UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 10-Q


 (Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                  For the quarterly period ended June 30, 2002

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

               For the transition period from _______ to ________

                           Commission File No. 0-20632

                                FIRST BANKS, INC.
             (Exact name of registrant as specified in its charter)

           MISSOURI                                     43-1175538
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

                   135 North Meramec, Clayton, Missouri 63105
               (Address of principal executive offices) (Zip code)

                                 (314) 854-4600
              (Registrant's telephone number, including area code)
                           --------------------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                          Yes     X        No
                              --------        --------


         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practical date.


                                                    Shares Outstanding
                    Class                            at July 31, 2002
                    -----                            ----------------

        Common Stock, $250.00 par value                   23,661


<PAGE>


                                FIRST BANKS, INC.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>




                                                                                                      Page
                                                                                                      ----

PART I.         FINANCIAL INFORMATION

   ITEM 1.      FINANCIAL STATEMENTS - (UNAUDITED):

<S>                                                                                                     <C>
                CONSOLIDATED BALANCE SHEETS.........................................................    1

                CONSOLIDATED STATEMENTS OF INCOME...................................................    3

                CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                    AND COMPREHENSIVE INCOME........................................................    4

                CONSOLIDATED STATEMENTS OF CASH FLOWS...............................................    5

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS..........................................    6

   ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATIONS.......................................................   15

   ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........................   28

PART II.        OTHER INFORMATION

   ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K....................................................   29

SIGNATURES..........................................................................................   30

</TABLE>

<PAGE>


                         PART I - FINANCIAL INFORMATION
                          ITEM 1 - FINANCIAL STATEMENTS

                                FIRST BANKS, INC.

                    CONSOLIDATED BALANCE SHEETS - (UNAUDITED)
        (dollars expressed in thousands, except share and per share data)
<TABLE>
<CAPTION>


                                                                                        June 30,      December 31,
                                                                                          2002            2001
                                                                                          ----            ----


                                                ASSETS
                                                ------


Cash and cash equivalents:
<S>                                                                                   <C>                  <C>
     Cash and due from banks.......................................................   $    163,371         181,522
     Interest-bearing deposits with other financial institutions
       with maturities of three months or less.....................................            880           4,664
     Federal funds sold............................................................        112,900          55,688
                                                                                      ------------     -----------
          Total cash and cash equivalents..........................................        277,151         241,874
                                                                                      ------------     -----------

Investment securities:
     Available for sale, at fair value.............................................        819,580         610,466
     Held to maturity, at amortized cost (fair value of $21,003 and $20,812
       at June 30, 2002 and December 31, 2001, respectively).......................         20,444          20,602
                                                                                      ------------     -----------
          Total investment securities..............................................        840,024         631,068
                                                                                      ------------     -----------

Loans:
     Commercial, financial and agricultural........................................      1,556,017       1,681,846
     Real estate construction and development......................................        997,190         954,913
     Real estate mortgage..........................................................      2,552,257       2,445,847
     Consumer and installment......................................................        112,241         124,542
     Loans held for sale...........................................................        150,871         204,206
                                                                                      ------------     -----------
          Total loans..............................................................      5,368,576       5,411,354
     Unearned discount.............................................................         (5,944)         (2,485)
     Allowance for loan losses.....................................................       (103,794)        (97,164)
                                                                                      ------------     -----------
          Net loans................................................................      5,258,838       5,311,705
                                                                                      ------------     -----------

Derivative instruments.............................................................         70,128          54,889
Bank premises and equipment, net of accumulated depreciation and amortization......        154,026         149,604
Intangibles associated with the purchase of subsidiaries, net of amortization......        140,774         125,440
Bank-owned life insurance..........................................................         89,796          87,200
Accrued interest receivable........................................................         38,062          37,349
Deferred income taxes..............................................................         94,496          94,546
Other assets.......................................................................         42,767          44,776
                                                                                      ------------     -----------
          Total assets.............................................................   $  7,006,062       6,778,451
                                                                                      ============     ===========

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


<PAGE>
                                FIRST BANKS, INC.

              CONSOLIDATED BALANCE SHEETS (CONTINUED) - (UNAUDITED)
        (dollars expressed in thousands, except share and per share data)

<TABLE>
<CAPTION>

                                                                                        June 30,      December 31,
                                                                                          2002            2001
                                                                                          ----            ----


                                             LIABILITIES
                                             -----------
Deposits:
     Demand:
<S>                                                                                   <C>                  <C>
       Non-interest-bearing........................................................   $    915,618         921,455
       Interest-bearing............................................................        736,301         629,015
     Savings.......................................................................      1,939,002       1,832,939
     Time:
       Time deposits of $100 or more...............................................        500,442         484,201
       Other time deposits.........................................................      1,817,032       1,816,294
                                                                                      ------------     -----------
          Total deposits...........................................................      5,908,395       5,683,904
Short-term borrowings..............................................................        198,922         243,134
Note payable.......................................................................         10,000          27,500
Guaranteed preferred beneficial interests in:
     First Banks, Inc. subordinated debentures.....................................        218,944         191,539
     First Banks America, Inc. subordinated debentures.............................         44,988          44,342
Accrued interest payable...........................................................         19,798          16,006
Deferred income taxes..............................................................         53,916          43,856
Accrued expenses and other liabilities.............................................         52,654          61,515
Minority interest in subsidiary....................................................         18,847          17,998
                                                                                      ------------     -----------
          Total liabilities........................................................      6,526,464       6,329,794
                                                                                      ------------     -----------

                                         STOCKHOLDERS' EQUITY
                                         --------------------

Preferred stock:
     $1.00 par value, 5,000,000 shares authorized, no shares issued
       and outstanding at June 30, 2002 and December 31, 2001......................             --              --
     Class A convertible, adjustable rate, $20.00 par value, 750,000
       shares authorized, 641,082 shares issued and outstanding....................         12,822          12,822
     Class B adjustable rate, $1.50 par value, 200,000 shares authorized,
       160,505 shares issued and outstanding.......................................            241             241
Common stock, $250.00 par value, 25,000 shares authorized,
     23,661 shares issued and outstanding..........................................          5,915           5,915
Capital surplus....................................................................          5,958           6,074
Retained earnings..................................................................        406,348         389,308
Accumulated other comprehensive income.............................................         48,314          34,297
                                                                                      ------------     -----------
          Total stockholders' equity...............................................        479,598         448,657
                                                                                      ------------     -----------
          Total liabilities and stockholders' equity...............................   $  7,006,062       6,778,451
                                                                                      ============     ===========
</TABLE>


<PAGE>
                                FIRST BANKS, INC.

