
312(a)                                          2.2(a)
312(b)                                          2.2(b)
313                                             2.3
314(a)                                          2.4
314(b)                                          Inapplicable
314(c)                                          2.5
314(d)                                          Inapplicable
314(f)                                          Inapplicable
315(a)                                          3.9(b)
315(c)                                          3.9(a)
315(d)                                          3.9(a)
316(a)                                          Annex I
316(b)                                          Annex I
316(c)                                          3.6(e)




_____________________

*    This Cross-Reference Table does not constitute part of the Declaration and
     shall not affect the interpretation of any of its terms or provisions.








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                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                              PXRE CAPITAL TRUST I

                                January 29, 1997

               AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of January 29, 1997, by the Trustees (as defined herein), the
Sponsor (as defined herein), the Administrators (as defined herein) and by the
holders, from time to time, of undivided beneficial interests in the Trust to be
issued pursuant to this Declaration;

               WHEREAS, the Delaware Trustee, the Administrators and the Sponsor
established PXRE Capital Trust I (the "Trust"), a business trust under the
Delaware Business Trust Act pursuant to a Declaration of Trust dated as of
January 21, 1997 (the "Original Declaration"), and a Certificate of Trust filed
with the Secretary of State of the State of Delaware on January 21, 1997, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures of the Debenture Issuer;

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

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

               NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Administrators and the Institutional Trustee declare that all assets contributed
to the Trust will be held in trust for the benefit of the holders, from time to
time, of the securities representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions of this
Declaration.

                                    ARTICLE I

                         INTERPRETATION AND DEFINITIONS

               SECTION 1.1 Definitions.
                           -----------

               Unless the context otherwise requires:

               (a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this Section
1.1;









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

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

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

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

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

               "Administrative Action" has the meaning set forth in paragraph
4(c) of Annex I.

               "Administrators" means each of Gerald L. Radke, Sanford M. Kimmel
and Joan L. Cadd solely in such Person's capacity as Administrator of the Trust
created and continued hereunder and not in such Person's individual capacity, or
such Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.

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

               "Agent" means any Paying Agent.

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

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

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

               (b) such Person shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of such Person of any substantial part of its property, or


                                       2






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shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.

               "Book Entry Interest" means a beneficial interest in one or more
Global Capital Securities, ownership and transfers of which shall be maintained
and made through book entries by a Clearing Agency as described in Section 9.2.

               "Business Day" means any day other than Saturday, Sunday or any
other day on which banking institutions in New York City (in the State of New
York), Newark (in the State of New Jersey), or Charlotte (in the State of North
Carolina), are permitted or required by any applicable any applicable law to
close.

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

               "Capital Securities Guarantee" means the guarantee agreement to
be dated as of January 29, 1997, of the Sponsor in respect of the Capital
Securities.

               "Capital Securities" means the Initial Capital Securities and
Exchange Capital Securities.

               "Capital Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).

               "Certificate" means any certificate evidencing Securities.

               "Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Capital Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Capital Security and which shall
undertake to effect book entry transfers and pledges of the Capital Securities.

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

               "Closing Date" means the "Closing Date" under the Purchase
Agreement.

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

               "Commission" means the Securities and Exchange Commission.

               "Common Securities" has the meaning specified in Section 7.1(a).

                                       3





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               "Common Securities Guarantee" means the guarantee agreement to be
dated as of January 29, 1997 of the Sponsor in respect of the Common Securities.

               "Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-3. 

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

               "Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 765 Broad Street, Newark,
N.J. 07102.

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

               "Debenture Issuer" means PXRE Corporation, a Delaware
corporation, in its capacity as issuer of the Debentures under the Indenture.

               "Debenture Trustee" means First Union National Bank, a national
banking association, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.

               "Debentures" means the Initial Debentures and Exchange
Debentures.

               "Definitive Capital Securities" means Initial Definitive Capital
Securities and Exchange Definitive Capital Securities.

               "Delaware Trustee" has the meaning set forth in Section 5.2.

               "Depositary" means, with respect to the Capital Securities, DTC,
or another Clearing Agency.

               "Direct Action" has the meaning set forth in Section 3.8(e).

               "Distribution" has the meaning set forth in Annex I.

               "Distribution Payment Date" has the meaning set forth in Annex I.

               "DTC" means The Depository Trust Company, New York, New York, the
initial Clearing Agency.


                                       4





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<PAGE>

               "Event of Default" in respect of the Securities means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.

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

               "Exchange Capital Securities" has the meaning specified in
Section 7.1(a).

               "Exchange Capital Security Certificate" means a certificate
representing an Exchange Capital Security substantially in the form of Exhibit
A-2.

               "Exchange Certificate" means a Common Security Certificate or an
Exchange Capital Security Certificate.

               "Exchange Debentures" means 8.85% Junior Subordinated Deferrable
Interest Debentures due 2027 to be issued by the Debenture Issuer under the
Indenture to be exchanged with the Initial Debentures pursuant to the
Registration Rights Agreement.

               "Exchange Definitive Capital Securities" means any Exchange
Securities in definitive form issued by the Trust.

               "Exchange Global Capital Securities" means any Exchange Capital
Securities in global form issued by the Trust.

               "Exchange Securities" means Common Securities and Exchange
Capital Securities.

               "Extension Period" has the meaning set forth in paragraph 2(b) of
Annex I.

               "Fiduciary Indemnified Person" shall mean the Institutional
Trustee, the Delaware Trustee, any Affiliate of the Institutional Trustee or the
Delaware Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the Institutional
Trustee and the Delaware Trustee.

               "Global Capital Securities" means any Initial Global Capital
Securities and Exchange Global Capital Securities.

               "Holder" means a Person in whose name a Certificate representing
a Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act.

               "IAI" has the meaning set forth in Section 7.3(c).

               "Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.


                                       5





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<PAGE>

               "Indenture" means the Indenture dated as of January 29, 1997,
among the Debenture Issuer and the Debenture Trustee, as supplemented by any
indenture supplemental thereto pursuant to which the Debentures are to be
issued.

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

               "Initial Capital Securities" has the meaning specified in Section
7.1(a).

               "Initial Capital Security Certificate" means a certificate
representing an Initial Capital Security substantially in the form of Exhibit
A-1.

               "Initial Certificate" means a Common Security Certificate or an
Initial Capital Security Certificate.

               "Initial Debentures" means 8.85% Junior Subordinated Deferrable
Interest Debentures due 2027 to be issued by the Debenture Issuer under the
Indenture to be held by the Institutional Trustee or, upon a dissolution of the
Trust, the Depositary or the Holder, as the case may be, a specimen certificate
for such series of Debentures being Exhibit D.

               "Initial Definitive Capital Securities" means any Restricted
Definitive Capital Security and any other Initial Capital Securities in
definitive form issued by the Trust.

               "Initial Global Capital Securities" means any Rule 144A Global
Security and any other Initial Capital Securities in global form issued by the
Trust.

               "Initial Securities" means Common Securities and the Initial
Capital Securities.

               "Institutional Trustee" means the Trustee identified in Section
5.3(e) or any successor duly appointed hereunder meeting the eligibility
requirements set forth in Section 5.3.

               "interest" means any interest due on the Debentures including any
Compounded Interest, Special Payment and Additional Interest (as each such terms
are defined in the Indenture).

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

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

               "Investment Company Event" has the meaning set forth in paragraph
4(c) of Annex I.

               "Legal Action" has the meaning set forth in Section 3.8(e).

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

                                       6





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<PAGE>

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

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

               "Ministerial Action" has the meaning set forth in paragraph 4(c)
of Annex I.

               "Offering Memorandum" has the meaning set forth in Section 3.6.

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

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

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

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

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

               "Paying Agent" has the meaning specified in Section 7.2.

               "Payment Amount" has the meaning set forth in Section 6.1.

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

               "Property Account" has the meaning set forth in Section 3.8(c).

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

               "Purchase Agreement" means the Purchase Agreement for the
offering and sale of Capital Securities in the form of Exhibit E.

                                       7





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               "QIBs" has the meaning set forth in Section 7.3(a)(i).

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

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

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

               "Redemption Tax Opinion" has the meaning set forth in paragraph
4(c) of Annex I.

               "Registered Exchange Offer" has the meaning as set forth in the
Registration Rights Agreement.

               "Registrar" has the meaning set forth in Section 7.2.

               "Registration Rights Agreement" means the Registration Rights
Agreement relating to the Securities in the form of Exhibit F.

               "Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.

               "Relevant Trustee" has the meaning set forth in Section 5.7.

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

               "Restricted Capital Securities" means Rule 144A Global Capital
Securities and Restricted Definitive Capital Securities.

               "Restricted Definitive Capital Securities" has the meaning set
forth in Section 7.3(c).

               "Restricted Securities Legend" has the meaning set forth in
Section 9.2(g).

               "Rule 144A" means Rule 144A under the Securities Act.

               "Rule 144A Global Capital Security" has the meaning set forth in
Section 7.3(a).

                                       8





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

               "Securities" means the Common Securities and the Capital
Securities.

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

               "Securities Guarantees" means the Common Securities Guarantee and
the Capital Securities Guarantee.

               "Sponsor" means PXRE Corporation, a Delaware corporation, and
shall include its successors and assigns (subject to Article X of the
Indenture), in its capacity as sponsor of the Trust.

               "Super Majority" has the meaning set forth in Section 2.6(a)(ii).

               "Tax Event" has the meaning set forth in paragraph 4(c) of Annex
I.

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

               "25% in liquidation amount of the Securities" means, except as
provided in the terms of the Capital Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, holders of outstanding Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 25% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.

               "Transfer Agent" has the meaning set forth in Section 7.2.

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

               "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees

                                       9




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in accordance with the provisions hereof, and references herein to a Trustee or
the Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.

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

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

                                   ARTICLE II

                               TRUST INDENTURE ACT

               SECTION 2.1  Trust Indenture Act: Application.
                            --------------------------------

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

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

               (c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

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

               SECTION 2.2 Lists of Holders of Securities.
                           ------------------------------

               (a) Each of the Sponsor and the Administrators on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that neither the Sponsor nor the Administrators on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Administrators on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
therefor, a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Institutional Trustee. The Institutional Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity) provided

                                       10





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that the Institutional Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.

               (b) The Institutional Trustee shall comply with its obligations
under ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.

               SECTION 2.3 Reports by the Institutional Trustee. Within 60 days
after May 15 of each year, the Institutional Trustee shall provide to the
Holders of the Capital Securities such reports as are required by ss. 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by ss. 313
of the Trust Indenture Act. The Institutional Trustee shall also comply with the
requirements of ss. 313(d) of the Trust Indenture Act. The Sponsor shall
promptly notify the Institutional Trustee when the Capital Securities are listed
on any stock exchange.

               SECTION 2.4 Periodic Reports to Institutional Trustee. Each of
the Sponsor and the Administrators on behalf of the Trust shall provide to the
Institutional Trustee such documents, reports and information as required by ss.
314 (if any) and the compliance certificate required by ss. 314 of the Trust
Indenture Act in the form, in the manner and at the times required by ss. 314 of
the Trust Indenture Act and an Officers' Certificate as to its compliance with
all conditions and covenants under this Declaration, on an annual basis.

               SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrators on behalf of the Trust shall provide
to the Institutional Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in ss. 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to ss. 314(c)(1) may be
given in the form of an Officers' Certificate.

               SECTION 2.6 Events of Default; Waiver. (a) The Holders of a
Majority in liquidation amount of Capital Securities may, by vote or consent, on
behalf of the Holders of all of the Capital Securities, waive any past Event of
Default in respect of the Capital Securities and its consequences, provided
that, if the underlying Indenture Event of Default:


                      (i) is not waivable under the Indenture, the Event of
               Default under this Declaration shall also not be waivable; or

                      (ii) requires the consent or vote of greater than a
               majority in principal amount of the holders of the Debentures (a
               "Super Majority") to be waived under the Indenture, such Event of
               Default under this Declaration may only be waived by the vote or
               consent of the Holders of at least the proportion in liquidation
               amount of the Capital Securities that the relevant Super Majority
               represents of the aggregate principal amount of the Debentures
               outstanding.

               The foregoing provisions of this Section 2.6(a) shall be in lieu
of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
Indenture Event of Default shall cease to exist, and any Event of Default

                                       11





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with respect to the Capital Securities arising therefrom shall be deemed to have
been cured, for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Capital Securities or impair any right consequent thereon. Any waiver by the
Holders of the Capital Securities of an Event of Default with respect to the
Capital Securities shall also be deemed to constitute a waiver by the Holders of
the Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.

               The Holders of a Majority in liquidation amount of the Capital
Securities will have the right to direct the time, method and place of
conducting any proceeding of any remedy available to the Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee, including the right to direct the Institutional Trustee to exercise the
remedies available to it as holder of the Debentures; provided, however, that
(subject to the provisions of Section 3.9) the Institutional Trustee shall have
the right to decline to follow any such direction if the Institutional Trustee
shall determine that the action so directed would be unjustly prejudicial to the
Holders not taking part in such direction or if the Institutional Trustee, being
advised by counsel, determines that the action or proceeding so directed may not
lawfully be taken or if the Institutional Trustee, in good faith, by its board
of directors or trustees, executive committee, or a trust committee of directors
or trustees and/or Responsible Officers, shall determine that the action or
proceedings so directed would involve the Institutional Trustee in personal
liability.

               (b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote or consent, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that if the underlying Indenture Event
of Default:

                      (i) is not waivable under the Indenture, the Event of
               Default under this Declaration shall also not be waivable; or

                      (ii) requires the consent or vote of a Super Majority to
               be waived under the Indenture, such Event of Default under this
               Declaration may only be waived by the vote or consent of the
               Holders of at least the proportion in liquidation amount of the
               Common Securities that the relevant Super Majority represents of
               the aggregate principal amount of the Debentures outstanding;
               provided, further, that, notwithstanding (i) or (ii) above, each
               Holder of Common Securities will be deemed to have waived any
               such Indenture Event of Default and all Events of Default with
               respect to the Common Securities and their consequences until all
               Events of Default with respect to the Capital Securities have
               been cured, waived or otherwise eliminated, and until such Events
               of Default have been so cured, waived or otherwise eliminated,
               the Institutional Trustee will be deemed to be acting solely on
               behalf of the Holders of the Capital Securities and only the
               Holders of the Capital Securities will have the right to direct
               the Institutional Trustee in accordance with the terms of the
               Securities. The foregoing provisions

                                       12




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               of this Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A)
               and 316(a)(1)(B) of the Trust Indenture Act and ss.ss.
               316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
               hereby expressly excluded from this Declaration and the
               Securities, as permitted in the Trust Indenture Act. Subject to
               the foregoing provisions in this Section 2.6(b), upon such
               waiver, any such Indenture Event of Default shall cease to exist,
               and any Event of Default with respect to the Common Securities
               arising therefrom shall be deemed to have been cured, for every
               purpose of this Declaration, but no such waiver shall extend to
               any subsequent or other default or Event of Default with respect
               to the Common Securities or impair any right consequent thereon.

               (c) A waiver of an Indenture Event of Default by the
Institutional Trustee at the direction of the Holders of the Capital Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.

               SECTION 2.7 Events of Default; Notice. (a) The Institutional
Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the Securities,
notices of all defaults with respect to the Securities actually known to a
Responsible Officer of the Institutional Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.7(a) being hereby defined to be an Indenture Event of Default,
not including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided, however, that, except for a
default in the payment of principal of (or premium, if any) or interest on any
of the Debentures, the Institutional Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Institutional Trustee
in good faith determines that the withholding of such notice is in the interests
of the Holders of the Capital Securities.

               (b) The Institutional Trustee shall not be deemed to have
knowledge of any default except:

                      (i) a default under Sections 5.01(a) and 5.01(b) of the
               Indenture; or

                      (ii) any default as to which the Institutional Trustee
               shall have received written notice or of which a Responsible
               Officer of the Institutional Trustee charged with the
               administration of the Declaration shall have actual knowledge.

                                   ARTICLE III

                                  ORGANIZATION

               SECTION 3.1 Name. The Trust is named "PXRE Capital Trust I," as
such name may be modified from time to time by the Administrators following
written notice to the Holders

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<PAGE>

of Securities. The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Administrators.

               SECTION 3.2 Office. The address of the principal office of the
Trust is c/o PXRE Corporation, 399 Thornall Street, Edison, New Jersey 08837. On
ten (10) Business Days written notice to the Holders of Securities, the
Administrators may designate another principal office.

               SECTION 3.3 Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities representing undivided beneficial
interests in the assets of the Trust, (b) investing the gross proceeds from such
sale to acquire the Debentures and (c) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.

               SECTION 3.4 Authority. Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
in accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and are not intended be
trustees or fiduciaries with respect to the Trust or the Holders. The
Institutional Trustee shall have the right, but shall not be obligated except as
provided in Section 3.6, to perform those duties assigned to the Administrators.

               SECTION 3.5 Title to Property of the Trust. Except as provided in
Section 3.8 with respect to the Debentures and the Property Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.

               SECTION 3.6 Powers and Duties of the Trustees and the
Administrators. (a) The Institutional Trustee and the Administrators shall
conduct the affairs of the Trust in accordance with the terms of this
Declaration. Subject to the limitations set forth in paragraph (b) of this
Section, and in accordance with the following provisions (i) and (ii), the
Institutional Trustee and the Administrators shall have the authority to enter
into all transactions and agreements determined by the Institutional Trustee to
be appropriate in exercising the authority, express or implied, otherwise
granted to the Institutional Trustee or the Administrators, as the case may be,
under this Declaration, and to perform all acts in furtherance thereof,
including without limitation, the following:


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<PAGE>


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

                      (A) the issuance and sale of the Securities;

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

                      (C) assisting in the compliance with the Securities Act,
               applicable state securities or blue sky laws, and the Trust
               Indenture Act;

                      (D) to execute and file one or more registration
               statements relating to the Capital Securities contemplated by the
               Registration Rights Agreement and the preparation and filing of
               all periodic and other reports and other documents pursuant to
               the foregoing;

                      (E) if and at such time determined by the Sponsor,
               assisting in the designation of the Capital Securities for
               trading on any national stock exchange or the Nasdaq Stock
               Market's National Market;

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

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

                      (H) execution of the Securities in accordance with this
               Declaration;

                      (I) execution and delivery of closing certificates,
               pursuant to the Purchase Agreement and the application for a
               taxpayer identification number;

                      (J) unless otherwise determined by the Institutional
               Trustee or the holders of a Majority of the outstanding Capital
               Securities or Common Securities or as otherwise required by the
               Business Trust Act or the Trust Indenture Act, to execute on
               behalf of the Trust (either acting alone or together with any or
               all of the Administrators) any documents that the Administrators
               have the power to execute pursuant to this Declaration;

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

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                      (L) execution and delivery of letters or documents to, or
               instruments with DTC relating to the Capital Securities;

                      (M) to establish a record date with respect to all actions
               to be taken hereunder that require a record date be established,
               including and with respect to, for the purposes of ss. 316(c) of
               the Trust Indenture Act, Distributions, voting rights,
               redemptions and exchanges, and to issue relevant notices to the
               Holders of Capital Securities and Holders of Common Securities as
               to such actions and applicable record dates;

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

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


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

                      (A)  the establishment of the Property Account;

                      (B)  the receipt of the Debentures;

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

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

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

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

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

                      (H) after any Event of Default (provided that such Event
               of Default is not by or with respect to the Institutional
               Trustee) the taking of any action incidental to the foregoing as
               the Institutional Trustee may from time to time determine is
               necessary or advisable to give effect to the terms of this
               Declaration and protect


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<PAGE>

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

               (iii) The Institutional Trustee shall have the power and
        authority to act on behalf of the Trust with respect to any of the
        duties, liabilities, powers or the authority of the Administrators set
        forth in Section 3.6(a)(i)(E), (F) and (H) herein but shall not have a
        duty to do any such act unless specifically requested to do so in
        writing by the Sponsor, and shall then be fully protected in acting
        pursuant to such written request; and in the event of a conflict between
        the action of the Administrators and the action of the Institutional
        Trustee, the action of the Institutional Trustee shall prevail.

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

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

               (i) the preparation by the Trust of an offering memorandum (the
        "Offering Memorandum") in relation to the Capital Securities, including
        any amendments or supplements thereto and the taking of any action
        necessary to obtain an exemption from the Securities Act;

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


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

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

               (d) Notwithstanding anything herein to the contrary, the
Administrators, the Institutional Trustee, the Sponsor and the Holders of a
majority of the Common Securities are authorized and directed to conduct the
affairs of the Trust and to operate the Trust so that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act, or fail to be classified as a grantor trust for United
States Federal income tax purposes and so that the Debentures will be treated as
indebtedness of the Sponsor for United States Federal income tax purposes. In
this connection, the Institutional Trustee, the Sponsor and the Holders of a
majority of the Common Securities are authorized to take any action, not
inconsistent with applicable law, the Certificate of Trust or this Declaration,
as amended from time to time, and, in the case of the Sponsor, the Certificate
of Incorporation of the Sponsor, as the same may be amended and/or restated from
time to time, that each of the Institutional Trustee, the Sponsor and the
Holders of a majority of Common Securities determines in its discretion to be
necessary or desirable for such purposes, as long as such action does not
adversely affect the interests of the Holders of the Capital Securities in any
material respect or vary the terms of the Securities.

               (e) All expenses incurred by the Administrators or the Trustees
pursuant to this Section 3.6 shall be reimbursed by the Sponsor, and the
Trustees shall have no obligations with respect to such expenses.

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

               (g) Legal title to all Trust Property shall be vested at all
times in the Institutional Trustee (in its capacity as such) and shall be held
and administered by the Institutional Trustee for the benefit of the Trust and
neither the Administrator nor the Holders in accordance with this Declaration.

               SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Institutional Trustee shall cause the Trust not
to, engage in any activity other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Institutional Trustee
shall cause the Trust not to:

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

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

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


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

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

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

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

               SECTION 3.8 Powers and Duties of the Institutional Trustee. (a)
The legal title to the Debentures shall be owned by and held of record in the
name of the Institutional Trustee in trust for the benefit of the Holders of the
Securities. The right, title and interest of the Institutional Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.7. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.

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

                      (c)  The Institutional Trustee shall:

               (i) establish and maintain a segregated non-interest bearing
        trust account (the "Property Account") in the name of and under the
        exclusive control of the Institutional Trustee, and maintained in the
        Institutional Trustee's trust department, on behalf of the Holders of
        the Securities and, upon the receipt of payments of funds made in
        respect of the Debentures held by the Institutional Trustee, deposit
        such funds into the Property Account and make payments to the Holders of
        the Capital Securities and Holders of the Common Securities from the
        Property Account in accordance with Section 6.1. Funds in the Property
        Account shall be held uninvested until disbursed in accordance with this
        Declaration. The Property Account shall be an account that is maintained
        with a banking institution the rating on whose long-term unsecured
        indebtedness is at least equal to the rating assigned to the Capital
        Securities by a "nationally recognized statistical rating 


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organization", as that term is defined for purposes of Rule 436(g)(2) under the
Securities Act;

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

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

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

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

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

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

               (ii) a successor Institutional Trustee has been appointed and has
        accepted that appointment in accordance with Section 5.7.


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

               The Institutional Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Institutional Trustee shall not
take any action that is inconsistent with the purposes and functions of the
Trust set out in Section 3.3.

               SECTION 3.9 Certain Duties and Responsibilities of the Trustees
and Administrators.

               (a) The Institutional Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6), the Institutional
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

               (b) The duties and responsibilities of the Trustees and the
Administrators shall be as provided by this Declaration and, in the case of the
Institutional Trustee, by the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Declaration shall require the Trustees or
Administrators to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties hereunder, or in
the exercise of any of their rights or powers, if they shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
satisfactory to them against such risk or liability is not reasonably assured to
them. Whether or not therein expressly so provided, every provision of this
Declaration relating to the conduct or affecting the liability of or affording
protection to the Trustees or Administrators shall be subject to the provisions
of this Article. Nothing in this Declaration shall be construed to release (i)
an Administrator or Institutional Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct or (ii)
the Delaware Trustee from liability for its own grossly negligent action, its
own grossly negligent failure to act or its own willful misconduct. To the
extent that, at law or in equity, a Trustee or an Administrator has duties and
liabilities (including fiduciary duties) relating thereto to the Trust or to the
Holders, such Administrator or Trustee shall not be liable to the Trust or to
any Holder for such Trustee's or Administrator's good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of the Administrators or
Trustees otherwise existing at law or in equity, are agreed by the Sponsor and
the Holders to replace such other duties and liabilities of the Administrators
or Trustees.


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               (c) All payments made by the Institutional Trustee or a Paying
Agent in respect of the Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the
Institutional Trustee or a Paying Agent to make payments in accordance with the
terms hereof. Each Holder, by its acceptance of a Security, agrees that it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees and the Administrators are not personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security. This Section 3.9(c) does not limit the liability of the
Trustees expressly set forth elsewhere in this Declaration or, in the case of
the Institutional Trustee, in the Trust Indenture Act. This Section 3.9(c) does
not limit the ability of a Holder to pursue a Direct Action pursuant to Section
3.8(e).

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

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

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

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

               (iv) the Institutional Trustee shall not be liable for any
        interest on any money received by it except as it may otherwise agree
        with the Sponsor; and money held by the Institutional Trustee need not
        be segregated from other funds held by it except in relation to the
        Property Account maintained by the Institutional Trustee pursuant to
        Section 3.8(c)(i) and except to the extent otherwise required by law;
        and

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


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               SECTION 3.10 Certain Rights of Institutional Trustee. Subject to
the provisions of Section 3.9:

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

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

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

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

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

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

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


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security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities which might be incurred by it in compliance with such request or
direction;

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

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

               (j) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder
the Institutional Trustee (i) may request instructions from the Holders of the
Securities which instructions may not be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Institutional Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be fully protected in acting in accordance with such instructions;

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

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

               (m) except as set forth in Section 2.7(b)(i), the Institutional
Trustee shall not be charged with knowledge of an Event of Default unless a
Responsible Officer of the Institutional Trustee obtains actual knowledge of
such event or the Institutional Trustee receives written notice of such event
from Holders holding more than a majority of Capital Securities (based upon
liquidation amount);

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


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<PAGE>

               (o) no provision of this Declaration shall be deemed to impose
any duty or obligation on the Institutional Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Institutional
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty, including, but not limited to, those
powers and authorities described in Sections 3.4 and 3.6.

               SECTION 3.11 Delaware Trustee. Notwithstanding any other
provision of this Declaration other than Section 5.2, the Delaware Trustee shall
not be entitled to exercise any powers, nor shall the Delaware Trustee have any
of the duties and responsibilities of any of the Trustees or the Administrators
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of ss. 3807 of the Business Trust Act.

               SECTION 3.12 Execution of Documents. Subject to the provisions of
Section 3.11, unless otherwise determined in writing by the Institutional
Trustee, and except as otherwise required by the Business Trust Act, the
Institutional Trustee, or any one or more of the Administrators, as the case may
be, is authorized to execute on behalf of the Trust any documents that the
Trustees or the Administrators, as the case may be, have the power and authority
to execute pursuant to Section 3.6.

               SECTION 3.13 Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration, the Debentures or the Securities.

               SECTION 3.14 Duration of Trust. The Trust, unless terminated
pursuant to the provisions of Article VIII hereof, shall have existence for
fifty-five (55) years from the Closing Date.

               SECTION 3.15 Mergers. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other body, except as described in Section 3.15(b) and (c).

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

               (i) if the Trust is not the Survivor, such successor entity (the
        "Successor Entity") either:


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<PAGE>

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

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

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

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

               (iv) such merger, consolidation, amalgamation or replacement does
        not cause the Capital Securities (including any Successor Securities) to
        be downgraded by any nationally recognized statistical rating
        organization;

               (v)such merger, consolidation, amalgamation or replacement does
        not adversely affect the rights, preferences and privileges of the
        Holders of the Securities (including any Successor Securities) in any
        material respect (other than with respect to any dilution of such
        Holders' interests in the Successor Entity as a result of such merger,
        consolidation, amalgamation or replacement);

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

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

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

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

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


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<PAGE>

               (viii) the Sponsor guarantees the obligations of such Successor
        Entity under the Successor Securities at least to the extent provided by
        the Securities Guarantees.

                (c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or to be replaced by any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger or replacement
would cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.

               (d) The Administrators shall have furnished the Delaware Trustee
at least 5 Business Days prior written notice of the consummation of any merger,
consolidation, amalgamation or replacement: provided that failure to provide
such notice shall not affect the validity of any such transaction.

                                   ARTICLE IV

                                     SPONSOR

               SECTION 4.1 Sponsor's Purchase of Common Securities. The Sponsor
will purchase all of the Common Securities issued by the Trust, in an amount at
least equal to 3% of the capital of the Trust, at the same time as the Capital
Securities are sold.

               SECTION 4.2 Responsibilities of the Sponsor. In connection with
the issue and sale of the Capital Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:

               (a) to prepare and distribute the Offering Memorandum in relation
to the Capital Securities, including any supplements and amendments thereto;

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

               (c) to prepare for filing and request the Administrators to cause
the filing by the Trust, as may be appropriate, of an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing or quotation upon notice of issuance of any Capital
Securities; and


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<PAGE>

               (d) to negotiate the terms of and cause the Administrators to
execute on behalf of the Trust, the Purchase Agreement, the Registration Rights
Agreement and other related agreements providing for the sale of the Capital
Securities.

                                    ARTICLE V

                                    TRUSTEES

               SECTION 5.1 Number of Trustees. The number of Trustees initially
shall be two (2), and:

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

               (b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Capital Securities voting as a class at a meeting of
the Holders of the Capital Securities; provided, however, that, that there shall
be a Delaware Trustee if required by Section 5.2; and there shall always be one
Trustee who shall be the Institutional Trustee, and such Trustee may also serve
as Delaware Trustee if it meets the applicable requirements, in which case
Section 3.11 shall have no application to such entity in its capacity as
Institutional Trustee.

               SECTION 5.2 Delaware Trustee. If required by the Business Trust
Act, one Trustee (the "Delaware Trustee") shall be:

               (a) a natural person who is a resident of the State of Delaware;
or

               (b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, including ss.3807 of the Business Trust Act.

               SECTION 5.3 Institutional Trustee; Eligibility. (a) There shall
at all times be one Trustee which shall act as Institutional Trustee which
shall:

               (i) not be an Affiliate of the Sponsor or any Person involved in
        the organization or operation of the Sponsor;

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

               (iii) be a corporation organized and doing business under the
        laws of the United States of America or any State or Territory thereof
        or of the District of Columbia, or a corporation permitted by the
        Commission to act as an institutional trustee under the Trust Indenture
        Act, authorized under such laws to exercise corporate trust powers,
        having a combined capital and surplus of at least 50 million U.S.
        dollars ($50,000,000), and subject to supervision or examination by
        Federal, State, Territorial or District of Columbia authority. If such
        corporation publishes reports of condition at least annually,


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        pursuant to law or to the requirements of the supervising or examining
        authority referred to above, then for the purposes of this Section
        5.3(a)(iii), the combined capital and surplus of such corporation shall
        be deemed to be its combined capital and surplus as set forth in its
        most recent report of condition so published.

               (b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).

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

               (d) The Indenture, the Debt Securities (as defined therein)
issued or to be issued thereunder, the Declaration, the Securities issued or to
be issued hereunder and the Capital Securities Guarantees and Common Securities
Guarantees in connection therewith (including the Capital Securities Guarantee
in connection herewith) shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the proviso contained in ss. 310(b)(1)
of the Trust Indenture Act.

               (e) The initial Institutional Trustee shall be: First Union
National Bank.

               SECTION 5.4 Certain Qualifications of the Delaware Trustee
Generally. The Delaware Trustee shall be either a natural person who is at least
21 years of age or a legal entity that shall act through one or more Authorized
Officers.

               SECTION 5.5 Administrators. The initial Administrators shall be:

               Gerald L. Radke, Sanford M. Kimmel and Joan L. Cadd.

               Except where a requirement for action by a specific number of
Administrators is expressly set forth in this Declaration and except with
respect to any action the taking of which is the subject of a meeting of the
Administrators any action required or permitted to be taken by the
Administrators may be taken by, and any power of the Administrators may be
exercised by, or with the consent of, any one such Administrators.

               SECTION 5.6 Delaware Trustee. The initial Delaware Trustee shall
be:

               First Union Bank of Delaware,

               SECTION 5.7 Appointment, Removal and Resignation of Trustees and
Administrators. (a) No resignation or removal of any Trustee (the "Relevant
Trustee") and no appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of this Section 5.7.


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               Subject to the immediately preceding paragraph and Section 5.7(e)
below, a Relevant Trustee may resign at any time by giving written notice
thereof to the Holders. Unless an Event of Default shall have occurred and be
continuing, a successor Relevant Trustee shall be appointed by the Holders of a
Majority in liquidation amount of the Common Securities. If an Event of Default
shall have occurred and is continuing, the Institutional Trustee will appoint a
successor. If appointing a successor, the Institutional Trustee shall request
from at least three Persons meeting the eligibility requirements set forth in
this Declaration, its expenses and charges to serve as the successor Relevant
Trustee on a form provided by the Administrators, and select the Person who
agrees to the lowest expense and charges. If the Institutional Trustee fails to
appoint a successor, then the Holders of at least 25% in liquidation amount of
the Capital Securities may appoint a successor. If the instrument of acceptance
by the successor Trustee required by Section 5.7 shall not have been delivered
to the Relevant Trustee within 60 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the Trust, any
court of competent jurisdiction for the appointment of a successor Relevant
Trustee. The Institutional Trustee shall have no liability for the selection of
such successor pursuant to this Section 5.7.

               Unless an Event of Default shall have occurred and be continuing,
the Institutional Trustee or the Delaware Trustee, or both of them, may be
removed by the act of the Holders of a Majority in liquidation amount of the
Common Securities, at any time. If an Event of Default has occurred and is
continuing, the Institutional Trustee or the Delaware Trustee, or both of them,
may be removed by the act of the Holders of a Majority in liquidation amount of
the Capital Securities.

               If any Trustee shall be removed by the Holders of outstanding
Capital Securities, the Holders of Capital Securities, by act of the Holders of
at least 25% in liquidation amount of the Capital Securities then outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees, and such successor Trustee shall comply with the
applicable requirements of this Section 5.7. If no successor Relevant Trustee
shall have been so appointed by the Capital Securityholders and accepted
appointment in the manner required by this Section 5.7 any Holder who has been a
Holder of Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Relevant Trustee.