                 CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
             (dollars expressed in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                             Three Months Ended   Six Months Ended
                                                                                  June 30,            June 30,
                                                                             ------------------   ----------------
                                                                               2002       2001     2002     2001
                                                                               ----       ----     ----     ----
Interest income:
<S>                                                                         <C>        <C>        <C>      <C>
     Interest and fees on loans............................................ $ 98,782   105,855    197,824  212,917
     Investment securities.................................................    7,868     6,341     15,149   14,821
     Federal funds sold and other..........................................      653     1,160        942    1,655
                                                                            --------   -------    -------  -------
          Total interest income............................................  107,303   113,356    213,915  229,393
                                                                            --------   -------    -------  -------
Interest expense:
     Deposits:
       Interest-bearing demand.............................................    2,281     1,807      3,953    3,480
       Savings.............................................................    9,265    13,342     18,434   27,525
       Time deposits of $100 or more.......................................    4,889     7,453     10,179   15,329
       Other time deposits.................................................   16,970    25,954     35,851   53,143
     Short-term borrowings.................................................      912     1,673      1,829    3,662
     Note payable..........................................................      181       543        530    1,773
     Guaranteed preferred debentures.......................................    7,117     4,489     13,329    8,978
                                                                            --------   -------    -------  -------
          Total interest expense...........................................   41,615    55,261     84,105  113,890
                                                                            --------   -------    -------  -------
          Net interest income..............................................   65,688    58,095    129,810  115,503
Provision for loan losses..................................................   12,000     3,720     25,000    7,110
                                                                            --------   -------    -------  -------
          Net interest income after provision for loan losses..............   53,688    54,375    104,810  108,393
                                                                            --------   -------    -------  -------
Noninterest income:
     Service charges on deposit accounts and customer service fees.........    7,014     5,312     13,494   10,537
     Gain on mortgage loans sold and held for sale.........................    7,292     3,864     12,459    7,332
     Gain on sale of credit card portfolio, net of expenses................       --        --         --    2,275
     Net gain (loss) on sales of available-for-sale investment securities..       --        61         92     (113)
     Bank-owned life insurance investment income...........................    1,526     1,044      2,813    2,099
     Net gain (loss) on derivative instruments.............................       90     4,989       (249)   5,486
     Other.................................................................    4,607     4,154     10,755    8,282
                                                                            --------   -------    -------  -------
          Total noninterest income.........................................   20,529    19,424     39,364   35,898
                                                                            --------   -------    -------  -------
Noninterest expense:
     Salaries and employee benefits........................................   28,895    23,345     56,156   45,797
     Occupancy, net of rental income.......................................    4,964     4,100      9,636    8,216
     Furniture and equipment...............................................    4,396     2,406      8,539    5,617
     Postage, printing and supplies........................................    1,317     1,103      2,859    2,258
     Information technology fees...........................................    8,497     6,452     16,597   12,951
     Legal, examination and professional fees..............................    2,106     1,734      3,597    3,424
     Amortization of intangibles associated with the
        purchase of subsidiaries...........................................      482     1,862        964    3,712
     Communications........................................................      908       732      1,704    1,513
     Advertising and business development..................................    1,507     1,595      2,951    3,182
     Other.................................................................    6,148    16,580     13,075   20,368
                                                                            --------   -------    -------  -------
          Total noninterest expense........................................   59,220    59,909    116,078  107,038
                                                                            --------   -------    -------  -------
          Income before provision for income taxes, minority interest
              in income of subsidiary and cumulative effect of change
              in accounting principle......................................   14,997    13,890     28,096   37,253
Provision for income taxes.................................................    5,328     5,457     10,099   14,581
                                                                            --------   -------    -------  -------
          Income before minority interest in income of subsidiary and
              cumulativeeffect of change in accounting principle...........    9,669     8,433     17,997   22,672
Minority interest in income of subsidiary..................................      301       534        629    1,045
                                                                            --------   -------    -------  -------
          Income before cumulative effect of change in
              accounting principle.........................................    9,368     7,899     17,368   21,627
Cumulative effect of change in accounting principle, net of tax............       --        --         --   (1,376)
                                                                            --------   -------    -------  -------
          Net income.......................................................    9,368     7,899     17,368   20,251
Preferred stock dividends..................................................      132       132        328      328
                                                                            --------   -------    -------  -------
          Net income available to common stockholders...................... $  9,236     7,767     17,040   19,923
                                                                            ========   =======    =======  =======
<PAGE>

Basic earnings per common share:
     Income before cumulative effect of change in accounting principle..... $ 390.35    328.27     720.18   900.21
     Cumulative effect of change in accounting principle, net of tax.......       --        --         --   (58.16)
                                                                            ---------  -------    -------  -------
     Basic................................................................. $ 390.35    328.27     720.18   842.05
                                                                            ========   =======    =======  =======

Diluted earnings per common share:
     Income before cumulative effect of change in accounting principle..... $ 384.48    322.78     712.75   882.65
     Cumulative effect of change in accounting principle, net of tax.......       --        --         --   (58.16)
                                                                            --------   -------    -------  -------
     Diluted............................................................... $ 384.48    322.78     712.75   824.49
                                                                            =========  =======    =======  =======

Weighted average common stock outstanding..................................   23,661    23,661     23,661   23,661
                                                                            ========   =======    =======  =======

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                                          FIRST BANKS, INC.

                   CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME - (UNAUDITED)
                            Six Months Ended June 30, 2002 and 2001 and Six Months Ended December 31, 2001
                                        (dollars expressed in thousands, except per share data)


                                                     Adjustable Rate                                        Accu-
                                                     Preferred Stock                                       mulated
                                                   ------------------                                       Other    Total
                                                   Class A                               Compre-           Compre-   Stock-
                                                   Conver-             Common   Capital  hensive Retained  hensive  holders'
                                                    tible     Class B   Stock   Surplus  Income  Earnings  Income    Equity
                                                    -----     -------   -----   -------  ------- --------  ------    ------

<S>                                                <C>          <C>    <C>       <C>              <C>        <C>    <C>
Consolidated balances, December 31, 2000.........  $12,822      241    5,915     2,267            325,580    6,021  352,846
Six months ended June 30, 2001:
    Comprehensive income:
      Net income.................................       --       --       --        --   20,251    20,251       --   20,251
      Other comprehensive income, net of tax:
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --    9,529        --    9,529    9,529
        Derivative instruments:
          Cumulative effect of change in
             accounting principle, net...........       --       --       --        --    9,069        --    9,069    9,069
          Current period transactions............       --       --       --        --    7,621        --    7,621    7,621
          Reclassification to earnings...........       --       --       --        --   (2,927)       --   (2,927)  (2,927)
                                                                                         ------
      Comprehensive income.......................                                        43,543
                                                                                         ======
    Class A preferred stock dividends,
        $0.50 per share..........................       --       --       --        --               (321)      --     (321)
    Class B preferred stock dividends,
        $0.04 per share..........................       --       --       --        --                 (7)      --       (7)
    Effect of capital stock transactions of
      majority-owned subsidiary..................       --       --       --       343                 --       --      343
                                                   -------      ---    -----     -----            -------  -------  -------
Consolidated balances, June 30, 2001.............   12,822      241    5,915     2,610            345,503   29,313  396,404
Six months ended December 31, 2001:
    Comprehensive income:
      Net income.................................       --       --       --        --   44,263    44,263       --   44,263
      Other comprehensive income, net of tax:
        Unrealized losses on securities, net of
          reclassification adjustment (1)........       --       --       --        --  (11,400)       --  (11,400) (11,400)
        Derivative instruments:
          Current period transactions............       --       --       --        --   19,400        --   19,400   19,400
          Reclassification to earnings...........       --       --       --        --   (3,016)       --   (3,016)  (3,016)
                                                                                         ------
      Comprehensive income.......................       --       --       --        --   49,247
                                                                                         ======
    Class A preferred stock dividends,
        $0.70 per share..........................       --       --       --        --               (448)      --     (448)
    Class B preferred stock dividends,
        $0.07 per share..........................       --       --       --        --                (10)      --      (10)
    Effect of capital stock transactions of
      majority-owned subsidiary..................       --       --       --     3,464                 --       --    3,464
                                                   -------      ---    -----     -----            -------   ------  -------
Consolidated balances, December 31, 2001.........   12,822      241    5,915     6,074            389,308   34,297  448,657
Six months ended June 30, 2002:
    Comprehensive income:
      Net income.................................       --       --       --        --   17,368    17,368       --   17,368
      Other comprehensive income, net of tax:
        Unrealized gains on securities, net of
          reclassification adjustment (1)........       --       --       --        --    7,620        --    7,620    7,620
        Derivative instruments:
          Current period transactions............       --       --       --        --    6,397        --    6,397    6,397
                                                                                         ------
      Comprehensive income.......................                                        31,385
                                                                                         ======
    Class A preferred stock dividends,
        $0.50 per share..........................       --       --       --        --               (321)      --     (321)
    Class B preferred stock dividends,
        $0.04 per share..........................       --       --       --        --                 (7)      --       (7)
    Effect of capital stock transactions of
      majority-owned subsidiary..................       --       --       --      (116)                --       --     (116)
                                                   -------      ---    -----     -----            -------   ------  -------
Consolidated balances, June 30, 2002.............  $12,822      241    5,915     5,958            406,348   48,314  479,598
                                                   =======      ===    =====     =====            =======   ======  =======

</TABLE>
<PAGE>
-------------------------
(1)  Disclosure of reclassification adjustment:

<TABLE>
<CAPTION>

                                                                        Three Months Ended   Six Months Ended     Six Months Ended
                                                                              June 30,           June 30,           December 31,
                                                                        ------------------   ----------------
                                                                          2002      2001     2002       2001            2001
                                                                          ----      ----     ----       ----            ----

<S>                                                                       <C>      <C>      <C>       <C>             <C>
     Unrealized gains on investment securities arising
        during the period..............................................   $7,086   4,098    7,680     9,456               842
     Less reclassification adjustment for gains (losses)
        included in net income.........................................       --      40       60       (73)           12,242
                                                                          -----    -----    -----     -----           -------
     Unrealized gains (losses) on investment securities................   $7,086   4,058    7,620     9,529           (11,400)
                                                                          ======   =====    =====     =====           =======

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


<PAGE>
                                FIRST BANKS, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
                        (dollars expressed in thousands)

<TABLE>
<CAPTION>
                                                                                                 Six Months Ended
                                                                                                     June 30,
                                                                                              ---------------------
                                                                                               2002           2001
                                                                                               ----           ----