               The Institutional Trustee shall give notice of each resignation
and each removal of a Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 5.7(b) and shall give notice to the
Sponsor. Each notice shall include the name of the successor Relevant Trustee
and the address of its Corporate Trust Office if it is the Institutional
Trustee.

               Notwithstanding the foregoing or any other provision of this
Declaration, in the event a Delaware Trustee who is a natural person dies or
becomes incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by the Institutional Trustee following
the procedures in this Section 5.7 (with the successor being a Person who
satisfies the eligibility requirement for a Delaware Trustee set forth in this
Declaration).


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

               (c) If no successor Institutional Trustee or successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Institutional Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition any court of competent jurisdiction for
appointment of a successor Institutional Trustee or successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a successor Institutional Trustee or successor Delaware Trustee,
as the case may be.

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

               (e) Holders of the Capital Securities will have no right to
appoint or remove the Administrators, who may be appointed, removed or replaced
solely by the Sponsor as the holder of all of the Common Securities of the
Trust.

               SECTION 5.8 Vacancies Among Trustees. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
the Trustees or, if there are more than two, a majority of the Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with an a Trustee appointed in accordance with Section 5.7.

               SECTION 5.9 Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled by the appointment of a Trustee in


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<PAGE>

accordance with Section 5.7, the Institutional Trustee shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by this Declaration.

               SECTION 5.10 Meetings of the Trustees and the Administrators.
Meetings of the Administrators shall be held from time to time upon the call of
any Administrator. Regular meetings of the Administrators may be held at a time
and place fixed by resolution of the Administrators. Notice of any in-person
meetings of the Administrators shall be hand delivered or otherwise delivered in
writing (including by facsimile, with a hard copy by overnight courier) not less
than 48 hours before such meeting. Notice of any telephonic meetings of the
Administrators or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting. The
presence (whether in person or by telephone) of an Administrator at a meeting
shall constitute a waiver of notice of such meeting except where the
Administrator attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Administrators may be taken at a meeting by vote of a majority of the
Administrators present (whether in person or by telephone) and eligible to vote
with respect to such matter, provided that a Quorum is present, or without a
meeting by the unanimous written consent of the Administrators. Meetings of the
Administrators shall be held from time to time upon the call of any
Administrator.

               SECTION 5.11 Delegation of Power. (a) Any Trustee or
Administrator may, by power of attorney consistent with applicable law, delegate
to any other natural person over the age of 21 his or her power for the purpose
of executing any documents contemplated in Section 3.6; and

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

               SECTION 5.12 Conversion, Consolidation or Succession to Business.
Any Person into which the Institutional Trustee or the Delaware Trustee, as the
case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee, as the case may be, hereunder without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided such Person shall be otherwise qualified and eligible under this
Article.


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                                   ARTICLE VI

                                  DISTRIBUTIONS

               SECTION 6.1 Distributions. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
any Compounded Interest and Special Payments), premium, if any, and/or principal
on the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution of the Payment Amount to Holders (a "Distribution").

                                   ARTICLE VII

                             ISSUANCE OF SECURITIES

               SECTION 7.1 General Provisions Regarding Securities. (a) The
Administrators shall on behalf of the Trust issue one series of capital
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Initial Capital
Securities") and to be exchanged pursuant to the Registration Rights Agreement
for a second series of Capital Securities (the "Exchange Capital Securities" and
together with the initial series of Capital Securities, the "Capital
Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities"). The Trust shall issue no securities
or other interests in the assets of the Trust other than the Capital Securities
and the Common Securities and the aggregate liquidation amount of all series of
Securities issued by the Trust and outstanding at any time shall not exceed
$103,093,000. The Capital Securities rank pari passu and payment thereon shall
be made Pro Rata with the Common Securities except that, where an Event of
Default has occurred and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Capital Securities.

               (b) The Certificates shall be signed on behalf of the Trust by
one or more Administrators. Such signature shall be the manual signature of any
present or any future Administrator. In case any Administrator of the Trust who
shall have signed any of the Securities shall cease to be such Administrator
before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Administrator; and any Certificate may be
signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be an Administrator of the Trust, although at
the date of the execution and delivery of the Declaration any such person was
not such an Administrator. A Capital Security shall not be valid until
authenticated by the manual signature of an authorized officer of the
Institutional Trustee. Such signature shall be conclusive evidence that the
Capital Security has 


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been authenticated under this Declaration. Upon written order of the Trust
signed by one Administrator, the Institutional Trustee shall authenticate the
Capital Securities for original issue. The Institutional Trustee may appoint an
authenticating agent acceptable to the Trust to authenticate the Capital
Securities. A Common Security need not be so authenticated.

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

               (d) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.

               (e) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration and the Capital Securities
Guarantee.

               SECTION 7.2 Paying Agent, Transfer Agent and Registrar. The Trust
shall maintain in Newark, New Jersey an office or agency where the Capital
Securities may be presented for payment ("Paying Agent"), and an office or
agency where Securities may be presented for registration of transfer (the
"Transfer Agent"). The Trust shall keep or cause to be kept at such office or
agency a register for the purpose of registering Securities and transfers and
exchanges of Securities, such register to be held by a registrar (the
"Registrar"). The Trust may appoint the Paying Agent, the Registrar, the
Transfer Agent and may appoint one or more additional paying agents or one or
more co-Registrars, or one or more co-Transfer Agents in such other locations as
it shall determine. The term "Paying Agent" includes any additional paying
agent, the term "Registrar" includes any additional registrar or co-Registrar
and the term "Transfer Agent" includes any additional transfer agent. The Trust
may change any Paying Agent without prior notice to any Holder. The Trust shall
notify the Institutional Trustee of the name and address of any Paying Agent,
Transfer Agent and Registrar not a party to this Declaration. The Trust has
appointed the Institutional Trustee to act as Paying Agent, Transfer Agent and
Registrar for the Capital Securities and the Common Securities. The Trust or any
of its Affiliates may act as Paying Agent or Registrar.

               SECTION 7.3 Form and Dating. The Initial Capital Securities and
the Institutional Trustee's certificate of authentication shall be substantially
in the form of Exhibit A-1, the Exchange Capital Securities and the
Institutional Trustee's certificate of authentication shall be substantially in
the form of Exhibit A-2 and the Common Securities shall be substantially in the
form of Exhibit A-3, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be typed, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrators, as conclusively evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, the Depositary, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such


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legend not contained in Exhibit A-1, A-2 or A-3 to the Institutional Trustee in
writing. Each Capital Security shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1, A-2 and A-3 are part of the terms of this
Declaration and to the extent applicable, the Institutional Trustee, the
Delaware Trustee, the Administrators and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby. Initial Capital Securities will be issued only in blocks
having a stated liquidation amount of not less than $100,000. The Exchange
Capital Securities will be issued only in blocks having a stated liquidation
amount of not less than $1,000.

               (a)  Global Capital Securities.

               (i) The Initial Capital Securities are being offered and sold by
the Trust pursuant to the Purchase Agreement. Securities offered and sold to
Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A as provided in
the Purchase Agreement, shall be issued in the form of one or more permanent
global Securities in definitive, fully registered form without distribution
coupons with the appropriate global legends and the Restricted Securities Legend
(each, a "Rule 144A Global Capital Security"), which shall be deposited on
behalf of the purchasers of the Capital Securities represented thereby with the
Institutional Trustee, at its New Jersey office, as custodian for the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Trust and authenticated by the Institutional
Trustee as hereinafter provided. The number of Capital Securities represented by
the Rule 144A Global Capital Security may from time to time be increased or
decreased by adjustments made on the records of the Institutional Trustee and
the Depositary or its nominee as hereinafter provided.

               (ii) In the event the Initial Global Security is tendered in a
Registered Exchange Offer, it shall be exchanged for interests in a single,
permanent global security in definitive, fully registered form without
distribution coupons. Upon issuance such Exchange Global Security shall be
deposited on behalf of the holders of the Exchange Capital Securities
represented thereby with the Institutional Trustee, at its New Jersey office, as
custodian for the Depositary, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Trust and authenticated by the
Institutional Trustee as hereinafter provided.

               (b) Book-Entry Provisions. This Section 7.3(b) shall apply only
to Global Capital Securities as may be authorized by the Trust to be deposited
with or on behalf of the Depositary. The Trust shall execute and the
Institutional Trustee shall, in accordance with this Section 7.3, authenticate
and deliver initially one or more Global Capital Securities that (a) shall be
registered in the name of Cede & Co. or other nominee of the Depositary and (b)
shall be delivered by the Institutional Trustee to the Depositary or pursuant to
the Depositary's instructions, held by the Institutional Trustee as custodian
for the Depositary. Clearing Agency Participants shall have no rights under this
Declaration with respect to any Global Capital Security held on their behalf by
the Depositary or by the Institutional Trustee as the custodian of the
Depositary or under such Global Capital Security, and the Depositary may be
treated by the Trust, the Institutional Trustee and any agent of the Trust or
the Institutional Trustee as the 


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absolute owner of such Global Capital Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Institutional Trustee or any agent of the Trust or the Institutional Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and the
Clearing Agency Participants, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Capital Security.

               (c)  Definitive Capital Securities.

               (i) Except as provided in Section 7.5 and Section 9.2(e), owners
of beneficial interests in the Rule 144A Global Capital Security will not be
entitled to receive physical delivery of Definitive Capital Securities.
Purchasers of Initial Securities who are institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
("IAIs"), but are not QIBs will receive Initial Capital Securities in the form
of individual certificates in definitive, fully registered form without
distribution coupons and with the Restricted Securities Legend ("Restricted
Definitive Capital Securities"); provided, however, that upon transfer of such
Restricted Definitive Capital Securities to a QIB, such Restricted Definitive
Capital Securities will, unless the Rule 144A Global Capital Security has
previously been exchanged, be exchanged for an interest in a Rule 144A Capital
Global Security pursuant to the provisions set forth in Section 9.2. Restricted
Definitive Securities will bear the Restricted Securities Legend unless removed
in accordance with this Section 7.3 or Section 9.2.

               (ii) In the event Initial Definitive Capital Securities are
tendered in a Registered Exchange Offer, they will be exchanged for certificated
securities in definitive, fully registered form, without coupons and without the
Restricted Securities Legend; or, at the option of the Holder, as an interest in
the Exchange Global Capital Security issued pursuant to Section 7.1(a).

               SECTION 7.4 Mutilated, Destroyed, Lost or Stolen Certificates.
If: (a) any mutilated Certificates should be surrendered to the Registrar, or if
the Registrar shall receive evidence to their satisfaction of the destruction,
loss or theft of any Certificate; and

               (b) there shall be delivered to the Registrar and the
Administrators such security or indemnity as may be required by them to keep
each of them harmless; then, in the absence of notice that such Certificate
shall have been acquired by a bona fide purchaser, an Administrator on behalf of
the Trust shall execute (and in the case of a Capital Security Certificate, the
Institutional Trustee shall authenticate) and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 7.4, the Registrar or the Administrators may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.


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               SECTION 7.5 Temporary Securities.

               Until definitive Securities are ready for delivery, the Trust may
prepare and, in the case of the Capital Securities, the Institutional Trustee
shall authenticate temporary Securities. Temporary Securities shall be
substantially in form of definitive Securities but may have variations that the
Trust considers appropriate for temporary Securities. Without unreasonable
delay, the Trust shall prepare and, in the case of the Capital Securities, the
Institutional Trustee shall authenticate definitive Securities in exchange for
temporary Securities.

               SECTION 7.6  Cancellation.

               The Trust at any time may deliver Securities to the Institutional
Trustee for cancellation. The Registrar shall forward to the Institutional
Trustee any Securities surrendered to them for registration of transfer,
redemption or payment. The Institutional Trustee shall promptly cancel all
Securities surrendered for registration of transfer, payment, replacement or
cancellation and shall dispose of canceled Securities as the Trust directs. The
Trust may not issue new Securities to replace Securities that it has paid or
redeemed or that have been delivered to the Institutional Trustee for
cancellation.

                                  ARTICLE VIII

                      DISSOLUTION AND TERMINATION OF TRUST

               SECTION 8.1 Dissolution and Termination of Trust. (a) The Trust
shall dissolve:

               (i) unless earlier terminated, on January 21, 2052, the
        expiration of the term of the Trust;

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

               (iii) (other than in connection with a merger, consolidation or
        similar transaction not prohibited by the Indenture, this Declaration or
        the Securities Guarantees, as the case may be) upon the filing of a
        certificate of dissolution or its equivalent with respect to the
        Sponsor; upon the consent of Holders of a Majority in liquidation amount
        of the Securities voting together as a single class to file a
        certificate of cancellation with respect to the Trust or upon the
        revocation of the charter of the Sponsor and the expiration of 90 days
        after the date of revocation without a reinstatement thereof;

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

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


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<PAGE>

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

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

               (b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), and after satisfaction of liabilities to
creditors of the Trust (whether by payment or by making reasonable provision for
payment thereof), and subject to the terms set forth in Annex I, the
Administrators shall terminate the Trust by filing a certificate of cancellation
with the Secretary of State of the State of Delaware.

               (c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.

                                   ARTICLE IX

                              TRANSFER OF INTERESTS

               SECTION 9.1 General. (a) Where Capital Securities are presented
to the Registrar or a co-registrar with a request to register a transfer or to
exchange them for an equal number of Capital Securities represented by different
certificates, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Trust shall issue and the Institutional Trustee
shall authenticate Capital Securities at the Registrar's request.

               (b) Upon issuance of the Common Securities, the Sponsor shall
acquire and retain direct or indirect beneficial and record ownership of the
Common Securities and for so long as the Securities remain outstanding, the
Sponsor shall maintain direct or indirect 100% ownership of the Common
Securities, provided, however, that any permitted successor of the Sponsor under
the Indenture may succeed to the Sponsor's ownership of the Common Securities.

               (c) Capital Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Declaration
and in the terms of the Securities, provided, however, that Initial Capital
Securities may be transferred only in blocks having a stated liquidation amount
of not less than $100,000 (i.e., 100 Capital Securities) and the Exchange
Capital Securities may be transferred only in blocks having a stated liquidation
amount of $1,000. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void and will be deemed to be
of no legal effect whatsoever and any such transferee shall be deemed not to be
the holder of such Capital Securities for any purpose, including but not limited
to the receipt of Distributions on such Capital Securities, and such transferee
shall be deemed to have no interest whatsoever in such Capital Securities.

               (d) The Trustees shall provide for the registration of Securities
and of transfers of Securities, which will be effected without charge but only
upon payment (with such indemnity as


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<PAGE>

the Trustees may require) in respect of any tax or other governmental charges
that may be imposed in relation to it. Upon surrender for registration of
transfer of any Securities, the Trustees shall cause one or more new Securities
to be issued in the name of the designated transferee or transferees. Every
Security surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Security surrendered for registration of transfer shall be canceled by the
Trustees. A transferee of a Security shall be entitled to the rights and subject
to the obligations of a Holder hereunder upon the receipt by such transferee of
a Security. By acceptance of a Security, each transferee shall be deemed to have
agreed to be bound by this Declaration.

               (e) The Trust shall not be required (i) to issue, register the
transfer of, or exchange any Capital Securities during a period beginning at the
opening of business 15 days before the day of any selection of Capital
Securities for redemption and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all Holders of Capital Securities to be redeemed, or (ii) to register the
transfer or exchange of any Capital Security so selected for redemption in whole
or in part, except the unredeemed portion of any Capital Security being redeemed
in part.

               SECTION 9.2  Transfer Procedures and Restrictions.

               (a)  General.

                      (i) If Initial Capital Securities are issued upon the
               transfer, exchange or replacement of Initial Capital Securities
               bearing the Restricted Securities Legend, or if a request is made
               to remove such Restricted Securities Legend on Initial Capital
               Securities, the Initial Capital Securities so issued shall bear
               the Restricted Securities Legend, or the Restricted Securities
               Legend shall not be removed, as the case may be, unless there is
               delivered to the Trust such satisfactory evidence, which may
               include an opinion of counsel licensed to practice law in the
               State of New York, as may be reasonably required by the Trust,
               that neither the legend nor the restrictions on transfer set
               forth therein are required to ensure that transfers thereof
               comply with the provisions of Rule 144A or Rule 144 under the
               Securities Act or, with respect to Restricted Capital Securities,
               that such Securities are not "restricted" within the meaning of
               Rule 144 under the Securities Act. Upon provision of such
               satisfactory evidence, the Institutional Trustee, at the written
               direction of the Trust, shall authenticate and deliver Capital
               Securities that do not bear the legend.

                      (ii) If a transfer of Initial Capital Securities is made
               pursuant to an effective Shelf Registration Statement, the
               Restricted Securities Legend shall be removed from such Initial
               Capital Securities so transferred at the request of the Holder.


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                      (iii) Any Initial Capital Securities which are presented
               to the Registrar for exchange pursuant to a Registered Exchange
               Offer shall be exchanged for Exchange Capital Securities of equal
               liquidation amount upon surrender to the Registrar of the Initial
               Capital Securities to be exchanged in accordance with the terms
               of the Registered Exchange Offer; provided that the Initial
               Capital Securities so surrendered for exchange are duly endorsed
               and accompanied by a letter of transmittal or written instrument
               of transfer in form satisfactory to the Institutional Trustee and
               the Registrar and duly executed by the Holder thereof or such
               Holder's attorney who shall be duly authorized in writing to
               execute such document on the behalf of such Holder. 