Cash flows from operating activities:
<S>                                                                                          <C>             <C>
     Net income...........................................................................   $ 17,368        20,251
     Adjustments to reconcile net income to net cash used in operating activities:
       Cumulative effect of change in accounting principle, net of tax....................         --         1,376
       Depreciation and amortization of bank premises and equipment.......................      9,261         5,734
       Amortization, net of accretion.....................................................      7,020         4,090
       Originations and purchases of loans held for sale..................................   (806,713)     (757,526)
       Proceeds from the sale of loans held for sale......................................    757,023       587,612
       Provision for loan losses..........................................................     25,000         7,110
       Provision for income taxes.........................................................     10,099        14,581
       Payments of income taxes...........................................................    (15,792)      (21,288)
       (Increase) decrease in accrued interest receivable.................................       (218)        2,949
       Interest accrued on liabilities....................................................     84,105       113,890
       Payments of interest on liabilities................................................    (81,341)     (109,947)
       Gain on mortgage loans sold and held for sale......................................    (12,459)       (7,332)
       Gain on sale of credit card portfolio, net of expenses.............................         --        (2,275)
       Net (gain) loss on sales of available-for-sale investment securities...............        (92)          113
       Net loss (gain) on derivative instruments..........................................        249        (5,486)
       Other operating activities, net....................................................      3,147        (8,574)
       Minority interest in income of subsidiary..........................................        629         1,045
                                                                                             --------     ---------
          Net cash used in operating activities...........................................     (2,714)     (153,677)
                                                                                             --------     ---------

Cash flows from investing activities:
     Cash received from acquired entities, net of cash and cash equivalents paid..........     44,097            --
     Proceeds from sales of investment securities available for sale......................        192        71,023
     Maturities of investment securities available for sale...............................    398,629       194,642
     Maturities of investment securities held to maturity.................................      2,405         1,887
     Purchases of investment securities available for sale................................   (416,673)      (57,421)
     Purchases of investment securities held to maturity..................................     (2,260)         (240)
     Proceeds from terminations of derivative instruments.................................         --         5,396
     Net decrease in loans................................................................    118,128        27,258
     Recoveries of loans previously charged-off...........................................      8,297         3,775
     Purchases of bank premises and equipment.............................................     (7,621)      (20,403)
     Other investing activities, net......................................................      4,721         1,098
                                                                                             --------     ---------
          Net cash provided by investing activities.......................................    149,915       227,015
                                                                                             --------     ---------

Cash flows from financing activities:
     Increase in demand and savings deposits..............................................     58,743        11,883
     Decrease in time deposits............................................................   (114,739)      (27,926)
     Decrease in federal funds purchased..................................................    (81,000)           --
     (Decrease) increase in Federal Home Loan Bank advances...............................     (4,600)       50,000
     Increase in securities sold under agreements to repurchase...........................     23,267        10,608
     Advances drawn on note payable.......................................................     36,500         5,000
     Repayments of note payable...........................................................    (54,000)      (53,500)
     Proceeds from issuance of guaranteed preferred subordinated debentures...............     24,233            --
     Payment of preferred stock dividends.................................................       (328)         (328)
     Other financing activities, net......................................................         --           (94)
                                                                                             --------     ---------
          Net cash used in financing activities...........................................   (111,924)       (4,357)
                                                                                             --------     ---------
          Net increase in cash and cash equivalents.......................................     35,277        68,981
Cash and cash equivalents, beginning of period............................................    241,874       198,279
                                                                                             --------     ---------
Cash and cash equivalents, end of period..................................................   $277,151       267,260
                                                                                             ========     =========

Noncash investing and financing activities:
     Reduction of deferred tax asset valuation reserve....................................   $     --           565
     Loans transferred to other real estate...............................................      1,622         1,312
     Loans held for sale transferred to mortgage-backed securities........................    100,317        15,139
     Loans held for sale transferred to loans.............................................      2,741        28,351
                                                                                             ========     =========

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>


<PAGE>


                                FIRST BANKS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 (1)     BASIS OF PRESENTATION

         The  consolidated   financial  statements  of  First  Banks,  Inc.  and
subsidiaries  (First Banks or the Company) are  unaudited  and should be read in
conjunction with the  consolidated  financial  statements  contained in the 2001
Annual Report on Form 10-K.  The  consolidated  financial  statements  have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America and conform to predominant practices within the banking
industry.  Management  of  First  Banks  has  made a  number  of  estimates  and
assumptions  relating  to the  reporting  of  assets  and  liabilities  and  the
disclosure  of contingent  assets and  liabilities  to prepare the  consolidated
financial statements. In the opinion of management, all adjustments,  consisting
of normal recurring accruals considered necessary for a fair presentation of the
results of  operations  for the  interim  periods  presented  herein,  have been
included. Operating results for the three and six months ended June 30, 2002 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending December 31, 2002.

         The  consolidated  financial  statements  include the accounts of First
Banks,  Inc.  and its  subsidiaries,  net of  minority  interest,  as more fully
described below.  All significant  intercompany  accounts and transactions  have
been  eliminated.  Certain  reclassifications  of 2001 amounts have been made to
conform  to the 2002  presentation.  In  particular,  the  guaranteed  preferred
beneficial  interests  in First  Banks,  Inc.  and  First  Banks  America,  Inc.
subordinated  debentures has been reclassified  into the liabilities  section on
the  consolidated  balance  sheets rather than presented as a separate line item
excluded from the calculation of total liabilities. Consequently, the guaranteed
preferred  debentures  expense has been  reclassified  to interest  expense from
noninterest expense in the consolidated statements of income.

         First Banks operates through its subsidiary bank holding  companies and
subsidiary financial  institutions  (collectively  referred to as the Subsidiary
Banks) as follows:

         Union Financial Group, Ltd., headquartered in Swansea, Illinois (UFG),
           and its wholly owned subsidiary:
              First Bank, headquartered in St. Louis County, Missouri;
         First Banks America, Inc., headquartered in San Francisco, California
           (FBA), and its wholly owned subsidiary:
              The San Francisco Company,  headquartered in San Francisco,
                California (SFC), and its wholly-owned subsidiary:
                  First Bank & Trust, headquartered in San Francisco, California
                  (FB&T).

         The  Subsidiary  Banks  are  wholly  owned by their  respective  parent
companies  except FBA,  which was 93.76% and 93.69% owned by First Banks at June
30, 2002 and December 31, 2001, respectively.

 (2)     ACQUISITIONS

         On January 15, 2002,  First Banks  completed its  acquisition of Plains
Financial Corporation (PFC), and its wholly owned banking subsidiary, PlainsBank
of  Illinois,  National  Association  (PlainsBank),  Des Plaines,  Illinois,  in
exchange  for $36.5  million  in cash.  PFC  operated  a total of three  banking
facilities  in Des  Plaines,  Illinois,  and one  banking  office  in Elk  Grove
Village, Illinois. The acquisition was funded from borrowings under First Banks'
credit  agreement with a group of unaffiliated  financial  institutions.  At the
time of the transaction,  PFC had $256.3 million in total assets, $150.4 million
in loans, net of unearned discount,  $81.0 million in investment  securities and
$213.4  million  in  deposits.  This  transaction  was  accounted  for using the
purchase method of accounting. The excess of the cost over the fair value of the
net assets acquired was  approximately  $12.6 million and will not be amortized,
but instead will be  periodically  tested for impairment in accordance  with the
requirements  of SFAS No. 142 (as defined below).  The core deposit  intangibles
were  approximately  $2.9  million  and are being  amortized  over  seven  years
utilizing  the  straight-line  method.  PFC was  merged  with and into UFG,  and
PlainsBank was merged with and into First Bank.

         On June 22, 2002,  FB&T  completed  its  assumption of the deposits and
certain  liabilities  and the  purchase  of certain  assets of the  Garland  and
Denton, Texas branch offices of Union Planters Bank, National  Association.  The
transaction  resulted in the  acquisition  of $15.3  million in deposits and one
branch  office in Garland and $49.6  million in deposits and one branch  office,
including  a  detached  drive-thru   facility,   in  Denton.  The  core  deposit
intangibles associated with the branch purchases were $1.4 million and are being
amortized over seven years.

<PAGE>

 (3)     IMPLEMENTATION OF ACCOUNTING PRONOUNCEMENTS

         In July 2001, the Financial  Accounting  Standards  Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 142 -- Goodwill and Other
Intangible  Assets.  SFAS No. 142 requires that goodwill and  intangible  assets
with  indefinite  useful lives no longer be  amortized,  but instead  tested for
impairment at least annually in accordance  with the provisions of SFAS No. 142.
SFAS No. 142 also requires that intangible  assets with definite useful lives be
amortized  over  their  respective  estimated  useful  lives to their  estimated
residual values,  and reviewed for impairment in accordance with SFAS No. 144 --
Accounting  for the  Impairment or Disposal of Long-Lived  Assets,  as discussed
below.  The amortization of goodwill ceased upon adoption of SFAS No. 142, which
for calendar year-end companies was January 1, 2002.

         On January 1, 2002,  First Banks  adopted  SFAS No. 142. At the date of
adoption,  First  Banks had  unamortized  goodwill  of $115.9  million  and core
deposit  intangibles  of $9.6  million,  which were  subject  to the  transition
provisions  of SFAS No. 142.  Under SFAS No. 142,  First Banks will  continue to
amortize,  on a straight-line  basis, its core deposit  intangibles and goodwill
associated  with  purchases  of branch  offices.  Goodwill  associated  with the
purchase of  subsidiaries  will no longer be  amortized,  but  instead,  will be
tested  annually  for  impairment  following  First Banks'  existing  methods of
measuring and recording impairment losses.

         First  Banks  completed  the  transitional   goodwill  impairment  test
required under SFAS No. 142, to determine the potential  impact,  if any, on the
consolidated  financial  statements.  The results of the  transitional  goodwill
impairment testing did not identify any goodwill impairment losses.

         Intangible assets associated with the purchase of subsidiaries,  net of
amortization,  were comprised of the following at June 30, 2002 and December 31,
2001:
<TABLE>
<CAPTION>

                                                        June 30, 2002                December 31, 2001
                                                ----------------------------    --------------------------
                                                  Gross                          Gross
                                                 Carrying       Accumulated     Carrying      Accumulated
                                                  Amount       Amortization      Amount      Amortization
                                                  ------       ------------      ------      ------------
                                                             (dollars expressed in thousands)

     Amortized intangible assets:
<S>                                             <C>                  <C>           <C>
         Core deposit intangibles...........    $   13,871           (893)         9,580               --
         Goodwill associated with
           purchases of branch offices......         2,210           (648)         2,210             (576)
                                                ----------        -------       --------          -------
              Total.........................    $   16,081         (1,541)        11,790             (576)
                                                ==========        =======       ========          =======

     Unamortized intangible assets:
         Goodwill associated with the
           purchase of subsidiaries.........    $  126,234                       114,226
                                                ==========                      ========
</TABLE>

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  and branch offices was $482,000 and $964,000 for the three and six
months ended June 30, 2002, respectively,  and $1.9 million and $3.7 million for
the comparable periods in 2001.  Amortization of intangibles associated with the
purchase of subsidiaries, including amortization of core deposit intangibles and
branch  purchases,  has been estimated  through 2007 in the following table, and
does not take into  consideration  any potential  future  acquisitions or branch
purchases.

                                                       (dollars expressed
                                                          in thousands)

            Year ending December 31:
                2002...................................  $   2,026
                2003...................................      2,124
                2004...................................      2,124
                2005...................................      2,124
                2006...................................      2,124
                2007...................................      2,124
                                                         ---------
                   Total...............................  $  12,646
                                                         =========




<PAGE>



         Changes in the carrying amount of goodwill for the three and six months
ended June 30, 2002 were as follows:
<TABLE>
<CAPTION>

                                                    Three Months Ended June 30, 2002       Six Months Ended June 30, 2002
                                                    --------------------------------     ----------------------------------
                                                    First Bank     FB&T        Total     First Bank      FB&T         Total
                                                    ----------     ----        -----     ----------      ----         -----
                                                                      (dollars expressed in thousands)

<S>                                                 <C>           <C>        <C>           <C>          <C>          <C>
         Balance, beginning of period............   $ 31,912      96,758     128,670       19,165       96,695        115,860
         Goodwill acquired during period.........         --          --          --       12,577           --         12,577
         Acquisition-related adjustments.........       (739)        (99)       (838)        (569)          --           (569)
         Amortization - purchases of
           branch offices........................         --         (36)        (36)          --          (72)           (72)
                                                    --------     -------     --------     -------       ------        -------
           Balance, end of period................   $ 31,173      96,623     127,796       31,173       96,623        127,796
                                                    ========     =======     =======      =======       ======        =======
</TABLE>

         The following is a reconciliation  of reported net income to net income
adjusted to reflect the adoption of SFAS No. 142, as if it had been  implemented
on January 1, 2001:
<TABLE>
<CAPTION>

                                                              Three Months Ended             Six Months Ended
                                                                   June 30,                      June 30,
                                                             --------------------          --------------------
                                                              2002         2001             2002           2001
                                                              ----         ----             ----           ----
                                                                     (dollars expressed in thousands)
       Net income:
<S>                                                         <C>             <C>            <C>            <C>
         Reported net income...........................     $ 9,368         7,899          17,368         20,251
         Add back - goodwill amortization..............          --         1,817              --          3,623
                                                            -------       -------         -------         ------
           Adjusted net income.........................     $ 9,368         9,716          17,368         23,874
                                                            =======       =======         =======         ======

       Basic earnings per share:
         Reported net income...........................     $390.35        328.27          720.18         842.05
         Add back - goodwill amortization..............          --         76.82              --         153.11
                                                            -------       -------         -------         ------
           Adjusted net income.........................     $390.35        405.09          720.18         995.16
                                                            =======       =======         =======         ======

       Diluted earnings per share:
         Reported net income...........................     $384.48        322.78          712.75         824.49
         Add back - goodwill amortization..............          --         74.31              --         147.54
                                                            -------       -------         -------         ------
           Adjusted net income.........................     $384.48        397.09          712.75         972.03
                                                            =======       =======         =======         ======
</TABLE>

         In August  2001,  the FASB  issued SFAS No. 144 --  Accounting  for the
Impairment or Disposal of Long-Lived  Assets.  SFAS No. 144 supersedes  SFAS No.
121 -- Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be  Disposed  Of.  SFAS No. 144  addresses  financial  accounting  and
reporting for the impairment or disposal of long-lived  assets and requires that
one accounting  model be used for  long-lived  assets to be disposed of by sale,
whether  previously held and used or newly  acquired.  SFAS No. 144 broadens the
presentation of discontinued  operations to include more disposal  transactions.
Therefore, the accounting for similar events and circumstances will be the same.
The provisions of SFAS No. 144 are effective for financial statements issued for
fiscal years beginning after December 15, 2001, and interim periods within those
fiscal years, with early application encouraged.  The provisions of SFAS No. 144
generally  are to be applied  prospectively.  On January  1, 2002,  First  Banks
implemented  SFAS  No.  144,  which  did  not  have  a  material  effect  on the
consolidated financial statements.
<PAGE>

 (4)     MORTGAGE SERVICING RIGHTS

         Mortgage  servicing  rights are  amortized in proportion to the related
estimated net servicing  income on a  disaggregated,  discounted  basis over the
estimated  lives of the related  mortgages  considering the level of current and
anticipated repayments,  which range from five to 10 years. The weighted average
amortization period of the mortgage servicing rights is seven years.

         Changes in mortgage  servicing  rights,  net of  amortization,  for the
periods indicated were as follows:
<TABLE>
<CAPTION>
                                                                       Three Months Ended         Six Months Ended
                                                                            June 30,                   June 30,
                                                                      -------------------        -------------------
                                                                      2002           2001         2002         2001
                                                                      ----           ----         ----         ----
                                                                             (dollars expressed in thousands)

<S>                                                                   <C>           <C>          <C>          <C>
           Balance, beginning of period...........................    $11,746       7,258        10,125       7,048
           Originated mortgage servicing rights...................      1,522       2,257         3,960       3,291
           Amortization...........................................       (914)       (886)       (1,731)     (1,710)
                                                                      -------       -----        ------      ------
           Balance, end of period.................................    $12,354       8,629        12,354       8,629
                                                                      =======       =====        ======      ======
</TABLE>

         Amortization of mortgage servicing rights, as it relates to the balance
at June  30,  2002 of $12.4  million,  has been  estimated  through  2007 in the
following table:
<TABLE>
<CAPTION>

                                                                 (dollars expressed in thousands)

                  Year ending December 31:
<S>                                                                        <C>
                      2002 (1)...........................................  $   3,460
                      2003...............................................      3,341
                      2004...............................................      3,138
                      2005...............................................      3,051
                      2006...............................................      1,095
                      2007...............................................         --
                                                                           ---------
                         Total...........................................  $  14,085
                                                                           =========
</TABLE>
-----------------------
(1) Includes $1.7 million of amortization for the six months ended June 30,
    2002.
<PAGE>

(5)      EARNINGS PER COMMON SHARE

         The following is a reconciliation of the numerators and denominators of
the basic and  diluted  earnings  per share (EPS)  computations  for the periods
indicated:
<TABLE>
<CAPTION>

                                                                               Income         Shares        Per Share
                                                                             (numerator)   (denominator)      Amount
                                                                             -----------   -------------      ------
                                                                           (dollars in thousands, except per share data)
     Three months ended June 30, 2002:
<S>                                                                          <C>               <C>         <C>
         Basic EPS - income before cumulative effect.....................    $   9,236         23,661      $  390.35
         Cumulative effect of change in accounting principle,
           net of tax....................................................           --             --             --
                                                                             ---------        -------      ---------
         Basic EPS - income available to common stockholders.............        9,236         23,661         390.35
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          128            695          (5.87)
                                                                             ---------        -------      ---------
         Diluted EPS - income available to common stockholders...........    $   9,364         24,356      $  384.48
                                                                             =========        =======      =========