               (b) Transfer and Exchange of Definitive Capital Securities. When
Initial Definitive Capital Securities or Exchange Definitive Capital Securities
are presented to the Registrar

               (x) to register the transfer of such Initial Definitive Capital
        Securities or Exchange Definitive Capital Securities, or

               (y) to exchange such Initial Definitive Capital Securities or
        Exchange Definitive Capital Securities for an equal number of Initial
        Definitive Capital Securities or Exchange Definitive Capital Securities,
        respectively, of another number,

the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Capital Securities surrendered for transfer or exchange:

                      (i) shall be duly endorsed or accompanied by a written
               instrument of transfer in form reasonably satisfactory to the
               Trust and the Registrar, duly executed by the Holder thereof or
               his attorney duly authorized in writing; and

                      (ii) in the case of Initial Definitive Capital Securities
               that are Restricted Definitive Capital Securities, are being
               transferred or exchanged pursuant to an effective registration
               statement under the Securities Act or pursuant to clause (A) (B),
               (C) or (D) below, and are accompanied by the following additional
               information and documents, as applicable:

                             (A) if such Restricted Definitive Capital
                      Securities are being delivered to the Registrar by a
                      Holder for registration in the name of such Holder,
                      without transfer, a certification from such Holder to that
                      effect;

                             (B) if such Restricted Definitive Capital
                      Securities are being transferred pursuant to an exemption
                      from registration in accordance with Rule 144 under the
                      Securities Act: (i) a certification to that effect and
                      (ii) if the Trust so requests, evidence reasonably
                      satisfactory to the Trust as to the compliance with the
                      restrictions set forth in the Restricted Securities
                      Legend;


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<PAGE>

                             (C) if such Restricted Definitive Capital
                      Securities are transferred to QIBs in accordance with Rule
                      144A under the Securities Act, the transferee QIBs must
                      take delivery of their interests in the Capital Securities
                      in the form of a beneficial interest in the Rule 144A
                      Global Capital Security in accordance with Section 9.2(c);
                      or

                             (D) if such Restricted Definitive Capital
                      Securities are being transferred to a Person who is an
                      IAI, but it is not a QIB, upon the delivery of a
                      certificate by the transferee IAI substantially in the
                      form of Exhibit B hereto and such other opinion,
                      certification and/or other information as may be
                      reasonably required by the Trust or the Sponsor, the
                      Institutional Trustee shall cancel or cause to be canceled
                      such Restricted Definitive Securities being transferred
                      and concurrently therewith, the Trust shall issue and the
                      Institutional Trustee shall authenticate, upon written
                      order of any Administrator, an appropriate number of
                      Restricted Definitive Capital Securities.

               (c) Restrictions on Transfer of an Initial Definitive Capital
Security for a Beneficial Interest in an Initial Global Capital Security. An
Initial Definitive Capital Security may not be exchanged for a beneficial
interest in an Initial Global Capital Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Institutional Trustee of an
Initial Definitive Capital Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trust, together with:

               (i)if such Initial Definitive Capital Security is a Restricted
        Capital Security, certification, substantially in the form set forth of
        Exhibit C hereto, that such Definitive Capital Security is being
        transferred to a QIB in accordance with Rule 144A under the Securities
        Act; and

               (ii) whether or not such Definitive Capital Security is a
        Restricted Capital Security, written instructions directing the
        Institutional Trustee to make, or to direct the Depositary to make, an
        adjustment on its books and records with respect to such Initial Global
        Capital Security to reflect an increase in the number of the Initial
        Capital Securities represented by the Initial Global Capital Security,

then the Institutional Trustee shall cancel such Initial Definitive Capital
Security and cause, or direct the Depositary to cause, the aggregate number of
Initial Capital Securities represented by the Global Capital Security to be
increased accordingly. If no Initial Global Capital Securities are then
outstanding, the Trust shall issue and the Institutional Trustee shall
authenticate, upon written order of any Administrator, an appropriate number of
Initial Capital Securities in global form.

               (d) Transfer and Exchange of Global Capital Securities. The
transfer and exchange of Initial Global Capital Securities or Exchange Global
Capital Securities or beneficial interests therein shall be effected through the
Depositary, in accordance with this Declaration 


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<PAGE>

(including applicable restrictions on transfer set forth in the Restricted
Securities Legend) and the procedures of the Depositary therefor.

Notwithstanding any other provisions of this Declaration, a Global Capital
Security may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.

               (e) Transfer of a Beneficial Interest in a Global Capital
Security for a Definitive Capital Security.

               (i) Any Person having a beneficial interest in an Initial Global
        Capital Security that is being transferred or exchanged pursuant to an
        effective registration statement under the Securities Act or pursuant to
        clause (A) or (B) below may upon request, and if accompanied by the
        information specified below, exchange such beneficial interest for an
        Initial Definitive Capital Security or Exchange Capital Security, as the
        case may be, representing the same number of Initial Capital Securities
        or Exchange Definitive Capital Securities, as the case may be. Upon
        receipt by the Institutional Trustee from the Depositary or its nominee
        on behalf of any Person having a beneficial interest in an Initial
        Global Capital Security or an Exchange Global Security, as the case may
        be, of written instructions or such other form of instructions as is
        customary for the Depositary or the Person designated by the Depositary
        as having such a beneficial interest in such Global Capital Security and
        in the case of an Initial Global Security the following additional
        information and documents (all of which may be submitted by facsimile):

                             (A) if such beneficial interest is being
                      transferred pursuant to an exemption from registration in
                      accordance with Rule 144 under the Securities Act: (i) a
                      certification to that effect from the transferee or
                      transferor and (ii) if the Trust so requests, additional
                      evidence reasonably satisfactory to them as to the
                      compliance with the restrictions set forth in the
                      Restricted Securities Legend; or

                             (B) if such beneficial interest is being
                      transferred to a Person who is an IAI, but is not a QIB,
                      upon the delivery of a certificate by the transferee IAI
                      substantially in the form of Exhibit B hereto and such
                      other opinion, certification and/or other information as
                      may be reasonably required by the Trust and the Sponsor,

        then the Institutional Trustee will cause, in accordance with the
        standing instructions and procedures of the Depositary, the aggregate
        liquidation amount of the Global Capital Security to be reduced on its
        books and records and, following such reduction, the Trust will issue
        and the Institutional Trustee will authenticate, upon written order of
        any Administrator, an appropriate number of Definitive Capital
        Securities.

               (ii) Definitive Capital Securities issued in exchange for a
        beneficial interest in a Global Capital Security pursuant to this
        Section 9.2(e) shall be registered in such names and in such authorized
        denominations as the Depositary, pursuant to instructions from


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        Clearing Agency Participants or indirect participants or otherwise,
        shall instruct the Institutional Trustee. The Institutional Trustee
        shall deliver such Capital Securities to the Persons in whose names such
        Capital Securities are so registered in accordance with the instructions
        of the Depositary.

               (f) Authentication of Definitive Capital Securities. If at any
time:

               (i) the Depositary notifies the Trust that the Depositary is
        unwilling or unable to continue as Depositary for the Global Capital
        Securities and a successor Depositary for the Global Capital Securities
        is not appointed by the Trust at the direction of the Sponsor within 90
        days after delivery of such notice; or

               (ii) the Trust, in its sole discretion, notifies the
        Institutional Trustee in writing that it elects to cause the issuance of
        Definitive Capital Securities under this Declaration,

then the Trust will execute, and the Institutional Trustee, upon receipt of a
written order of the Trust signed by one Administrator requesting the
authentication and delivery of Definitive Capital Securities to the Persons
designated by the Trust, will authenticate and deliver Definitive Capital
Securities, in an aggregate principal amount equal to the principal amount of
Global Capital Securities, in exchange for such Global Capital Securities.

               (g)  Legend.

               Except as permitted by Section 9.2(a), each Initial Capital
Security certificate evidencing the Rule 144A Global Capital Securities and the
Restricted Definitive Capital Securities (and all Initial Capital Securities
issued in exchange therefor or substitution thereof) shall bear a legend (the
"Restricted Securities Legend") in substantially the following form:

               THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR 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 PXRE CORPORATION (THE
"COMPANY") OR PXRE CAPITAL TRUST I (THE "TRUST") OR ANY AFFILIATE OF THE COMPANY
OR THE TRUST WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTIONS TERMINATION DATE") ONLY (A) TO THE COMPANY
OR THE TRUST, (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"


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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 THAT IS 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 COMPANY'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUST. THE HOLDER OF THIS SECURITY AGREES THAT
IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. SECURITIES OWNED BY A PURCHASER
THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTIONS TERMINATION DATE.

               (h) Cancellation or Adjustment of Global Capital Security. At
such time as all beneficial interests in a Global Capital Security have either
been exchanged for Definitive Capital Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Capital Security shall be returned to the
Depositary for cancellation or retained and canceled by the Institutional
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Capital Security is exchanged for Definitive Capital Securities, Capital
Securities represented by such Global Capital Security shall be reduced and an
adjustment shall be made on the books and records of the Institutional Trustee
(if it is then the Securities Custodian for such Global Capital Security) with
respect to such Global Capital Security, by the Institutional Trustee to reflect
such reduction.

               (i) Obligations with Respect to Transfers and Exchanges of
Capital Securities.

               (i)To permit registrations of transfers and exchanges, the Trust
        shall execute and the Institutional Trustee shall authenticate
        Definitive Capital Securities and Global Capital Securities at the
        Registrar's request;

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


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<PAGE>

               (iii) The Registrar shall not be required to register the
        transfer of or exchange of (A) any Capital Security during a period
        beginning at the opening of business 15 days before the day of any
        selection of any Capital Security for redemption set forth in the terms
        and ending at the close of business on the earliest date on which the
        relevant notice of redemption is deemed to have been given to all
        Holders of Capital Securities to be redeemed, and (B) any Capital
        Security so selected for redemption in whole or in part, except the
        unredeemed portion of any Capital Security being redeemed in part; or

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

               SECTION 9.3 Deemed Security Holders. The Trust, the
Administrators, the Trustees, the Paying Agent, the Transfer Agent or the
Registrar may treat the Person in whose name any Certificate shall be registered
on the books and records of the Trust as the sole holder of such Certificate and
of the Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Administrators, the Trustees, the
Paying Agent, the Transfer Agent or the Registrar shall have actual or other
notice thereof.

               SECTION 9.4 Notices to Clearing Agency. Whenever a notice or
other communication to the Capital Security Holders is required under this
Declaration, unless and until Definitive Capital Securities shall have been
issued to the beneficial owners of Capital Securities pursuant to Section 9.2(e)
or Section 9.2(f), the Administrators shall give all such notices and
communications specified herein to be given to the Capital Security Holders to
the Clearing Agency, and shall have no notice obligations to the beneficial
owners of Capital Securities.

               SECTION 9.5 Appointment of Successor Clearing Agency. If any
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Capital Securities, the Institutional Trustee, in its sole
discretion, appoint a successor Clearing Agency with respect to such Capital
Securities.

                                    ARTICLE X

                           LIMITATION OF LIABILITY OF

                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

        SECTION 10.1 Liability. (a) Except as expressly set forth in this
Declaration, the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:

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<PAGE>
<PAGE>


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

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

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

               (c) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware; provided,
however, that the Holder of Common Securities shall be liable for all the debts
and obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.

               SECTION 10.2 Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions;
provided, however, notwithstanding anything herein to the contrary, none of the
Delaware Trustee or its officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees and agents shall be liable for
any such loss, damage or claim unless incurred by reason of such Person's gross
negligence or willful misconduct with respect to such acts or omissions.

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

               SECTION 10.3 Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict 


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<PAGE>

the duties and liabilities of an Indemnified Person otherwise existing at law or
in equity (other than the duties imposed on the Institutional Trustee under the
Trust Indenture Act), are agreed by the parties hereto to replace such other
duties and liabilities of the Indemnified Person.

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

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

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

               SECTION 10.4 Indemnification. (a) (i) The Sponsor shall
indemnify, to the full extent permitted by law, any Indemnified Person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was an Indemnified Person against expenses (including
reasonable attorneys' fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.

               (ii) The Sponsor shall indemnify, to the full extent permitted by
        law, any Indemnified Person who was or is a party or is threatened to be
        made a party to any threatened, pending or completed action or suit by
        or in the right of the Trust to procure a judgment in its favor by
        reason of the fact that he is or was an Indemnified Person against
        expenses (including reasonable attorneys' fees and expenses) actually
        and reasonably incurred by him in connection with the defense or
        settlement of such action or suit if he acted in good faith and in a
        manner he reasonably believed to be in or not opposed to the best
        interests of the Trust and except that no such indemnification shall be
        made in respect of any claim, issue or matter as to which such
        Indemnified Person shall have been adjudged to be liable to the Trust
        unless and only to the extent that the Court of Chancery of Delaware or
        the court in which such action or suit was brought shall determine upon
        application that, despite the adjudication of liability but in view of
        all the circumstances


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<PAGE>

        of the case, such person is fairly and reasonably entitled to indemnity
        for such expenses which such Court of Chancery or such other court shall
        deem proper.

               (iii) To the extent that an Indemnified Person shall be
        successful on the merits or otherwise (including dismissal of an action
        without prejudice or the settlement of an action without admission of
        liability) in defense of any action, suit or proceeding referred to in
        paragraphs (i) and (ii) of this Section 10.4 (a), or in defense of any
        claim, issue or matter therein, he shall be indemnified, to the full
        extent permitted by law, against expenses (including reasonable
        attorneys' fees) actually and reasonably incurred by him in connection
        therewith.

               (iv) Any indemnification of an Administrator under paragraphs (i)
        and (ii) of this Section 10.4(a) (unless ordered by a court) shall be
        made by the Sponsor only as authorized in the specific case upon a
        determination that indemnification of the Indemnified Person is proper
        in the circumstances because he has met the applicable standard of
        conduct set forth in paragraphs (i) and (ii). Such determination shall
        be made (1) by the Administrators by a majority vote of a Quorum
        consisting of such Administrators who were not parties to such action,
        suit or proceeding, (2) if such a Quorum is not obtainable, or, even if
        obtainable, if a Quorum of disinterested Administrators so directs, by
        independent legal counsel in a written opinion, or (3) by the Common
        Security Holder of the Trust.

               (v) To the fullest extent permitted by law, expenses (including
        reasonable attorneys' fees and expenses) incurred by an Indemnified
        Person in defending a civil, criminal, administrative or investigative
        action, suit or proceeding referred to in paragraphs (i) and (ii) of
        this Section 10.4 (a) shall be paid by the Sponsor in advance of the
        final disposition of such action, suit or proceeding upon receipt of an
        undertaking by or on behalf of such Indemnified Person to repay such
        amount if it shall ultimately be determined that he is not entitled to
        be indemnified by the Sponsor as authorized in this Section 10.4 (a).
        Notwithstanding the foregoing, no advance shall be made by the Sponsor
        if a determination is reasonably and promptly made (i) by the
        Administrators by a majority vote of a Quorum of disinterested
        Administrators, (ii) if such a Quorum is not obtainable, or, even if
        obtainable, if a quorum of disinterested Administrators so directs, by
        independent legal counsel in a written opinion or (iii) the Common
        Security Holder of the Trust, that, based upon the facts known to the
        Administrators, counsel or the Common Security Holder at the time such
        determination is made, such Indemnified Person acted in bad faith or in
        a manner that such Person did not believe to be in or not opposed to the
        best interests of the Trust, or, with respect to any criminal
        proceeding, that such Indemnified Person believed or had reasonable
        cause to believe his conduct was unlawful. In no event shall any advance
        be made in instances where the Administrators, independent legal counsel
        or the Common Security Holder reasonably determine that such Person
        deliberately breached his duty to the Trust or its Common or Capital
        Security Holders.


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               (vi) The indemnification and advancement of expenses provided by,
        or granted pursuant to, the other paragraphs of this Section 10.4 (a)
        shall not be deemed exclusive of any other rights to which those seeking
        indemnification and advancement of expenses may be entitled under any
        agreement, vote of stockholders or disinterested directors of the
        Sponsor or Capital Security Holders of the Trust or otherwise, both as
        to action in his official capacity and as to action in another capacity
        while holding such office. All rights to indemnification under this
        Section 10.4(a) shall be deemed to be provided by a contract between the
        Sponsor and each Indemnified Person who serves in such capacity at any
        time while this Section 10.4 (a) is in effect. Any repeal or
        modification of this Section 10.4(a) shall not affect any rights or
        obligations then existing.

               (vii) The Sponsor or the Trust may purchase and maintain
        insurance on behalf of any Person who is or was an Indemnified Person
        against any liability asserted against him and incurred by him in any
        such capacity, or arising out of his status as such, whether or not the
        Sponsor would have the power to indemnify him against such liability
        under the provisions of this Section 10.4 (a).