     Three months ended June 30, 2001:
         Basic EPS - income before cumulative effect.....................    $   7,767         23,661      $  328.27
         Cumulative effect of change in accounting principle,
           net of tax....................................................           --             --             --
                                                                             ---------        -------      ---------
         Basic EPS - income available to common stockholders.............        7,767         23,661         328.27
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          128            800          (5.49)
                                                                             ---------        -------      ---------
         Diluted EPS - income available to common stockholders...........    $   7,895         24,461      $  322.78
                                                                             =========        =======      =========

     Six months ended June 30, 2002:
         Basic EPS - income before cumulative effect.....................    $  17,040         23,661      $  720.18
         Cumulative effect of change in accounting principle, net of tax.           --             --             --
                                                                             ---------        -------      ---------
         Basic EPS - income available to common stockholders.............       17,040         23,661         720.18
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          321            696          (7.43)
                                                                             ---------        -------      ---------
         Diluted EPS - income available to common stockholders...........    $  17,361         24,357      $  712.75
                                                                             =========        =======      =========

     Six months ended June 30, 2001:
         Basic EPS - income before cumulative effect.....................    $  21,299         23,661      $  900.21
         Cumulative effect of change in accounting principle,
           net of tax....................................................       (1,376)            --         (58.16)
                                                                             ---------        -------      ---------
         Basic EPS - income available to common stockholders.............       19,923         23,661         842.05
         Effect of dilutive securities:
           Class A convertible preferred stock...........................          321            893         (17.56)
                                                                             ---------        -------      ---------
         Diluted EPS - income available to common stockholders...........    $  20,244         24,554      $  824.49
                                                                             =========        =======      =========
</TABLE>
<PAGE>

(6)      TRANSACTIONS WITH RELATED PARTIES

         First Brokerage America,  L.L.C., a limited liability corporation which
is  indirectly  owned by First  Banks'  Chairman  and  members of his  immediate
family,  received  approximately $978,000 and $1.7 million for the three and six
months  ended June 30, 2002,  and  $676,000 and $1.4 million for the  comparable
periods in 2001,  respectively,  in commissions paid by unaffiliated third-party
companies.  The commissions received were primarily in connection with the sales
of  annuities,  securities  and other  insurance  products to  customers  of the
Subsidiary Banks.

         First Services,  L.P., a limited partnership  indirectly owned by First
Banks'  Chairman and his adult  children,  provides  information  technology and
various related  services to First Banks,  Inc. and its Subsidiary  Banks.  Fees
paid under  agreements  with First  Services,  L.P.  were $7.0 million and $13.7
million for the three and six months ended June 30,  2002,  and $5.6 million and
$10.9 million for the comparable periods in 2001, respectively. During the three
months  ended June 30,  2002 and 2001,  First  Services,  L.P.  paid First Banks
$975,000 and  $498,000,  respectively,  and during the six months ended June 30,
2002 and 2001, First Services,  L.P. paid First Banks $1.9 million and $984,000,
respectively,  in rental fees for the use of data processing and other equipment
owned by First Banks.

(7)      REGULATORY CAPITAL

         First Banks and the Subsidiary Banks are subject to various  regulatory
capital  requirements  administered  by the federal and state banking  agencies.
Failure to meet minimum capital  requirements can initiate certain mandatory and
possibly  additional  discretionary  actions by regulators  that, if undertaken,
could have a direct material effect on First Banks' financial statements.  Under
capital adequacy  guidelines and the regulatory  framework for prompt corrective
action,  First  Banks  and the  Subsidiary  Banks  must  meet  specific  capital
guidelines that involve quantitative measures of assets, liabilities and certain
off-balance-sheet  items as calculated  under regulatory  accounting  practices.
Capital amounts and classifications are also subject to qualitative judgments by
the regulators about components, risk weightings and other factors.

         Quantitative  measures  established  by  regulation  to ensure  capital
adequacy  require  First  Banks and the  Subsidiary  Banks to  maintain  minimum
amounts and ratios of total and Tier I capital  (as defined in the  regulations)
to  risk-weighted  assets,  and of Tier I capital to average assets.  Management
believes,  as of June 30, 2002,  First Banks and the Subsidiary  Banks were each
well capitalized under the applicable regulations.

         As of June 30,  2002,  the most recent  notification  from First Banks'
primary  regulator  categorized  First  Banks and the  Subsidiary  Banks as well
capitalized and FBA as adequately capitalized under the regulatory framework for
prompt corrective action. To be categorized as well capitalized, First Banks and
the Subsidiary Banks must maintain minimum total  risk-based,  Tier I risk-based
and Tier I leverage ratios as set forth in the table below.

         At June 30, 2002 and December 31, 2001, First Banks' and the Subsidiary
Banks' required and actual capital ratios were as follows:
<TABLE>
<CAPTION>

                                                                Actual                                   To Be Well
                                                       ------------------------                       Capitalized Under
                                                       June 30,    December 31,      For Capital      Prompt Corrective
                                                        2002           2001       Adequacy Purposes   Action Provisions
                                                        ----           ----       -----------------   -----------------

     Total capital (to risk-weighted assets):
<S>                                                      <C>           <C>               <C>                <C>
              First Banks.............................   10.91%        10.53%            8.0%               10.0%
              First Bank..............................   10.59         10.14             8.0                10.0
              FB&T....................................   10.88         11.27             8.0                10.0

     Tier 1 capital (to risk-weighted assets):
              First Banks.............................    7.61          7.57             4.0                 6.0
              First Bank..............................    9.33          8.89             4.0                 6.0
              FB&T....................................    9.63         10.02             4.0                 6.0

     Tier 1 capital (to average assets):
              First Banks.............................    6.78          7.24             3.0                 5.0
              First Bank..............................    7.95          8.67             3.0                 5.0
              FB&T....................................    9.17          9.47             3.0                 5.0
</TABLE>


<PAGE>



(8)      BUSINESS SEGMENT RESULTS

         First Banks' business segments are its Subsidiary Banks. The reportable
business  segments are consistent with the management  structure of First Banks,
the  Subsidiary   Banks  and  the  internal   reporting   system  that  monitors
performance.

         Through the respective  branch  networks,  the Subsidiary Banks provide
similar  products and services in their defined  geographic  areas. The products
and services  offered  include a broad range of commercial and personal  deposit
products,  including demand, savings, money market and time deposit accounts. In
addition,  the  Subsidiary  Banks  market  combined  basic  services for various
customer groups,  including packaged accounts for more affluent  customers,  and
sweep accounts,  lock-box  deposits and cash management  products for commercial
customers.  The Subsidiary Banks also offer both consumer and commercial  loans.
Consumer lending includes  residential real estate,  home equity and installment
lending.  Commercial  lending  includes  commercial,  financial and agricultural
loans, real estate  construction and development  loans,  commercial real estate
loans, asset-based loans, commercial leasing and trade financing.

         Other  financial  services  include  mortgage  banking,   debit  cards,
brokerage services, credit-related insurance, internet banking, automated teller
machines,  telephone banking,  safe deposit boxes, escrow and bankruptcy deposit
services,  stock option services and trust,  private  banking and  institutional
money  management  services.  The revenues  generated by each  business  segment
consist  primarily of interest  income,  generated  from the loan and investment
security  portfolios,  and service charges and fees,  generated from the deposit
products and services. The geographic areas include eastern Missouri,  Illinois,
southern  and northern  California  and Houston,  Dallas,  Irving,  McKinney and
Denton,  Texas.  The products  and  services are offered to customers  primarily
within  their  respective   geographic   areas,   with  the  exception  of  loan
participations executed between the Subsidiary Banks.

         The business  segment results are consistent with First Banks' internal
reporting  system and, in all  material  respects,  with  accounting  principles
generally accepted in the United States of America and practices  predominant in
the banking industry.


<PAGE>



        The business segment results are summarized as follows:
<TABLE>
<CAPTION>
                                                                             First Bank                         FB&T
                                                                     --------------------------      -------------------------
                                                                     June 30,      December 31,       June 30,   December 31,
                                                                       2002            2001             2002         2001
                                                                       ----            ----             ----         ----
                                                                                   (dollars expressed in thousands)
Balance sheet information:

<S>                                                                  <C>                <C>            <C>          <C>
Investment securities...........................................   $  456,955           245,365        360,218      368,207
Loans, net of unearned discount.................................    3,084,650         3,086,023      2,278,398    2,323,263
Intangibles associated with the purchase
   of subsidiaries, net of amortization.........................       36,788            22,287        103,986      103,153
Total assets....................................................    3,927,412         3,707,081      3,058,123    3,057,920
Deposits........................................................    3,400,478         3,142,676      2,527,248    2,555,396
Note payable....................................................           --                --             --           --
Stockholders' equity............................................      362,293           321,336        394,158      398,713
                                                                   ==========         =========      =========    =========

                                                                             First Bank                         FB&T
                                                                         Three Months Ended              Three Months Ended
                                                                              June 30,                        June 30,
                                                                     --------------------------        ----------------------
                                                                      2002                 2001          2002          2001
                                                                      ----                 ----          ----          ----
Income statement information:

Interest income.................................................   $   59,894            61,391         47,268       52,339
Interest expense................................................       21,595            30,121         12,757       20,712
                                                                   ----------         ---------      ---------    ---------
     Net interest income........................................       38,299            31,270         34,511       31,627
Provision for loan losses.......................................        4,200             2,900          7,800          820
                                                                   ----------         ---------      ---------    ---------
     Net interest income after provision for loan losses........       34,099            28,370         26,711       30,807
                                                                   ----------         ---------      ---------    ---------
Noninterest income..............................................       15,815            13,373          5,264        6,343
Noninterest expense.............................................       36,428            24,561         22,157       22,171
                                                                   ----------         ---------      ---------    ---------
     Income before provision for income taxes
       and minority interest in income of subsidiary............       13,486            17,182          9,818       14,979
Provision for income taxes......................................        4,367             6,000          3,720        5,772
                                                                   ----------         ---------      ---------    ---------
     Income before minority interest in income of subsidiary....        9,119            11,182          6,098        9,207
Minority interest in income of subsidiary.......................           --                --             --           --
                                                                   ----------         ---------      ---------    ---------
     Net income.................................................   $    9,119            11,182          6,098        9,207
                                                                   ==========         =========      =========    =========

<PAGE>

                                                                             First Bank                         FB&T
                                                                          Six Months Ended                Six Months Ended
                                                                              June 30,                        June 30,
                                                                     --------------------------        ----------------------
                                                                      2002                 2001         2002           2001
                                                                      ----                 ----         ----           ----
Income statement information:

Interest income.................................................   $  119,636           122,986         94,134      107,078
Interest expense................................................       44,015            61,297         26,428       43,052
                                                                   ----------         ---------      ---------    ---------
     Net interest income........................................       75,621            61,689         67,706       64,026
Provision for loan losses.......................................        9,500             6,200         15,500          910
                                                                   ----------         ---------      ---------    ---------
     Net interest income after provision for loan losses........       66,121            55,489         52,206       63,116
                                                                   ----------         ---------      ---------    ---------
Noninterest income..............................................       29,687            25,805         10,799       10,853
Noninterest expense.............................................       71,433            48,867         42,833       42,963
                                                                   ----------         ---------      ---------    ---------
     Income before provision for income taxes,
       minority interest in income of
       subsidiary and cumulative effect of change
       in accounting principle..................................       24,375            32,427         20,172       31,006
Provision for income taxes......................................        7,933            11,327          7,622       12,056
                                                                   ----------         ---------      ---------    ---------
     Income before minority interest in income of
       subsidiary and cumulative effect of change in
       accounting principle.....................................       16,442            21,100         12,550       18,950
Minority interest in income of subsidiary.......................           --                --             --           --
                                                                   ----------         ---------      ---------    ---------
     Income before cumulative effect of change in
       accounting principle.....................................       16,442            21,100         12,550       18,950
Cumulative effect of change in accounting principle,
       net of tax...............................................           --              (917)            --         (459)
                                                                   ----------         ---------      ---------    ---------
     Net income.................................................   $   16,422            20,183         12,550       18,491
                                                                   ==========         =========      =========    =========
---------------------------
(1)  Corporate and other includes $7.1 million and $4.5 million of guaranteed preferred debenture expense for the three months
     ended  June 30, 2002 and 2001, respectively. The  applicable  income tax benefit associated with the guaranteed preferred
     debentures expense was $2.5 million and $1.6 million for the three months ended June 30, 2002 and 2001, respectively. For
     the six months ended June 30, 2002 and 2001, respectively, corporate and other includes $13.3 million and $9.0 million of
     guaranteed  preferred  debenture  expense. The  applicable  income  tax  benefit associated with the guaranteed preferred
     debentures  expense  was  $4.7 million and $3.1 million for the six months ended June 30, 2002 and 2001, respectively. In
     addition, corporate and other includes holding company expenses.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                     Corporate, Other and
                              Intercompany Reclassifications (1)                        Consolidated Totals
                              ----------------------------------               ------------------------------------
                               June 30,           December 31,                    June 30,          December 31,
                                 2002                 2001                          2002                2001
                                 ----                 ----                          ----                ----
                                                       (dollars expressed in thousands)

<S>                             <C>                  <C>                         <C>                    <C>
                                22,851               17,496                      840,024                631,068
                                  (416)                (417)                   5,362,632              5,408,869
                                    --                   --                      140,774                125,440
                                20,527               13,450                    7,006,062              6,778,451
                               (19,331)             (14,168)                   5,908,395              5,683,904
                                10,000               27,500                       10,000                 27,500
                              (276,853)            (271,392)                     479,598                448,657
                             =========             ========                    =========              =========

                                  Corporate, Other and
                             Intercompany Reclassifications (1)                         Consolidated  Totals
                             ----------------------------------                ------------------------------------
                                   Three Months Ended                                   Three Months Ended
                                         June 30,                                             June 30,
                             ----------------------------------                ------------------------------------
                               2002                    2001                      2002                      2001
                               ----                    ----                      ----                      ----

                                   141                 (374)                     107,303                113,356
                                 7,263                4,428                       41,615                 55,261
                             ---------             --------                    ---------              ---------
                                (7,122)              (4,802)                      65,688                 58,095
                                    --                   --                       12,000                  3,720
                             ---------             --------                    ---------              ---------
                                (7,122)              (4,802)                      53,688                 54,375
                             ---------             --------                    ---------              ---------
                                  (550)                (292)                      20,529                 19,424
                                   635               13,177                       59,220                 59,909
                             ---------             --------                    ---------              ---------

                                (8,307)             (18,271)                      14,997                 13,890
                                (2,759)              (6,315)                       5,328                  5,457
                             ---------             --------                    ---------              ---------
                                (5,548)             (11,956)                       9,669                  8,433
                                   301                  534                          301                    534
                             ---------             --------                    ---------              ---------
                                (5,849)             (12,490)                       9,368                  7,899
                             =========             ========                    =========              =========

                                  Corporate, Other and
                             Intercompany Reclassifications (1)                         Consolidated  Totals
                             ----------------------------------                ------------------------------------
                                    Six Months Ended                                      Six Months Ended
                                        June 30,                                              June 30,
                             ----------------------------------                ------------------------------------
                               2002                    2001                       2002                     2001
                               ----                    ----                       ----                     ----

                                   145                 (671)                     213,915                229,393
                                13,662                9,541                       84,105                113,890
                             ---------             --------                    ---------              ---------
                               (13,517)             (10,212)                     129,810                115,503
                                    --                   --                       25,000                  7,110
                             ---------             --------                    ---------              ---------
                               (13,517)             (10,212)                     104,810                108,393
                             ---------             --------                    ---------              ---------
                                (1,122)                (760)                      39,364                 35,898
                                 1,812               15,208                      116,078                107,038
                             ---------             --------                    ---------              ---------


                               (16,451)             (26,180)                      28,096                 37,253
                                (5,456)              (8,802)                      10,099                 14,581
                             ---------             --------                    ---------              ---------


                               (10,995)             (17,378)                      17,997                 22,672
                                   629                1,045                          629                  1,045
                             ---------             --------                    ---------              ---------

                               (11,624)             (18,423)                      17,368                 21,627
                                    --                   --                           --                 (1,376)
                             ---------             --------                    ---------              ---------
                               (11,624)             (18,423)                      17,368                 20,251
                             =========             ========                    =========              =========
</TABLE>


<PAGE>





(9)      GUARANTEED PREFERRED BENEFICIAL INTERESTS IN SUBORDINATED DEBENTURES

         On April 10, 2002,  First Bank Capital  Trust  (FBCT),  a  newly-formed
Delaware  business  trust  subsidiary  of First Banks,  issued  25,000 shares of
variable rate  cumulative  trust  preferred  securities at $1,000 per share in a
private placement offering,  and issued 774 shares of common securities to First
Banks at $1,000 per share.  First  Banks  owns all of the common  securities  of
FBCT.  The gross  proceeds of the offering  were used by FBCT to purchase  $25.8
million of  variable  rate  junior  subordinated  debentures  from First  Banks,
maturing on April 22, 2032. The maturity date of the subordinated debentures may
be shortened to a date not earlier  than April 22, 2007,  if certain  conditions
are met. The  subordinated  debentures are the sole asset of FBCT. In connection
with the  issuance of the FBCT  preferred  securities,  First Banks made certain
guarantees  and  commitments  that,  in the  aggregate,  constitute  a full  and
unconditional guarantee by First Banks of the obligations of FBCT under the FBCT
preferred   securities.   First  Banks'   proceeds  from  the  issuance  of  the
subordinated  debentures to FBCT, net of offering expenses,  were $24.2 million,
and were used to reduce  indebtedness  currently  outstanding under First Banks'
revolving credit line with a group of unaffiliated  banks. The distribution rate
on the FBCT securities is equivalent to the six-month London Interbank  Offering
Rate plus 387.5 basis points,  and is payable  semi-annually in arrears on April
22 and  October  22,  beginning  on October 22,  2002.  Distributions  on FBCT's
preferred  securities  were $391,000 for the three and six months ended June 30,
2002.