               (viii) For purposes of this Section 10.4 (a), references to "the
        Trust" shall include, in addition to the resulting or surviving entity,
        any constituent entity (including any constituent of a constituent)
        absorbed in a consolidation or merger, so that any Person who is or was
        a director, trustee, officer or employee of such constituent entity, or
        is or was serving at the request of such constituent entity as a
        director, trustee, officer, employee or agent of another entity, shall
        stand in the same position under the provisions of this Section 10.4 (a)
        with respect to the resulting or surviving entity as he would have with
        respect to such constituent entity if its separate existence had
        continued.

               (ix) The indemnification and advancement of expenses provided by,
        or granted pursuant to, this Section 10.4(a) shall, unless otherwise
        provided when authorized or ratified, continue as to a Person who has
        ceased to be an Indemnified Person and shall inure to the benefit of the
        heirs, executors and administrators of such a Person. This Section 10.4
        shall survive the termination of this Declaration.

               SECTION 10.5 Outside Businesses. Any Covered Person, the Sponsor,
the Delaware Trustee and the Institutional Trustee (subject to Section 5.3(c))
may engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the Holders of Securities shall have no rights
by virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware


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Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.

               SECTION 10.6  Compensation; Fees.  The Sponsor agrees:

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

               (b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision of
this Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to, in the case of the
Institutional Trustee, its negligence or bad faith or, in the case of the
Delaware Trustee, its gross negligence or bad faith.

               To the fullest extent permitted by law, the parties intend that
the provisions of Section 3561 of Title 12 of the Delaware Code shall not apply
to the Trust and that the compensation payable hereby shall not be subject to
review by any court of competent jurisdiction, whether pursuant to Section 3560
of Title 12 of the Delaware Code or otherwise.

               The provisions of this Section 10.6 shall survive the dissolution
of the Trust and the termination of this Declaration and the removal or
resignation of any Trustee.

               No Trustee may claim any lien or charge on any property of the
Trust as a result of any amount due pursuant to this Section 10.6.

                                   ARTICLE XI

                                   ACCOUNTING

               SECTION 11.1 Fiscal Year. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the Code.

               SECTION 11.2 Certain Accounting Matters. (a) At all times during
the existence of the Trust, the Administrators shall keep, or cause to be kept,
full books of account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust. The books of account shall be
maintained on the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied. The books of account and
the records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrators.


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               (b) The Administrators shall cause to be prepared and delivered
to each of the Holders of Securities, within 90 days after the end of each
Fiscal Year of the Trust, annual financial statements of the Trust, including a
balance sheet of the Trust as of the end of such Fiscal Year, and the related
statements of income or loss.

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

               (d) The Sponsor shall cause to be duly prepared and filed an
annual United States federal income tax return on a Form 1041 or such other form
required by United States federal income tax law, and any other annual income
tax returns required to be filed by the Sponsor on behalf of the Trust with any
state or local taxing authority.

               SECTION 11.3 Banking. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Property Account and no
other funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts (including the Property Account) shall be
designated by the Institutional Trustee.

               SECTION 11.4 Withholding. The Trust and the Administrators shall
comply with all withholding requirements under United States federal, state and
local law. The Trust shall request, and the Holders shall provide to the Trust,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrators
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Trust is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a Distribution in the amount of the withholding to the
Holder. In the event of any claimed overwithholding, Holders shall be limited to
an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.

                                   ARTICLE XII

                             AMENDMENTS AND MEETINGS

               SECTION 12.1 Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by


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               (i) the Institutional Trustee; and

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

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

               (i) unless the Institutional Trustee shall have first received

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

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

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

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

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

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

               (c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the powers,
preferences or special rights of any Holder of Securities may be effected only
with such additional requirements as may be set forth in Annex I hereto.

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

               (e) Sections 3.15(c), 9.1(b) and 9.1(c) and this Section 12.1
shall not be amended without the consent of all of the Holders of the
Securities.

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


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               (g) the rights of the holders of the Capital Securities under
Article V to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Capital Securities.

               (h) Subject to Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:

               (i) cure any ambiguity;

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

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

               (iv) to modify, eliminate and add to any provision of this
        Declaration to such extent as may be necessary to ensure that the Trust
        will not be required to register as an "investment company" under the
        Investment Company Act and that the Trust will be classified for United
        States federal income tax purposes at all times as a grantor trust; and

               (v) to modify, eliminate and add to any provision of this
        Declaration to such extent as may be necessary; provided, however, that
        no such modification, elimination or addition shall adversely affect the
        powers, preferences or special rights of Holders of Securities.

               SECTION 12.2 Meetings of the Holders of Securities; Action by
Written Consent. (a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrators (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, if any. The Administrators shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrators one or more calls
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Securities exercising the right
to call a meeting and only those Securities represented by such Certificates
shall be counted for purposes of determining whether the required percentage set
forth in the second sentence of this paragraph has been met.

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

               (i) notice of any such meeting shall be given to all the Holders
        of Securities having a right to vote thereat at least 7 days and not
        more than 60 days before the date of such meeting. Whenever a vote,
        consent or approval of the Holders of Securities is permitted or
        required under this Declaration or the rules of any stock exchange on
        which 


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<PAGE>

        the Capital Securities are listed or admitted for trading, if any, such
        vote, consent or approval may be given at a meeting of the Holders of
        Securities. Any action that may be taken at a meeting of the Holders of
        Securities may be taken without a meeting if a consent in writing
        setting forth the action so taken is signed by the Holders of Securities
        owning not less than the minimum amount of Securities in liquidation
        amount that would be necessary to authorize or take such action at a
        meeting at which all Holders of Securities having a right to vote
        thereon were present and voting. Prompt notice of the taking of action
        without a meeting shall be given to the Holders of Securities entitled
        to vote who have not consented in writing. The Administrators may
        specify that any written ballot submitted to the Security Holder for the
        purpose of taking any action without a meeting shall be returned to the
        Trust within the time specified by the Administrators;

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

               (iii) unless the Business Trust Act, this Declaration, the terms
        of the Securities, the Trust Indenture Act or the listing rules of any
        stock exchange on which the Capital Securities are then listed for
        trading, if any, otherwise provides, the Administrators, in their sole
        discretion, shall establish all other provisions relating to meetings of
        Holders of Securities, including notice of the time, place or purpose of
        any meeting at which any matter is to be voted on by any Holders of
        Securities, waiver of any such notice, action by consent without a
        meeting, the establishment of a record date, quorum requirements, voting
        in person or by proxy or any other matter with respect to the exercise
        of any such right to vote.

                                  ARTICLE XIII

                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
                              AND DELAWARE TRUSTEE

               SECTION 13.1 Representations and Warranties of Institutional
Trustee. The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee, that:


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                      (a) the Institutional Trustee is a national banking
        association with trust powers and authority to execute and deliver, and
        to carry out and perform its obligations under the terms of, this
        Declaration;

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

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

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

               SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee, that:

                      (a) The Delaware Trustee is a national banking association
        or a Delaware banking corporation with trust powers, and is duly
        organized and validly existing, with power and authority to execute and
        deliver, and to carry out and perform its obligations under the terms
        of, this Declaration.

                      (b) The Delaware Trustee has been authorized to perform
        its obligations under the Certificate of Trust and this Declaration.
        This Declaration under Delaware law constitutes a legal, valid and
        binding obligation of the Delaware Trustee, enforceable against it in
        accordance with its terms, subject to applicable bankruptcy,
        reorganization, moratorium, insolvency, and other similar laws affecting
        creditors' rights generally and to general principles of equity
        (regardless of whether considered in a proceeding in equity or at law).

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

                      (d) The Delaware Trustee is a natural person who is a
        resident of the State of Delaware or, if not a natural person, an entity
        which has its principal place of business in the

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State of Delaware and, in either case, a Person that satisfies for the Trust the
requirements of Section 3807 of the Business Trust Act.

                                   ARTICLE XIV

                                  MISCELLANEOUS

               SECTION 14.1 Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by first class mail, as follows:

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

                             PXRE Corporation
                             399 Thornall Street
                             Edison, New Jersey  08837
                             Attention:  Treasurer

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

                             First Union Bank of Delaware
                             One Rodney Square
                             920 King Street, 1st Floor
                             Wilmington, Delaware 19801-7475
                             Attention:  Stephen J. Kaba

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

                             First Union National Bank
                             765 Broad Street
                             Newark, New Jersey 07102
                             Attention: Corporate Trust Department

               (d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):

                             PXRE Corporation
                             399 Thornall Street
                             Edison, New Jersey  08837
                             Attention:  Treasurer


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

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

               SECTION 14.2 Governing Law. This Declaration and the rights of
the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to the principles of conflict of laws of the State
of Delaware or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Delaware; provided, however,
that there shall not be applicable to the Trust, the Trustees or this
Declaration any provision of the laws (statutory or common) of the State of
Delaware pertaining to trusts (other than the Business Trust Act) that relate to
or regulate, in a manner inconsistent with the terms hereof (a) the filing with
any court or governmental body or agency of trustee accounts or schedules of
trustee fees and charges, (b) affirmative requirements to post bonds for
trustees, officers, agents or employees of a trust, (c) the necessity for
obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (d) fees or other sums
payable to trustees, officers, agents or employees of a trust, (e) the
allocation of receipts and expenditures to income or principal, (f) restrictions
or limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets or (g) the establishment of fiduciary or other
standards of responsibility or limitations on the acts or powers of trustees
that are inconsistent with the limitations or liabilities or authorities and
powers of the Trustees as set forth or referenced in this Declaration. Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.

               SECTION 14.3 Intention of the Parties. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.

               SECTION 14.4 Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.

               SECTION 14.5 Successors and Assigns. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.


                                       57





<PAGE>
<PAGE>

               SECTION 14.6 Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.

               SECTION 14.7 Counterparts. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees and Administrators to any
of such counterpart signature pages. All of such counterpart signature pages
shall be read as though one, and they shall have the same force and effect as
though all of the signers had signed a single signature page.












                                       58





<PAGE>
<PAGE>


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


                                           FIRST UNION BANK OF DELAWARE
                                               as Delaware Trustee

                                           By: /s/ Stephen J. Kaba
                                               ----------------------------
                                               Name:  Stephen J. Kaba
                                               Title  Vice President


                                           FIRST UNION NATIONAL BANK
                                               as Institutional Trustee


                                           By: /s/ Rick Barnes
                                               ----------------------------
                                               Name:  Rick Barnes
                                               Title: Assistant Vice President


                                           PXRE CORPORATION,
                                               as Sponsor


                                           By: /s/ Gerald L. Radke
                                               --------------------------------
                                               Name:  Gerald L. Radke
                                               Title: President


                                               /s/ Gerald L. Radke
                                              ---------------------------------
                                               , as Administrator


                                               /s/ Sanford M. Kimmel
                                              ---------------------------------
                                               , as Administrator


                                               /s/ Joan Cadd
                                              ---------------------------------
                                               , as Administrator


                                       59






<PAGE>
<PAGE>

                                     ANNEX I

                                    TERMS OF

          8.85% CAPITAL TRUST PASS-THROUGH SECURITIES 'sm' (TRUPS 'sm')*

               Pursuant to Section 7.1 of the Amended and Restated Declaration
of Trust, dated as of January 29, 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in the
Declaration, as defined in the Offering Memorandum):

               1. Designation and Number. (a) Capital Securities. 100,000
Capital Securities of PXRE Capital Trust I (the "Trust"), with an aggregate
stated liquidation amount with respect to the assets of the Trust of one hundred
million dollars ($100,000,000) and a stated liquidation amount with respect to
the assets of the Trust of $1,000 per Capital Security, are hereby designated
for the purposes of identification only as "8.85% Capital Trust Pass-through
Securities"'sm' (the "Capital Securities"). The Capital Security Certificates
evidencing the Capital Securities shall be substantially in the form of Exhibit
A-1 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice or to conform
to the rules of any stock exchange on which the Capital Securities are listed,
if any.

               (b) Common Securities. 3,093 Common Securities of the Trust (the
"Common Securities"). The Common Security Certificates evidencing the Common
Securities shall be substantially in the form of Exhibit A-2 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.

               2. Distributions. (a) Distributions payable on each Security will
be fixed at a rate per annum of 8.85% (the "Coupon Rate") of the stated
liquidation amount of $1,000 per Security, such rate being the rate of interest
payable on the Debentures to be held by the Institutional Trustee. Except as set
forth below in respect of an Extension Period, Distributions in arrears for more
than one semiannual period will bear interest thereon compounded semiannually at
the Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes cash distributions and any such
compounded distributions payable unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Trust has funds legally
available therefor. The amount of Distributions payable for any period will be
computed for any 


_____________________

*    Salomon Brothers Inc has filed applications with the United States Patent
     and Trademark Office for the registration of the "Capital Trust
     Pass-through Securities" and the "TruPS" service marks.



                                      I-1





<PAGE>
<PAGE>

full semiannual period on the basis of a 360-day year of twelve 30-day months
and the actual number of days elapsed per 30-day month.

               (b) Distributions on the Securities will be cumulative, will
accrue from January 29, 1997, and will be payable, subject to extension of
distribution payment periods as described herein, semiannually in arrears on
February 1, and August 1 of each year, commencing on August 1, 1997 (each a
"Distribution Payment Date") when, as and if available for payment. The
Debenture Issuer has the right under the Indenture to defer payments of interest
on the Debentures by extending the interest payment period (each an "Extension
Period") at any time and from time to time on the Debentures, subject to the
conditions described below, although such interest would continue to accrue on
the Debentures at a rate of 8.85% per annum, compounded semiannually to the
extent permitted by law during any Extension Period. If such right is exercised,
semiannual distributions on the Securities will also be deferred (though such
distributions would continue to accrue at the distribution rate of 8.85% per
annum, compounded semiannually to the extent permitted by law) during any
Extension Period. Such right to extend any interest payment period in respect of
the Debentures is limited to Extension Periods, each not exceeding 10
consecutive semiannual periods, provided, however, that no Extension Period
shall be initiated while accrued interest from a prior, completed Extension
Period is unpaid or while the Debenture Issuer is in default in the payment of
interest that has become due and payable on the Debentures; and, provided,
further, that no Extension Period shall extend beyond the date of maturity of
the Debentures. In the event that the Debenture Issuer exercises this right,
then, during any Extension Period (a) the Debenture Issuer shall not declare or
pay dividends on, make a distribution with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or rights to acquire such capital stock (other than (i) purchases or
acquisitions of shares of any such capital stock or rights to acquire such
capital stock in connection with the satisfaction by the Debenture Issuer of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of the Debenture Issuer's capital stock or rights to acquire
such capital stock or the exchange or conversion of one class or series of the
Debenture Issuer's capital stock or rights to acquire such capital stock for
another class or series of the Debenture Issuer's capital stock or rights to
acquire such capital stock, (iii) the purchase of fractional interests in shares
of the Debenture Issuer's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged or
(iv) dividends and distributions made on the Debenture Issuer's capital stock or
rights to acquire such capital stock, in each case with the Debenture Issuer's
capital stock or rights to acquire such capital stock), or make guarantee
payments (other than payments under the Capital Securities Guarantee and the
Common Securities Guarantee) with respect to the foregoing, and (b) the
Debenture Issuer shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities issued by the
Debenture Issuer that rank pari passu with or junior to such Debentures. Prior
to the termination of any such Extension Period in respect of the Debentures,
the Debenture Issuer may further extend the interest payment period; provided
that each such Extension Period in respect of the Debentures, together with all
such previous and further extensions thereof, may not exceed 10 consecutive
semiannual periods or extend beyond the maturity of the Debentures. Upon the
termination of any Extension Period of the Debentures and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements. If Distributions are deferred, the


                                      I-2





<PAGE>
<PAGE>

Distributions due shall be paid on the date that the related Extension Period
terminates, or, if such date is not a Distribution Payment Date, on the
immediately following Distribution Payment Date, to Holders of the Securities as
they appear on the books and records of the Trust on the record date immediately
preceding such date. Distributions on the Securities must be paid on the dates
payable (after giving effect to any Extension Period) to the extent that the
Trust has funds available for the payment of such distributions in the Property
Account of the Trust. The Trust's funds available for Distribution to the
Holders of the Securities will be limited to payments received from the
Debenture Issuer. The payment of Distributions out of moneys held by the Trust
is guaranteed by the Guarantor pursuant to the Securities Guarantees.

               (c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates.

               (i) While the Capital Securities are held solely in book-entry
        only form, the relevant record dates shall be one Business Day prior to
        the relevant payment dates which payment dates correspond to the
        interest payment dates on the Debentures. Such Distributions will be
        paid through the Institutional Trustee who will hold amounts received in
        respect of the Debentures in the Property Account for the benefit of the
        Holders of the Securities. Subject to any applicable laws and
        regulations and the provisions of the Declaration, each such payment in
        respect of the Capital Securities will be made as described below.

               The Depository Trust Company ("DTC") will act as securities
        depository for the Capital Securities. Distributions on the Capital
        Securities held in book-entry form will be made to DTC in immediately
        available funds. Participants in DTC include securities brokers and
        dealers, banks, trust companies, clearing corporations and certain other
        organizations ("Direct Participants"). Access to the DTC system is also
        available to others, such as securities brokers and dealers, banks and
        trust companies that clear transactions through or maintain a direct or
        indirect custodial relationship with a Direct Participant, either
        directly or indirectly ("Indirect Participants"). DTC's practice is to
        credit Direct Participants' accounts on the relevant payment date in
        accordance with their respective holdings shown on DTC's records unless
        DTC has reason to believe that it will not receive payments on such
        payment date. Payments by Direct Participants and Indirect Participants
        to beneficial owners will be governed by standing instructions and
        customary practices and will be the responsibility of such Direct
        Participants and Indirect Participants and not of DTC, the Trust or the
        Company, subject to any statutory or regulatory requirements as may be
        in effect from time to time. Payment of distributions to DTC is the
        responsibility of the Trust, disbursement of such payments to Direct
        Participants is the responsibility of DTC, and disbursement of such
        payments to the beneficial owners is the responsibility of Direct
        Participants and Indirect Participants.