<PAGE>



ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                                 OF OPERATIONS

         The  discussion  set forth in  Management's  Discussion and Analysis of
Financial Condition and Results of Operations  contains certain  forward-looking
statements  with respect to our financial  condition,  results of operations and
business.  These  forward-looking  statements  are subject to certain  risks and
uncertainties,  not all of which can be predicted or  anticipated.  Factors that
may cause actual results to differ  materially  from those  contemplated  by the
forward-looking   statements   herein  include  market  conditions  as  well  as
conditions  affecting  the  banking  industry  generally  and  factors  having a
specific  impact on us,  including but not limited to  fluctuations  in interest
rates and in the economy, including the negative impact on the economy resulting
from the events of September 11, 2001 in New York City and  Washington  D.C. and
the  national  response  to those  events;  the  impact of laws and  regulations
applicable to us and changes  therein;  the impact of accounting  pronouncements
applicable to us and changes therein;  competitive  conditions in the markets in
which  we  conduct  our  operations,  including  competition  from  banking  and
non-banking  companies  with  substantially  greater  resources than us, some of
which may offer and develop products and services not offered by us; our ability
to control the  composition of our loan portfolio  without  adversely  affecting
interest  income;  and our  ability to respond  to changes in  technology.  With
regard to our efforts to grow  through  acquisitions,  factors that could affect
the accuracy or  completeness of  forward-looking  statements  contained  herein
include the potential for higher than  anticipated  operating costs arising from
the geographic dispersion of our offices, as compared with competitors operating
solely in contiguous  markets;  the competition of larger acquirers with greater
resources than us,  fluctuations in the prices at which acquisition  targets may
be available  for sale and in the market for our  securities;  and the potential
for  difficulty or  unanticipated  costs in realizing the benefits of particular
acquisition  transactions.  Readers of our Form 10-Q should  therefore not place
undue reliance on forward-looking statements.

                                     General

         We are a registered bank holding  company  incorporated in Missouri and
headquartered  in St.  Louis  County,  Missouri.  Through the  operation  of our
subsidiaries,  we offer a broad array of  financial  services  to  consumer  and
commercial customers.  We currently operate banking subsidiaries with 154 branch
offices throughout California,  Illinois,  Missouri and Texas. At June 30, 2002,
we had total assets of $7.01 billion,  loans, net of unearned discount, of $5.36
billion,  total  deposits  of $5.91  billion and total  stockholders'  equity of
$479.6 million.

         Through our subsidiary  banks, we offer a broad range of commercial and
personal deposit  products,  including  demand,  savings,  money market and time
deposit  accounts.  In addition,  we market  combined basic services for various
customer groups,  including packaged accounts for more affluent  customers,  and
sweep accounts,  lock-box  deposits and cash management  products for commercial
customers.  We also offer both consumer and commercial  loans.  Consumer lending
includes   residential  real  estate,  home  equity  and  installment   lending.
Commercial lending includes  commercial,  financial and agricultural loans, real
estate  construction  and  development  loans,  commercial  real  estate  loans,
asset-based  loans,  commercial  leasing and trade  financing.  Other  financial
services   include   mortgage   banking,   debit  cards,   brokerage   services,
credit-related insurance, internet banking, automated teller machines, telephone
banking,  safe deposit boxes,  escrow and  bankruptcy  deposit  services,  stock
option services and trust,  private banking and  institutional  money management
services.

         We operate  through  two  subsidiary  banks and three  subsidiary  bank
holding companies as follows:

         Union Financial Group, Ltd., or UFG, headquartered in Swansea,
           Illinois, and its wholly owned subsidiary:
              First Bank, headquartered in St. Louis County, Missouri;
         First Banks America, Inc., or FBA, headquartered in San Francisco,
           California and its wholly owned subsidiary:
              The San Francisco Company, or SFC, headquartered in San Francisco,
                 California, and its wholly owned subsidiary:
                    First Bank & Trust, or FB&T, headquartered in San Francisco,
                       California.

         Our  subsidiary  banks  are  wholly  owned by their  respective  parent
companies.  We owned  93.76% and 93.69% of FBA at June 30, 2002 and December 31,
2001, respectively.
<PAGE>

         Primary  responsibility for managing our subsidiary banking units rests
with the  officers  and  directors  of each unit.  However,  in keeping with our
policy, we centralize overall corporate policies,  procedures and administrative
functions and provide operational  support functions for our subsidiaries.  This
practice allows us to achieve various operating  efficiencies while allowing our
subsidiary banking units to focus on customer service.

                               Financial Condition

         Our total assets were $7.01  billion and $6.78 billion at June 30, 2002
and December 31, 2001,  respectively.  The increase in total assets is primarily
attributable  to our  acquisition of Plains  Financial  Corporation,  or PFC, in
January  2002,  which  provided  total  assets of $256.3  million as well as our
acquisition  of the Denton and Garland,  Texas branch  offices of Union Planters
Bank, National  Association,  or UPB, completed on June 22, 2002, which provided
assets  of  approximately  $63.7  million.  The  increase  in total  assets  was
partially  offset by lower loan  demand and an  anticipated  level of  attrition
associated  with our  acquisitions of Charter Pacific Bank, BYL Bancorp and UFG,
completed  during the fourth  quarter of 2001,  and of PFC.  Federal  funds sold
increased by $57.2 million due to the investment of excess funds  resulting from
reduced loan demand primarily due to economic conditions.  Investment securities
increased  $208.9 million to $840.0 million at June 30, 2002 from $631.1 million
at December  31,  2001.  We  attribute  the  increase in  investment  securities
primarily to the purchase of available-for-sale  investment securities of $517.0
million as well as the $81.0 million of investments acquired in conjunction with
our  acquisition of PFC, offset by maturities of  available-for-sale  investment
securities of $398.6 million. Derivative instruments increased $15.2 million due
to  the  purchase  of two  interest  rate  swap  agreements  in  June  2002  and
mark-to-market  adjustments  required  under  Statement of Financial  Accounting
Standards,  or SFAS, No. 133, Accounting for Derivative  Instruments and Hedging
Activities,  which was implemented in January 2001. See further discussion under
"--Interest Rate Risk Management." In addition,  intangibles associated with the
purchase of subsidiaries  increased  $15.3 million,  which reflects core deposit
intangibles and goodwill  associated with our acquisition of PFC as well as core
deposit  intangibles  associated  with our  branch  purchases  of UPB as further
discussed  in  Note 2 to the  consolidated  financial  statements.  The  overall
increase in assets was partially  offset by a decrease in loans, net of unearned
discount,  of $46.2  million,  which is further  discussed  under  "--Loans  and
Allowance for Loan Losses." Total deposits  increased by $224.5 million to $5.91
billion at June 30, 2002 from $5.68  billion at December 31, 2001.  The increase
reflects  deposits of $213.4 million  acquired in our PFC  acquisition and $64.9
million  acquired  in our branch  purchases  offset by an  anticipated  level of
attrition associated with our acquisitions and continued aggressive  competition
within our  market  areas.  In  addition,  certain  large  commercial  accounts,
particularly  related to real estate title and escrow business,  sharply reduced
their  deposit  levels,  reflecting  reduced  business  activity  as a result of
general economic  conditions.  Short-term  borrowings decreased $44.2 million to
$198.9  million at June 30,  2002 from  $243.1  million at  December  31,  2001,
primarily  due to a  reduction  in federal  funds  purchased.  Our note  payable
decreased by $17.5  million to $10.0 million at June 30, 2002 from $27.5 million
at  December  31,  2001 due to $54.0  million  in  repayments  offset by a $36.5
million advance  utilized to fund our acquisition of PFC.  Guaranteed  preferred
beneficial  interests in  subordinated  debentures  increased  $28.1 million due
primarily  to the  issuance  of $25.0  million  of  additional  trust  preferred
securities  as more  fully  described  in Note 9 to the  consolidated  financial
statements.  Furthermore,  accrued expenses and other liabilities decreased $8.8
million to $52.7  million at June 30, 2002 from $61.5  million at  December  31,
2001. We attribute this decrease primarily to the timing of certain payments.