               DTC is under no obligation to perform or continue to perform such
        procedures, and such procedures may be discontinued at any time. None of
        PXRE, the Trust or the Issuer Trustees will have any responsibility for
        the performance by DTC or its Direct Participants or Indirect
        Participants under the rules and procedures governing DTC. The


                                      I-3





<PAGE>
<PAGE>

        relevant record dates for the Common Securities shall be the same record
        dates as for the Capital Securities.

               (ii) At any time when the Capital Securities are not held solely
        in book-entry only form, the relevant record dates shall be selected by
        the Administrators, which dates shall be 15 days before the relevant
        payment dates. Payments in respect of Capital Securities held in
        registered definitive form will be made by check to the Holder entitled
        thereto. Distributions payable on any Securities that are not punctually
        paid on any Distribution Payment Date, as a result of the Debenture
        Issuer having failed to make a payment under the Debentures, as the case
        may be, when due (taking into account any Extension Period), will cease
        to be payable to the Person in whose name such Securities are registered
        on the relevant record date, and such defaulted Distribution will
        instead be payable to the Person in whose name such Securities are
        registered on the special record date or other specified date determined
        in accordance with the Indenture. If any date on which Distributions are
        payable on the Securities is not a Business Day, then payment of the
        Distribution payable on such date will be made on the next succeeding
        day that is a Business Day (and without any interest or other payment in
        respect of any such delay) except that, if such Business Day 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 such date.

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

               3. Liquidation Distribution Upon Dissolution. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust
(each a "Liquidation") other than in connection with a redemption of the
Debentures, the Holders of the Securities on the date of such Liquidation, will
be entitled to receive out of the assets of the Trust available for distribution
to Holders of Securities, after paying or making reasonable provision to pay all
claims and obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, an amount equal to the aggregate of the stated liquidation
amount of $1,000 per Security plus accrued and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"), unless
in connection with such Liquidation, Debentures in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of, with identical
premium to, if any, such Securities, with an interest rate equal to the Coupon
Rate of, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on, and having the same record date as, such
Securities, after the payment or the making of reasonable provision to pay all
claims and obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, shall be distributed on a Pro Rata basis to the Holders of
the Securities in exchange for such Securities, except in the case of a
Liquidation occurring on expiration of the term of the Trust where all of the
Debentures have been paid in full. Upon any such Liquidation of the Trust
involving a distribution of the Debentures, if at the time of such Liquidation,
the Capital Securities were rated by at least one nationally-recognized rating


                                      I-4





<PAGE>
<PAGE>

organization, the Debenture Issuer will use its reasonable best efforts to
obtain from at least one nationally recognized statistical rating organization a
rating for the Debentures.

               The Sponsor, as the Holder of all of the outstanding Common
Securities, has the right at any time to dissolve the Trust (including without
limitation upon the occurrence of a Tax Event or an Investment Company Event)
and, after the payment or the making of reasonable provision to pay all claims
and obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, cause the Debentures to be distributed to the Holders of the
Securities on a Pro Rata basis.

               The Trust shall dissolve (i) unless earlier terminated, on
January 21, 2052, the expiration of the term of the Trust, (ii) upon a
Bankruptcy Event with respect to the Sponsor, Trust or the Debenture Issuer,
(iii) (other than in connection with a merger, consolidation or similar
transaction not prohibited by the Indenture, this Declaration or the Securities
Guarantees, as the case may be) upon the filing of a certificate of dissolution
or its equivalent with respect to the Sponsor; upon the consent of the Holders
of a Majority in liquidation amount of the Securities voting together as a
single class to file a certificate of cancellation with respect to the Trust, or
upon the revocation of the charter of the Sponsor and the expiration of 90 days
after the date of revocation without a reinstatement thereof, (iv) upon the
distribution to the Holders of the Securities of the Debentures, upon exercise
of the right of the Holder of all of the outstanding Common Securities of the
Trust to dissolve the Trust as described above, (v) upon the entry of a decree
of a judicial dissolution of the Sponsor, the Trust or the Debenture Issuer,
(vi) when all of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders in
accordance with the terms of the Securities, or (vii) before the issuance of any
Securities, with the consent of all of the Institutional Trustee, the
Administrators and the Sponsor. As soon as practicable after the dissolution of
the Trust and upon completion of the winding up of the Trust, the Trust shall
terminate upon the filing of a certificate of cancellation with the Secretary of
State of the State of Delaware.

               If a Liquidation of the Trust occurs as described in clause (i),
(ii), (iii) or (v) in the immediately preceding paragraph, the Trust shall be
liquidated by the Trustees as expeditiously as such Trustees determine to be
possible by distributing, after the payment or the making of reasonable
provision to pay all claims and obligations of the Trust in accordance with
Section 3808(e) of the Business Trust Act, to the Holders of the Securities, the
Debentures on a Pro Rata basis, unless such distribution is determined by the
Institutional Trustee not to be practical, in which event such Holders will be
entitled to receive out of the assets of the Trust available for distribution to
the Holders, after satisfaction of liabilities of creditors of the Trust, an
amount equal to the Liquidation Distribution except in the case of clause (i)
where the Debentures have been paid in full. An early Liquidation of the Trust
pursuant to clause (iv) above shall occur if the Institutional Trustee
determines that such Liquidation is possible by distributing, after the payment
or the making of reasonable provision to pay all claims and obligations of the
Trust in accordance with Section 3808(e) of the Business Trust Act, to the
Holders of the Securities on a Pro Rata basis, the Debentures, and such
distribution occurs.


                                      I-5





<PAGE>
<PAGE>

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

               After the date for any distribution of the Debentures upon
dissolution of the Trust, (i) the Securities of the Trust will be deemed to be
no longer outstanding, (ii) the Depositary or its nominee, as the record holder
of the Capital Securities, will receive a registered security in global form or
certificates representing the Debentures to be delivered upon such distribution,
and (iii) any certificates representing the Capital Securities not held by the
Depositary or its nominee will be deemed to represent undivided beneficial
interests in such of the Debentures as have an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an interest rate identical
to the distribution rate of, and bearing accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissuance.

               4. Redemption and Distribution. (a) If the Debenture Issuer
redeems the Debentures, the Trust shall redeem, on a Pro Rata basis, Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
Debentures so redeemed at a redemption price (the "Redemption Price") equal to
(i) $1,000 per Security, in the case of a redemption upon the occurrence of a
Tax Event, (ii) in an amount per Security equal to the Make-Whole Amount for a
corresponding $1,000 principal amount of Debentures, in the case of a redemption
upon the occurrence of an Investment Company Event prior to February 1, 2007, or
(iii) an amount per Security equal to the product of $1,000 and the applicable
percentage used to determine the Call Price for the Debentures being redeemed,
in the case of an Optional Redemption of Debentures or a redemption upon the
occurrence of an Investment Company Event on or after February 1, 2007, in each
case together with accrued and unpaid Distributions thereon to the date of the
redemption, as described below, including Special Payments.

               The Debentures may be redeemed by the Debenture Issuer, in whole
or in part, at any time and from time to time on or after February 1, 2007, at
the call prices specified below:












                                      I-6





<PAGE>
<PAGE>

              If redeemed during the
                 12-month period
              beginning, February 1,                              Call Price

       2007                                                        104.180%
       2008                                                        103.762%
       2009                                                        103.344%
       2010                                                        102.926%
       2011                                                        102.508%
       2012                                                        102.090%
       2013                                                        101.672%
       2014                                                        101.254%
       2015                                                        100.836%
       2016                                                        100.418%

and thereafter at 100% of the principal amount of the Debentures (in each case,
a "Call Price"), together, in each case, with accrued and unpaid Distributions
thereon to the date fixed for redemption provided, however, that Holders of the
Securities shall be given not less than 30 nor more than 60 days' notice of such
redemption (other than at the stated maturity of the Debentures).

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

               (c) Tax Event Redemption and Investment Company Event Redemption.


                      (i) If, at any time, a Tax Event (as defined below) should
        occur and be continuing, the Debenture Issuer shall have the right to
        advance the stated maturity of the Debentures to the minimum extent
        required, but no earlier than August 1, 2016, such that in the opinion
        of a nationally recognized independent tax counsel to the Debenture
        Issuer experienced in such matters, after advancing the maturity date,
        interest payable by the Debenture Issuer on the Debentures will be
        deductible for United States federal income tax purposes (the action
        referred to above being referred to herein as a "Tax Event Maturity
        Advancement"). If, at any time a Tax Event should occur and be
        continuing, and the Debenture Issuer receives an opinion (a "Redemption
        Tax Opinion") of a nationally recognized independent tax counsel to the
        Debenture Issuer experienced in such matters that, as a result of such
        Tax Event, there is more than an insubstantial risk that the Debenture
        Issuer would be precluded from deducting the interest on the Debentures
        for United States federal income tax purposes, even if a Tax Event
        Maturity Advancement were effected, the Debenture Issuer shall have the
        right at any time, within 90 days following the occurrence of such Tax
        Event, upon not less than 30 days' nor more than 60 days' notice to
        redeem the Debentures, in whole or in part, for cash so long as such Tax
        Event is continuing, at par plus any accrued and unpaid interest thereon
        to 


                                      I-7





<PAGE>
<PAGE>

the date of redemption, provided that (i) if at the time there is available to
the Debenture Issuer or the Trust the opportunity to eliminate, within such 90
day period and before any such notice is given, the adverse effects of such Tax
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure which has no adverse
effect on the Debenture Issuer, the Trust or the holders of the Securities and
(ii) such notice has not been given, the Debenture Issuer or the Trust shall
pursue such ministerial action in lieu of redemption. If Debentures are only
partly redeemed pursuant to this Section 4(c), Debentures shall be redeemed pro
rata or by lot or by any other method utilized by the Institutional Trustee.

               "Tax Event" means the receipt by the Administrators of an opinion
        of a nationally recognized independent tax counsel to the Debenture
        Issuer experienced in such matters (a "Dissolution Tax Opinion") to the
        effect that, as a result of (i) any amendment to, clarification of or
        change (including any announced prospective change) in, the laws (or any
        regulations thereunder) of the United States or any political
        subdivision or taxing authority thereof or therein, (ii) any judicial
        decision or official administrative pronouncement, ruling, regulatory
        procedure, notice or announcement, including any notice or announcement
        of intent to adopt such procedures or regulations (an "Administrative
        Action") or (iii) any amendment to, clarification of or change in the
        administrative position or interpretation of any Administrative Action
        or judicial decision that differs from the theretofore generally
        accepted position, in each case, by any legislative body, court,
        governmental agency or regulatory body, irrespective of the manner in
        which such amendment, clarification or change is made known, which
        amendment, clarification or change is effective, announced, enacted or
        promulgated or such Administrative Action or decision is announced, in
        each case on or after January 24, 1997, there is more than an
        insubstantial risk that (a) the Trust is, or will be within 90 days of
        the date thereof, subject to United States federal income tax with
        respect to interest accrued or received on the Debentures or subject to
        more than a de minimis amount of other taxes, duties or other
        governmental charges, (b) any portion of interest payable by the
        Debenture Issuer to the Trust on the Debentures is not, or within 90
        days of the date thereof will not be, deductible by the Debenture Issuer
        for United States federal income tax purposes, or (c) the Debenture
        Issuer could become liable to pay, on the he Debentures, any Additional
        Interest (as defined in the Indenture).

                      (ii) Upon the occurrence of an Investment Company Event
        (as defined below), the Debenture Issuer shall have the right within 90
        days following the occurrence of such Investment Company Event, upon not
        less than 30 days' nor more than 60 days' notice to redeem the
        Debentures, in whole or in part, for cash at (i) the Make-Whole Amount,
        in the case of a redemption upon the occurrence of an Investment Company
        Event prior to February 1, 2007 or (ii) the Call Price, in the case of a
        redemption upon the occurrence of an Investment Company Event on or
        after February 1, 2007, in each case together with accrued and unpaid
        interest thereon to the date of redemption. If Debentures are only
        partly redeemed pursuant to this Section 4(c), Debentures shall be
        redeemed pro rata or by lot or by any other method utilized by the
        Institutional Trustee.


                                      I-8





<PAGE>
<PAGE>

                      "Investment Company Event" means the receipt by the
        Administrators of an opinion of counsel rendered by a law firm having a
        recognized national securities practice, to the effect that, as a result
        of the occurrence of a change in law or regulation or a change in
        interpretation or application of law or regulation by any legislative
        body, court, governmental agency or regulatory authority ("Change in
        1940 Act Law"), there is more than an insubstantial risk that the Trust
        is or will be considered an "investment company" which is required to be
        registered under the Investment Company Act of 1940, as amended, which
        Change in 1940 Act Law becomes effective or is announced, enacted or
        promulgated on or after January 24, 1997.

                  The "Make-Whole Amount" will be equal to the greater of (i)
        100% of the principal amount of the Debentures to be redeemed or (ii) as
        determined by the Quotation Agent (as defined herein, (a) the sum of the
        present values of the principal amount and premium payable as part of
        the Call Price of such Debentures on February 1, 2007, together with the
        present values of scheduled payments of interest from the redemption
        date to February 1, 2007 (the "Remaining Life"), in each case discounted
        to the redemption date on a semiannual basis (assuming a 360-day year
        consisting of 30 day months) at the Adjusted Treasury Rate (as defined
        herein) less (b) accrued and unpaid interest on such Debentures to the
        date of redemption.


                  "Adjusted Treasury Rate" means, with respect to any redemption
        date, the Treasury Rate plus 150 basis points if such redemption date
        occurs before February 1, 1998 or (ii) 100 basis points if such
        redemption date occurs on or after February 1, 1998.

                  "Treasury Rate" means (i) the yield, under the heading which
        represents the average for the week immediately prior to the calculation
        date, 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 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 redemption date. The Treasury Rate shall be calculated on
        the third Business Day preceding the redemption date.

                  "Comparable Treasury Issue" means with respect to any
        redemption date the United States Treasury security selected by the
        Quotation Agent as having a maturity comparable to the Remaining Life
        that would be utilized, at the time of selection and in accordance with
        customary financial practice, in pricing new issues of corporate debt


                                      I-9





<PAGE>
<PAGE>

        securities of comparable maturity to the Remaining Life. 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 Treasury Rate shall be
        interpolated or extrapolated on a straight-line basis, rounding to the
        nearest month using such securities.

                  "Quotation Agent" means Salomon Brothers Inc and its
        successors; provided, however, that if the foregoing shall cease to be a
        primary U.S. Government securities dealer in New York City (a "Primary
        Treasury Dealer"), the Debenture Issuer shall substitute therefor
        another Primary Treasury Dealer.

                  "Reference Treasury Dealer" means (i) the Quotation Agent and
        (ii) any other Primary Treasury Dealer selected by the Debt Trustee
        after consultation with the Debenture Issuer.

                  "Comparable Treasury Price" means (A) the average of five
        Reference Treasury Dealer Quotations for such Redemption Date, after
        excluding the highest and lowest such Reference Treasury Dealer
        Quotations, or (B) if the Debt Trustee obtains fewer than five such
        Reference Treasury Dealer Quotations, the average of all such
        Quotations.

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

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

               (e) Redemption or Distribution Procedures.

                      (i) Notice of any redemption of, or notice of distribution
        of Debentures in exchange for, the Securities (a
        "Redemption/Distribution Notice") will be given by the Trust by mail to
        each Holder of Securities to be redeemed or exchanged not fewer than 30
        nor more than 60 days before the date fixed for redemption or exchange
        thereof which, in the case of a redemption, will be the date fixed for
        redemption of the Debentures. For purposes of the calculation of the
        date of redemption or exchange and the dates on which notices are given
        pursuant to this Section 4(e)(i), a Redemption/Distribution Notice shall
        be deemed to be given on the day such notice is first mailed by
        first-class mail, postage prepaid, to Holders of such Securities. Each
        Redemption/Distribution Notice shall be 


                                      I-10





<PAGE>
<PAGE>

        addressed to the Holders of such Securities at the address of each such
        Holder appearing on the books and records of the Trust. No defect in the
        Redemption/Distribution Notice or in the mailing thereof with respect to
        any Holder shall affect the validity of the redemption or exchange
        proceedings with respect to any other Holder.

                      (ii) In the event that fewer than all the outstanding
        Securities are to be redeemed, the Securities to be redeemed shall be
        redeemed Pro Rata from each Holder of Capital Securities; provided,
        however, that, in respect of Capital Securities registered in the name
        of and held of record by the Depositary or its nominee (or any successor
        Clearing Agency or its nominee), the Capital Securities shall be
        redeemed in accordance with the procedures of the Depositary (which may
        include redemption by lot), and the distribution of the proceeds of such
        redemption will be made to each Clearing Agency Participant (or Person
        on whose behalf such nominee holds such Securities) in accordance with
        the procedures applied by such Clearing Agency or nominee.

                      (iii) If Securities are to be redeemed and the Trust gives
        a Redemption/ Distribution Notice, which notice may only be issued if
        the Debentures are redeemed as set out in this Section 4 (which notice
        will be irrevocable), then (A) with respect to the Capital Securities,
        while the Capital Securities are in book-entry only form, provided that
        the Debenture Issuer has paid the Institutional Trustee a sufficient
        amount of cash in connection with the related redemption or maturity of
        the Debentures, the Institutional Trustee will deposit irrevocably with
        the Depositary or its nominee (or successor Clearing Agency or its
        nominee), by 12:00 noon, New York City time, on the redemption date,
        funds sufficient to pay the applicable Redemption Price with respect to
        the Capital Securities and will give such Depositary irrevocable
        instructions and authority to pay the Redemption Price to the Holders of
        the Capital Securities, and (B) with respect to Capital Securities
        issued in definitive form and Common Securities, provided that the
        Debenture Issuer has paid the Institutional Trustee a sufficient amount
        of cash in connection with the related redemption or maturity of the
        Debentures, the Institutional Trustee will pay the relevant Redemption
        Price to the Holders of such Securities by check mailed to the address
        of each such Holder appearing on the books and records of the Trust on
        the redemption date. If a Redemption/Distribution Notice shall have been
        given and funds deposited as required then immediately prior to the
        close of business on the date of such deposit Distributions will cease
        to accrue on the Securities so called for redemption and all rights of
        Holders of such Securities so called for redemption will cease, except
        the right of the Holders of such Securities to receive the applicable
        Redemption Price specified in Section 4(a), but without interest on such
        Redemption Price. If any date fixed for redemption of Securities is not
        a Business Day, then payment of any such redemption price payable on
        such date will be made on the next succeeding day that is a Business Day
        (and without any interest or other payment in respect of any such delay)
        except that, if such Business Day falls in the next calendar year, such
        payment will be made on the immediately preceding Business Day, in each
        case with the same force and effect as if made on such date fixed for
        redemption. If payment of the Redemption Price in respect of any
        Securities is improperly withheld or refused and not paid either by the
        Trust or by the Sponsor as guarantor pursuant to the relevant Securities
        Guarantee, 


                                      I-11





<PAGE>
<PAGE>

        Distributions on such Securities will continue to accrue at the then
        applicable rate from the original redemption date to the actual date of
        payment, in which case the actual payment date will be considered the
        date fixed for redemption for purposes of calculating the Redemption
        Price. In the event of any redemption of Capital Securities issued by
        the Trust in part, the Trust shall not be required to (i) issue,
        register the transfer of or exchange any Security during a period
        beginning at the opening of business 15 days before any selection for
        redemption of Capital Securities and ending at the close of business on
        the earliest date on which the relevant notice of redemption is deemed
        to have been given to all Holders of Capital Securities to be so
        redeemed or (ii) register the transfer of or exchange any Capital
        Securities so selected for redemption, in whole or in part, except for
        the unredeemed portion of any Capital Securities being redeemed in part.

                      (iv) Redemption/Distribution Notices shall be sent by the
        Administrators on behalf of the Trust to (A) in respect of the Capital
        Securities, the Depositary or its nominee (or any successor Clearing
        Agency or its nominee) if the Global Capital Securities have been issued
        or, if Definitive Capital Securities have been issued, to the Holders
        thereof, and (B) in respect of the Common Securities, to the Holder
        thereof.

                      (v) Subject to the foregoing and applicable law
        (including, without limitation, United States federal securities laws),
        provided the acquiror is not the Holder of the Common Securities or the
        obligor under the Indenture, the Sponsor or any of its subsidiaries may
        at any time and from time to time purchase outstanding Capital
        Securities by tender, in the open market or by private agreement.

               5. Voting Rights - Capital Securities. (a) Except as provided
under Sections 5(b) and 7 and as otherwise required by law and the Declaration,
the Holders of the Capital Securities will have no voting rights. The
Administrators are required to call a meeting of the Holders of the Capital
Securities if directed to do so by Holders of at least 10% in liquidation amount
of the Capital Securities.

               (b) Subject to the limitations on the ability to pursue remedies
set forth in the Indenture and to the requirements of obtaining a tax opinion by
the Institutional Trustee in certain circumstances set forth in the last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Capital Securities, voting separately as a class, may direct, subject to the
last paragraph of Section 2.6(a) of the Declaration, the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) exercise the remedies available
under the Indenture as the holder of the Debentures, (ii) waive any past default
that is waivable under the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and
payable or (iv) consent on behalf of all the holders of the Capital Securities
to any amendment, modification or termination of the Indenture or the Debentures
where such consent shall be required, provided, however, that, where a consent
or action under the Indenture would require the consent or act of the holders of
greater than a majority in principal amount of Debentures (a "Super Majority")
affected thereby, the Institutional Trustee 


                                      I-12





<PAGE>
<PAGE>

may only give such consent or take such action at the written direction of the
Holders of at least the proportion in aggregate liquidation amount of the
Capital Securities outstanding which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. If the
Institutional Trustee fails to enforce its rights under the Debentures after the
Holders of a Majority in liquidation amount of such Capital Securities (or Super
Majority, as the case may be) have so directed the Institutional Trustee, to the
fullest extent permitted by law, a Holder of the Capital Securities may
institute a legal proceeding directly against the Debenture Issuer to enforce
the Institutional Trustee's rights under the Debentures without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity (subject to limitations on the ability to pursue remedies set
forth in the Indenture). Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing and such event is attributable to the failure of
the Debenture Issuer to pay interest or principal (or premium, if any) on the
Debentures on the date the interest or principal (or premium, if any) is
payable, as deferred pursuant to a valid Extension Period, if applicable (or in
the case of redemption, the redemption date), then a Holder of record of Capital
Securities may directly institute a proceeding for enforcement of payment, on or
after the respective due dates specified in the Debentures, to such Holder
directly of the principal of (or premium, if any) or interest on the Debentures
having an aggregate principal amount equal to the aggregate liquidation amount
of the Capital Securities of such Holder. The Institutional Trustee shall notify
all Holders of the Capital Securities of any default actually known to the
Institutional Trustee with respect to the Debentures unless (x) such defaults
have been cured prior to the giving of such notice or (y) the Institutional
Trustee determines in good faith that the withholding of such notice is in the
interest of the Holders of the Capital Securities, except where the default
relates to the payment of principal of (or premium, if any) or interest on any
of the Debentures. Such notice shall state that such Indenture Event of Default
also constitutes an Event of Default hereunder. Except with respect to directing
the time, method and place of conducting a proceeding for a remedy, the
Institutional Trustee shall not take any of the actions described in clauses
(i), (ii) or (iii) above unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that, as a result of such action, the Trust
will not be classified as other than a grantor trust for United States federal
income tax purposes.

               If any series of Debt Securities is held by a PXRE Trust or a
trustee of such trust, any supplemental indenture shall not be effective until
the Holders of a Majority in liquidation amount of Securities of the applicable
PXRE Trust shall have consented to such supplemental indenture and provided that
if the consent of a Security Holder of each outstanding Debt Security is
required, such supplemental indenture shall not be effective until each holder
of the Securities of the applicable PXRE Trust shall have consented (voting
together as a single class) to such supplemental indenture.

               In the event the consent of the Institutional Trustee is required
under the Indenture with respect to any amendment, modification or termination
of the Indenture, the Institutional Trustee shall request the direction of the
Holders of the Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided, however, that where a consent under
the Indenture


                                      I-13





<PAGE>
<PAGE>

would require the consent of a Super Majority, the Institutional Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of such Trust Securities outstanding which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. The Institutional Trustee shall not take any such action
in accordance with the directions of the Holders of the Securities unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes.

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

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

               Holders of Capital Securities will have no rights to appoint or
remove the Administrators, who may be appointed, removed or replaced solely by
the Holder of all of the Common Securities of the Trust. Under certain
circumstances as more fully described in the Declaration, Holders of Capital
Securities have the right to vote to appoint, remove or replace the
Institutional Trustee.

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

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

               (c) Subject to Section 2.6 of the Declaration and only after each
Event of Default (if any) with respect to the Capital Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a

                                      I-14






<PAGE>
<PAGE>

Majority in liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method, and place of conducting any proceeding for
any remedy available to the Institutional Trustee, or exercising any trust or
power conferred upon the Institutional Trustee under the Declaration, including
(i) directing the time, method, place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under the Indenture, or
(iii) exercise any right to rescind or annul a declaration that the principal of
all the Debentures shall be due and payable, provided, however, that, where a
consent or action under the Indenture would require a Super Majority, the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Notwithstanding
this Section 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote or consent of the Holders of the
Capital Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action described in (i), (ii) or (iii) above, unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Common Securities may institute a legal proceeding directly against
any Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.

               If any series of Debt Securities is held by a PXRE Trust or a
trustee of such trust, any supplemental indenture shall not be effective until
the Holders of a Majority in liquidation amount of Securities of the applicable
PXRE Trust shall have consented to such supplemental indenture and provided that
if the consent of a Security Holder of each outstanding Debt Security is
required, such supplemental indenture shall not be effective until each holder
of the Securities of the applicable PXRE Trust shall have consented (voting
together as a single class) to such supplemental indenture.

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


                                      I-15





<PAGE>
<PAGE>

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

               7. Amendments to Declaration and Indenture. (a) In addition to
any requirements under Section 12.1 of the Declaration, if any proposed
amendment to the Declaration provides for, or the Trustees otherwise propose to
effect, (i) any action that would adversely affect the powers, preferences or
special rights of the Securities, whether by way of amendment to the Declaration
or otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than as described in Section 8.1 of the Declaration, then the Holders of
outstanding Securities, voting together as a single class, will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, affected thereby; provided, however, if
any amendment or proposal referred to in clause (i) above would adversely affect
only the Capital Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.

               (b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification, or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
a Super Majority, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.

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

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


                                      I-16





<PAGE>
<PAGE>

               8. Pro Rata. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Capital Securities
pro rata according to the aggregate liquidation amount of Capital Securities
held by the relevant Holder relative to the aggregate liquidation amount of all
Capital Securities outstanding, and only after satisfaction of all amounts owed
to the Holders of the Capital Securities, to each Holder of Common Securities
pro rata according to the aggregate liquidation amount of Common Securities held
by the relevant Holder relative to the aggregate liquidation amount of all
Common Securities outstanding. In any such proration, the Trust may make such
adjustments as may be appropriate in order that only Securities in denominations
of $1,000 or integral multiples thereof shall be redeemed.

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

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

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

               12. Miscellaneous. These terms constitute a part of the
Declaration. The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.


                                      I-17





<PAGE>
<PAGE>

                                   EXHIBIT A-1

                  FORM OF INITIAL CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

               [Include the following Restricted Securities Legend on all
Capital Securities, including Rule 144A Global Capital Securities and Restricted
Definitive Capital Securities, unless otherwise determined by the Sponsor in
accordance with applicable law ----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 OR 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 PXRE
CORPORATION (THE "COMPANY") OR PXRE CAPITAL TRUST I (THE "TRUST") OR ANY
AFFILIATE OF THE COMPANY OR THE TRUST WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTIONS TERMINATION DATE") ONLY
(A) TO THE COMPANY OR THE TRUST, (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 THAT IS 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 COMPANY'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUST. THE HOLDER OF THIS SECURITY AGREES THAT
IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS. SECURITIES OWNED BY A PURCHASER
THAT IS 


                                     A-1-1




<PAGE>
<PAGE>

NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTIONS TERMINATION DATE.]

               [Include if Capital Security is in the form of a Restricted
Definitive Capital Security -- IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATE AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE DECLARATION TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]

               [Include if Capital Security is in global form and The Depository
Trust Company is the Clearing Agency -- UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

               [Include if Capital Security is in global form -- TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]


                                     A-1-2





<PAGE>
<PAGE>

           Certificate Number            Number of Capital Securities

                              CUSIP NO ___________

                    Certificate Evidencing Capital Securities

                                       of

                              PXRE CAPITAL TRUST I

              8.85% Capital Pass-through Securities'sm' (TRUPS'sm')

                (liquidation amount $1,000 per Capital Security)

               PXRE CAPITAL TRUST I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
designated the 8.85% Capital Trust Pass-through Securities'sm' (liquidation
amount $1,000 per Capital Security) (the "Capital Securities"). Subject to the
Declaration (as defined below), the Capital Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are issued pursuant to,
and shall in all respects be subject to, the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of January 29, 1997, among
Gerald L. Radke, Sanford M. Kimmel and Joan L. Cadd as Administrators, First
Union Bank of Delaware, as Delaware Trustee, First Union National Bank, as
Institutional Trustee, PXRE Corporation and the holders from time to time of
undivided beneficial interests in the assets of the Trust, as Sponsor, including
the designation of the terms of the Capital Securities as set forth in Annex I
to the Declaration, as the same may be amended from time to time (the
"Declaration"). Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Capital Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Capital Securities Guarantee and the
Indenture to the Holder without charge upon written request to the Trust at its
principal place of business.

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

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

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


                                     A-1-3





<PAGE>
<PAGE>

               IN WITNESS WHEREOF, the Trust has executed this certificate this
29th day of January, 1997.

                                         PXRE CAPITAL TRUST I


                                         By:________________________________
                                            Name:
                                            Title: Administrator

                                         By:________________________________
                                            Name:
                                            Title: Administrator









                                     A-1-4





<PAGE>
<PAGE>


                          CERTIFICATE OF AUTHENTICATION

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

               Dated:_________________

                                            FIRST UNION NATIONAL BANK, as the
                                              Institutional Trustee


                                            By:_____________________________
                                               Name:
                                               Title:











                                      A-1-5






<PAGE>
<PAGE>


                          [FORM OF REVERSE OF SECURITY]

               Distributions payable on each Capital Security will be fixed at a
rate per annum of 8.85% (the "Coupon Rate") of the stated liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Except as set forth below in
respect of an Extension Period, Distributions in arrears for more than a
semiannual period will bear interest thereon compounded semiannually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes cash distributions and any such
compounded interest and any Special Payments (but excluding Additional Interest)
(each as defined in the Indenture) payable on the Debentures unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semiannual
Distribution period on the basis of a 360-day year of twelve 30-day months and
the actual number of days elapsed per 30-day month.

               Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears on February 1 and August 1 of each
year, commencing on August 1, 1997. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
(each an "Extension Period") at any time and from time to time on the
Debentures, subject to certain conditions, although such interest would continue
to accrue on the Debentures at a rate of 8.85% per annum, compounded
semiannually to the extent permitted by law during any Extension Period. If such
right is exercised, semiannual Distributions on the Capital Securities will also
be deferred (though such Distributions would continue to accrue at the
distribution rate of 8.85% per annum, compounded semiannually to the extent
permitted by law) during any Extension Period. Such right to extend any
extension period is limited to Extension Periods, each not exceeding 10
consecutive semiannual periods, provided, however, that no Extension Period
shall be initiated while accrued interest from a prior, completed Extension
Period is unpaid or while the Debenture Issuer is in default in the payment of
interest that has become due and payable on the Debentures; and, provided,
further, that no Extension Period shall extend beyond the date of maturity of
the Debentures. Prior to the termination of any such Extension Period in respect
of the Debentures, the Debenture Issuer may further extend the interest payment
period; provided that each such Extension Period in respect of the Debentures,
together with all such previous and further extensions thereof, may not exceed
10 consecutive . If Distributions are deferred, the Distributions due shall be
paid on the date that the related Extension Period terminates, or, if such date
is not a Distribution Payment Date, on the immediately following Distribution
Payment Date, to Holders of the Capital Securities as they appear on the books
and records of the Trust on the record date immediately preceding such date.
Distributions on the Capital Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such Distributions in the


                                     A-1-6





<PAGE>
<PAGE>


Property Account of the Trust. The Trust's funds available for distribution to
the Holders of the Securities will be limited to payments received from the
Debenture Issuer. The payment of Distributions out of moneys held by the Trust
is guaranteed by the Sponsor pursuant to the Capital Securities Guarantee. This
Security may be transferred only in blocks having a stated liquidation amount of
not less than $100,000 (i.e., 100 Securities). Any transfer or purported
transfer of any Security not made in accordance with this Declaration shall be
null and void and will be deemed to be of no legal effect whatsoever and any
such transferee shall be deemed not to be the holder of such Security for any
purpose, including but not limited to the receipt of Distributions on such
Security, and such transferee shall be deemed to have no interest whatsoever in
such Capital Security.

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




















                                     A-1-7





<PAGE>
<PAGE>



                                   ASSIGNMENT

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

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

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

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

               (Insert assignee's social security or tax identification number)

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

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

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

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

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

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

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

agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

               Date:_______________________________________________

               Signature:__________________________________________

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

               Signature Guarantee:*_______________________________________


_________________

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


                                     A-1-8





<PAGE>
<PAGE>

                                   EXHIBIT A-2

                  FORM OF EXCHANGE CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

               [Include if Capital Security is in global form and The Depository
Trust Company is the Clearing Agency -- UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

               [Include if Capital Security is in global form -- TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]

           Certificate Number             Number of Capital Securities

                              CUSIP NO ___________

                    Certificate Evidencing Capital Securities

                                       of

                              PXRE CAPITAL TRUST I

              8.85% Capital Pass-through Securities'sm' (TRUPS'sm')

                (liquidation amount $1,000 per Capital Security)

               PXRE CAPITAL TRUST I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
designated the 8.85% Capital Trust Pass-through Securities'sm' (liquidation
amount $1,000 per Capital Security) (the "Capital Securities"). Subject to the
Declaration (as defined below), the Capital Securities are transferable on the
books and records of the Trust, in person or 


                                     A-2-1





<PAGE>
<PAGE>

by a duly authorized attorney, upon surrender of this Certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are issued pursuant to, and shall in all respects
be subject to, the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of January 29, 1997, among Gerald L. Radke, Sanford M.
Kimmel and Joan L. Cadd as Administrators, First Union Bank of Delaware, as
Delaware Trustee, First Union National Bank, as Institutional Trustee, PXRE
Corporation and the holders from time to time of undivided beneficial interests
in the assets of the Trust, as Sponsor, including the designation of the terms
of the Capital Securities as set forth in Annex I to the Declaration, as the
same may be amended from time to time (the "Declaration"). Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Capital Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Capital Securities Guarantee and the Indenture to the Holder
without charge upon written request to the Trust at its principal place of
business.

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

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

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

               IN WITNESS WHEREOF, the Trust has executed this certificate this
29th day of January, 1997.

                                      PXRE CAPITAL TRUST I


                                      By:________________________________
                                         Name:
                                         Title: Administrator


                                      By:________________________________
                                         Name:
                                         Title: Administrator






                                     A-2-2





<PAGE>
<PAGE>


                          CERTIFICATE OF AUTHENTICATION

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

               Dated:_________________

                                            FIRST UNION NATIONAL BANK, as the

                                            Institutional Trustee

                                            By:______________________________
                                               Name:
                                               Title:










                                     A-2-3





<PAGE>
<PAGE>


                          [FORM OF REVERSE OF SECURITY]

               Distributions payable on each Capital Security will be fixed at a
rate per annum of 8.85% (the "Coupon Rate") of the stated liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Except as set forth below in
respect of an Extension Period, Distributions in arrears for more than a
semiannual period will bear interest thereon compounded semiannually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes cash distributions and any such
compounded interest (but excluding any Additional Interest, as defined in the
Indenture), payable on the Debentures unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Trust has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full semiannual Distribution period on the basis of a 360-day
year of twelve 30-day months and the actual number of days elapsed per 30-day
month.

               Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears on February 1 and August 1 of each
year, commencing on August 1, 1997. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
(each an "Extension Period") at any time and from time to time on the
Debentures, subject to certain conditions, although such interest would continue
to accrue on the Debentures at a rate of 8.85% per annum, compounded
semiannually to the extent permitted by law during any Extension Period. If such
right is exercised, semiannual Distributions on the Capital Securities will also
be deferred (though such Distributions would continue to accrue at the
distribution rate of 8.85% per annum, compounded semiannually to the extent
permitted by law) during any Extension Period. Such right to extend any
extension period is limited to Extension Periods, each not exceeding 10
consecutive semiannual periods, provided, however, that no Extension Period
shall be initiated while accrued interest from a prior, completed Extension
Period is unpaid or while the Debenture Issuer is in default in the payment of
interest that has become due and payable on the Debentures; and, provided,
further, that no Extension Period shall extend beyond the date of maturity of
the Debentures. Prior to the termination of any such Extension Period in respect
of the Debentures, the Debenture Issuer may further extend the interest payment
period; provided that each such Extension Period in respect of the Debentures,
together with all such previous and further extensions thereof, may not exceed
10 consecutive . If Distributions are deferred, the Distributions due shall be
paid on the date that the related Extension Period terminates, or, if such date
is not a Distribution Payment Date, on the immediately following Distribution
Payment Date, to Holders of the Capital Securities as they appear on the books
and records of the Trust on the record date immediately preceding such date.
Distributions on the Capital Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such Distributions in the




                                     A-2-4





<PAGE>
<PAGE>


Property Account of the Trust. The Trust's funds available for distribution to
the Holders of the Securities will be limited to payments received from the
Debenture Issuer. The payment of Distributions out of moneys held by the Trust
is guaranteed by the Sponsor pursuant to the Capital Securities Guarantee. The
Capital Securities will be issued only in blocks having a stated liquidation
amount of not less than $1,000.

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















                                     A-2-5





<PAGE>
<PAGE>

                                   ASSIGNMENT

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

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

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

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

               (Insert assignee's social security or tax identification number)

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

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

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

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

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

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

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

agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

               Date:_________________________________________________

               Signature:____________________________________________

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

               Signature Guarantee:*______________________________________



___________________

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


                                     A-2-6





<PAGE>
<PAGE>

                                   EXHIBIT A-3

                       FORM OF COMMON SECURITY CERTIFICATE

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

               [THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED.]

               Certificate Number            Number of Common Securities

                    Certificate Evidencing Common Securities

                                       of

                              PXRE CAPITAL TRUST I

               PXRE CAPITAL TRUST I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that PXRE
Corporation (the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
(the "Common Securities"). The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued pursuant to, and shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of January 29, 1997, among Gerald L. Radke, Sanford M. Kimmel and Joan L.
Cadd, as Administrators, First Union Bank of Delaware, as Delaware Trustee,
First Union National Bank, as Institutional Trustee, PXRE Corporation as Sponsor
and the holders from time to time of undivided beneficial interest in the assets
of the Trust including the designation of the terms of the Common Securities as
set forth in Annex I to the Declaration, as the same may be amended from time to
time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to the Holder without charge upon written request to the
Sponsor at its principal place of business.

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

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


                                     A-3-1





<PAGE>
<PAGE>

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

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

               IN WITNESS WHEREOF, the Trust has executed this certificate this
29th day of January, 1997.

                                            PXRE CAPITAL TRUST I

                                            By:___________________________
                                               Name:
                                               Title: Administrator

                                            By:___________________________
                                               Name:
                                               Title: Administrator


                                     A-3-2





<PAGE>
<PAGE>


                          [FORM OF REVERSE OF SECURITY]

               Distributions payable on each Common Security will be identical
in amount to the Distributions payable on each Capital Security, which is at a
rate per annum of 8.85% (the "Coupon Rate") of the stated liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Except as set forth below in
respect of an Extension Period, Distributions in arrears for more than one
semiannual period will bear interest thereon compounded semiannually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes cash distributions and any such
compounded interest and any Special Payments (but excluding Additional Interest)
(each as defined in the Indenture) payable on the Debentures unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Trust has funds available therefor. The amount of Distributions payable for
any period will be computed for any full semiannual Distribution period on the
basis of a 360-day year of twelve 30-day months and the actual number of days
elapsed per 30-day month.

               Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semiannually in arrears on February 1 and August 1 of each
year, commencing on August 1, 1997. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
(each an "Extension Period") at any time and from time to time on the
Debentures, subject to certain conditions, although such interest would continue
to accrue on the Debentures at a rate of 8.85% per annum, compounded
semiannually to the extent permitted by law during any Extension Period. If such
right is exercised, semiannual distributions on the Common Securities will also
be deferred (though such Distributions would continue to accrue at the
Distribution rate of 8.85% per annum, compounded semiannually to the extent
permitted by law) during any Extension Period. Such right to extend any
extension period is limited to Extension Periods, each not exceeding 10
consecutive semiannual periods, provided, however, that no Extension Period
shall be initiated while accrued interest from a prior, completed Extension
Period is unpaid or while the Debenture Issuer is in default in the payment of
interest that has become due and payable on the Debentures; and, provided,
further, that no Extension Period shall extend beyond the date of maturity of
the Debentures. Prior to the termination of any such Extension Period in respect
of the Debentures, the Debenture Issuer may further extend the interest payment
period; provided that each such Extension Period in respect of the Debentures,
together with all such previous and further extensions thereof, may not exceed
10 consecutive semiannual periods or extend beyond the maturity of the
Debentures. Upon the termination of any Extension Period of the Debentures and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, or, if such date is not a Distribution Payment
Date, on the immediately following Distribution Payment Date, to Holders of the
Common Securities as they appear on the books and records of the Trust on the
record date immediately preceding such date. Distributions on the Common
Securities must be paid on the dates payable (after giving effect to any
Extension Period) to the extent that the Trust has funds available for the
payment of such 


                                     A-3-3





<PAGE>
<PAGE>

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

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


                                     A-3-4





<PAGE>
<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEREE CERTIFICATE

                             TO BE EXECUTED BY IAIs

                                                               __________, 199__

PXRE Corporation
PXRE Capital Trust I
c/o PXRE Corporation


Re: Purchase of $1,000 stated liquidation amount of 8.85% Capital Trust
    Pass-through Securities'sm' (TruPS)'sm' (the "Capital Securities") of PXRE
    Capital Trust I (the "Trust")
    ------------------------------------------------------------------------

Ladies and Gentlemen:

               In connection with our purchase of the Capital Securities we
confirm that:

               1. We understand that the 8.85% Capital Trust Pass-through
Securities'sm' (the "Capital Securities"), of PXRE Capital Trust I (the "Trust")
(including the guarantee (the "Guarantee") by PXRE Corporation ("PXRE") executed
in connection therewith) and the 8.85% Junior Subordinated Deferrable Interest
Debentures due 2027 (the "Subordinated Debt Securities") of PXRE (the Capital
Securities, the Guarantee and the Subordinated Debt Securities together being
referred to herein as "Offered Securities") have not been registered under the
Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws, and may not be offered or sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing the Offered Securities that, if, prior to
the date which is three years after the later of the date of original issue of
the Offered Securities and the last date on which PXRE, the Trust or any
affiliate of PXRE or the Trust was the owner of such Offered Securities (the
"Resale Restriction Termination Date"), we decide to offer, sell or otherwise
transfer any such Offered Securities, such offer, sale or transfer will be made
only (a) to PXRE or the Trust, (b) pursuant to an effective registration
statement under the Securities Act, (c) so long as the Offered Securities are
eligible for resale pursuant to Rule 144A under the Securities Act, to a person
we reasonably believe is a qualified institutional buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB and to
whom notice is given that the transfer is being made in reliance on Rule 144A,
(d) to an institutional "accredited investor" with the meaning of subparagraph
(a) (1), (2), (3) or (7) of Rule 501 under the Securities Act that is acquiring
Offered ecurities 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 thereof in
violation of the Securities Act, or (e) pursuant to another available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirements of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws.
The 


                                      B-1





<PAGE>
<PAGE>

foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Offered
Securities is proposed to be made pursuant to clause (d) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Trust and PXRE,
which shall provide as applicable, among other things, that the transferee is 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 such
Securities for investment urposes and not for distribution in violation of the
Securities Act. We acknowledge on our behalf and on behalf of any investor
account for which we are purchasing Offered Securities that the Trust and PXRE
reserve the right prior to any offer, sale or other transfer pursuant to clauses
(d) or (e) prior to the Resale Restriction Termination Date of the Offered
Securities to require the delivery of any opinion of counsel, certifications
and/or other information satisfactory to the Trust and PXRE. We understand that
the certificates for any Offered Security that we receive will bear a legend
substantially to the effect of the foregoing.

               2. We are an institutional "accredited investor" with the meaning
of subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act
purchasing for our own account or for the account of such an institutional
"accredited investor," and we are acquiring the Offered Securities for
investment purposes and not with view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Offered Securities, and
we and any account for which we are acting are each able to bear the economic
risks of our or its investment.

               3. We are acquiring the Offered Securities purchased by us for
our own account (or for one or more accounts as to each of which we exercise
sole investment discretion and have authority to make, and do make, the
statements contained in this letter) and not with a view to any distribution of
the Offered Securities, subject, nevertheless, to the understanding that the
disposition of our property will at all times be and remain within our control.

               4. We acknowledge that (a) none of PXRE, the Trust, or the
Initial Purchasers (as defined in the Offering Memorandum dated January 24, 1997
relating to the Offered Securities (the "Final Memorandum") nor any person
acting on behalf of PXRE, the Trust or the Initial Purchasers has made any
representation to us with respect to PXRE, the Trust or the offer or sale of any
Offered Securities and (b) any information we desire concerning PXRE, the Trust
and the Offered Securities or any other matter relevant to our decision to
purchase the Offered Securities (including a copy of the Final Memorandum) is or
has been made available to us.

               5. In the event that we purchase any Capital Securities (or
receive any Subordinated Debt Securities upon the liquidation of the Trust), we
will acquire and hold such Capital Securities having an aggregate stated
liquidation amount of not less than $100,000 or such Subordinated Debt
Securities having an aggregate principal amount not less than $100,000, for our
own account and for each separate account for which we are acting.


                                      B-2





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               6. We acknowledge that we (A) are not ourselves, and are not
acquiring Offered Securities with "plan assets" of an employee benefit or other
plan subject to Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") (each, a "Plan"), or an entity whose underlying assets
include "plan assets" by reason of any Plan's investment in the entity (a "Plan
Asset Entity") or (B)(1) are ourselves, or are acquiring Offered Securities with
the assets of an "investment fund" (within the meaning of Part V(b) of PTCE
84-14) managed by a "qualified professional asset manager" (within the meaning
of Part V(a) of PTCE 84-14 which has made or properly authorized the decision
for such fund to purchase Offered Securities), under circumstances such that
PTCE 84-14 is applicable to the purchase and holding of such Offered Securities,
(2) are ourselves, or are acquiring Offered Securities with the assets of, a
Plan managed by an "in-house asset manager" (within the meaning of Part IV(a) of
PTCE 96-23) which has made or properly authorized the decision for such Plan to
purchase Offered Securities, under circumstances such that PTCE 96-23 is
applicable to the purchase and holding of such Offered Securities, (3) are an
insurance company pooled separate account purchasing Offered Securities pursuant
to Part I of PTCE 90-1 or a bank collective investment fund purchasing Offered
Securities pursuant to Part I of PTCE 91-38, and in either case no Plan owns
more than 10% of the assets of such account or collective fund (when aggregated
with other Plans of the same employer (or its affiliates) or employee
organization) or (4) are an insurance company using the assets of its general
account to purchase the Offered Securities pursuant to Part I of PTCE 95-60, in
which case the reserves and liabilities for the general account contracts held
by or on behalf of any Plan, together with any other Plans maintained by the
same employer (or its affiliates) or employee organization, do not exceed 10% of
the total reserves and liabilities of the insurance company general account
(exclusive of separate account liabilities), plus surplus as set forth in the
National Association of Insurance Commissioners Annual Statement filed with the
state of domicile of the insurer.

               7. We acknowledge that PXRE, the Trust, the Initial Purchasers
and others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations, warranties and agreements and agree that if
any of the acknowledgments, representations, warranties and agreements made by
us herein with respect to our purchase of the Offered Securities are no longer
accurate, we shall promptly notify the Initial Purchasers. If it is acquiring
any Capital Securities as a fiduciary or agent for one or more investor
accounts, it represents that it has full power to make the foregoing
acknowledgments, representations, warranties and agreements on behalf of each
such investor account.

                                  Very truly yours,


                                  -----------------------------------
                                  (Name of Purchaser)


                                  By:________________________________

                                 Date:_______________________________


                                      B-3





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               Upon transfer, the Offered Securities would be registered in the
name of the new beneficial owner as follows.


Name:__________________________________________________________________________

Address:_______________________________________________________________________


               Taxpayer ID Number:


















                                      B-4





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                                                                       EXHIBIT C

                         FORM OF TRANSFEREE CERTIFICATE

                             TO BE EXECUTED FOR QIBs

                                                               __________, 199__

PXRE Corporation
PXRE Capital Trust I
c/o PXRE Corporation


Re: Purchase of $1,000 stated liquidation amount of 8.85% Capital Trust
    Pass-through Securities'sm' (TRUPS)'sm' (the "Capital Securities") of PXRE
    Capital Trust I (the "Trust")
    -----------------------------

               Reference is hereby made to the Amended and Restated Declaration
dated as of January 29, 1997 (the "Declaration") among Gerald L. Radke, Sanford
M. Kimmel and Joan L. Cadd, as Administrators, First Union Bank of Delaware, as
Delaware Trustee, First Union National Bank, as Institutional Trustee, PXRE
Corporation as Sponsor and the holders from time to time of undivided beneficial
interest in the assets of the Trust. Capitalized terms used but not defined
herein shall have the meanings given them in the Declaration.

               This letter relates to $_______ aggregate liquidation amount of
Capital Securities which are held in the name of [name of transferor] (the
"Transferor") to effect the transfer of such Capital Securities in exchange for
an equivalent beneficial interest in the Rule 144A Global Capital Security.

               In connection with such request, and in respect to such Capital
Securities, the transferor does hereby certify that such Capital Securities are
being transferred in accordance with (i) the transfer restrictions set forth in
the Capital Securities and (ii) Rule 144A under the United States Securities Act
of 1933, as amended ("Rule 144A"), to a transferee that the Transferor
reasonably believes is purchasing the Capital Securities for its own account or
an account with respect to which the transferee exercises sole investment
discretion and the transferee and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in a transaction meeting the
requirements of Rule 144A and in accordance with applicable securities laws of
any state of the United States or any other jurisdiction.







                                      C-1





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               You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.


                                       _______________________________
                                         (Name of Transferor)


                                       By:____________________________
                                       Name:
                                       Title:

                                       Date:__________________________




















                                      C-2

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