                              Results of Operations

Net Income

         Net income was $9.4  million  and $17.4  million  for the three and six
months  ended June 30,  2002,  respectively,  compared to $7.9 million and $20.3
million for the comparable  periods in 2001.  Results for 2002 reflect increased
net interest income and noninterest income,  offset by increased  provisions for
loan  losses,  reflecting  the  effects  of the  current  economic  environment,
increased charge-off,  delinquency and higher-than-normal  nonperforming trends,
and higher operating expenses.  The implementation of SFAS No. 142, Goodwill and
Other Intangible Assets, on January 1, 2002,  resulted in the discontinuation of
the  amortization  of  certain  intangibles  associated  with  the  purchase  of
subsidiaries.  As more fully described in Note 3 to the  consolidated  financial
statements,  if we had  implemented  SFAS No. 142 at the beginning of 2001,  net
income for the three and six months  ended  June 30,  2001 would have  increased
$1.8 million and $3.6 million,  respectively. In addition, the implementation of
SFAS No. 133, on January 1, 2001,  resulted in the  recognition  of a cumulative
effect of change in  accounting  principle of $1.4  million,  net of tax,  which

<PAGE>

reduced  net income in 2001.  Excluding  this item,  net income  would have been
$21.6  million  for the six  months  ended June 30,  2001.  The  accounting  for
derivatives  under the  requirements  of SFAS No. 133 will  continue  to have an
impact  on  future  financial  results  as  further  discussed  above  and under
"--Noninterest Income."

         The decline in earnings  primarily  reflects higher operating  expenses
and  increased   provisions  for  loan  losses  associated  with  the  increased
charge-off, delinquency and nonperforming trends we are experiencing as a result
of current economic  conditions.  The overall increase in operating expenses for
2002, as further discussed under  "--Noninterest  Expense," was partially offset
by the  discontinuation  of the amortization of certain  intangibles  associated
with the purchase of subsidiaries in accordance with the  implementation of SFAS
No. 142. Amortization of intangibles for the three and six months ended June 30,
2002 was $482,000 and $964,000, respectively,  compared to $1.9 million and $3.7
million for the comparable  periods in 2001. The higher  operating  expenses and
increased  provisions  for loan losses were  partially  offset by increased  net
interest  income  and  noninterest  income as  further  discussed  under  "--Net
Interest Income" and "--Noninterest Income."

Net Interest Income

         Net interest income  (expressed on a tax equivalent basis) increased to
$66.1 million, or 4.24% of  interest-earning  assets, for the three months ended
June 30, 2002, from $58.3 million, or 4.37% of interest-earning  assets, for the
comparable  period in 2001. For the six months ended June 30, 2002 and 2001, net
interest income  (expressed on a tax equivalent  basis) was $130.5  million,  or
4.22%  of   interest-earning   assets,   and   $115.9   million,   or  4.39%  of
interest-earning  assets,  respectively.  We credit the  increased  net interest
income primarily to the net interest-earning assets provided by our acquisitions
completed  during the fourth quarter of 2001 and in January 2002,  internal loan
growth and earnings on our interest rate swap agreements that we entered into in
conjunction with our interest rate risk management program. As further discussed
under "--Interest Rate Risk Management," for the three and six months ended June
30, 2002,  these  agreements  provided net interest  income of $12.6 million and
$23.8 million,  respectively, in comparison to $4.7 million and $5.7 million for
the comparable  periods in 2001. The increase in net interest  income,  however,
was partially  offset by reductions  in prevailing  interest  rates during 2001,
generally weaker loan demand and overall economic  conditions,  resulting in the
decline in our net interest margin.  Guaranteed preferred debentures expense was
$7.1 million and $13.3 million for the three and six months ended June 30, 2002,
respectively,  compared  to $4.5  million and $9.0  million  for the  comparable
periods in 2001. The increase for 2002 is primarily attributable to the issuance
of trust preferred securities by our financing  subsidiaries.  In November 2001,
First  Preferred  Capital  Trust III issued  $55.2  million  of trust  preferred
securities  and in April 2002,  First Bank Capital Trust issued $25.8 million of
trust  preferred  securities.  The increase  also  reflects a change in estimate
regarding the  amortization  period over which the deferred  issuance  costs are
being amortized.

         Average loans, net of unearned  discount,  were $5.39 billion and $5.44
billion  for the three and six months  ended  June 30,  2002,  respectively,  in
comparison  to $4.88  billion and $4.84  billion for the  comparable  periods in
2001. The yield on our loan portfolio, however, decreased to 7.36% and 7.34% for
the three and six months ended June 30, 2002,  respectively,  in  comparison  to
8.70% and 8.88% for the comparable periods in 2001. This was a major contributor
to the decline in our net interest margin of 13 basis points and 17 basis points
for the  three  and six  months  ended  June 30,  2002,  respectively,  from the
comparable  periods  in 2001.  We  attribute  the  decline in yields and our net
interest  margin  primarily  to  the  decreases  in  prevailing  interest  rates
throughout  2001.  During the period from January 1, 2001  through  December 31,
2001,  the Board of  Governors  of the  Federal  Reserve  System  decreased  the
targeted  Federal  funds rate 11 times,  resulting  in 11 decreases in the prime
rate of interest from 9.50% to 4.75%.  This is reflected not only in the rate of
interest  earned on loans that are indexed to the prime rate,  but also in other
assets and liabilities  which either have variable or adjustable rates, or which
matured or repriced during this period. As discussed above, the reduced level of
interest  income earned on our loan portfolio as a result of declining  interest
rates and increased  competition within our market areas was partially mitigated
by the earnings associated with our interest rate swap agreements.

         For the  three  and six  months  ended  June 30,  2002,  the  aggregate
weighted  average  rate paid on our  deposit  portfolio  decreased  to 2.71% and
2.80%,  respectively,  compared to 4.56% and 4.73% for the comparable periods in
2001.  We  attribute  the  decline  primarily  to rates paid on savings and time
deposits,  which have continued to decline in conjunction with the interest rate
reductions  previously  discussed.  The decrease in rates paid for the three and
six months  ended June 30,  2002 is a result of  generally  decreasing  interest
rates during 2001.  However,  the  competitive  pressures on deposits within our
market  areas  precluded  us from fully  reflecting  the general  interest  rate
decreases in our deposit pricing and still providing an adequate  funding source
for loans.
<PAGE>

         The aggregate  weighted average rate paid on our note payable decreased
to  3.65%  and  3.24%  for the  three  and  six  months  ended  June  30,  2002,
respectively,  compared to 5.93% and 6.78% for the  comparable  periods in 2001,
which is reflective of the current rate environment.  Amounts  outstanding under
our  $120.0  million  line of  credit  with a group  of  unaffiliated  financial
institutions  bear  interest at the lead bank's  corporate  base rate or, at our
option,  at the  Eurodollar  rate plus a margin  determined  by the  outstanding
balance and our  profitability.  Thus,  our revolving  credit line  represents a
relatively  high-cost  funding  source as increased  advances have the effect of
increasing  the weighted  average rate of non-deposit  liabilities.  The overall
cost of this funding source,  however,  has been significantly  mitigated by the
reductions in the prime lending rate during 2001 and in the outstanding  balance
of the note payable in 2002. During 2001, our note payable was fully repaid from
the proceeds of the trust preferred securities issued by First Preferred Capital
Trust III. However, on December 31, 2001, we obtained a $27.5 million advance to
fund our acquisition of UFG and in January 2002, we utilized the note payable to
fund our  acquisition  of PFC. The aggregate  weighted  average rate paid on our
short-term  borrowings also declined for the three and six months ended June 30,
2002, as compared to the comparable  periods in 2001,  reflecting  reductions in
the current interest rate environment.

         The aggregate  weighted  average rate paid on our guaranteed  preferred
debentures  increased  to 11.01% and  10.85% for the three and six months  ended
June 30, 2002, respectively,  from 9.85% and 9.90% for the comparable periods in
2001. The increase is due to the change in estimate  regarding the  amortization
period over which the deferred  issuance costs associated with these obligations
are being amortized.


<PAGE>
         The following  table sets forth,  on a  tax-equivalent  basis,  certain
information  relating to our average  balance  sheets,  and reflects the average
yield earned on  interest-earning  assets, the average cost of  interest-bearing
liabilities and the resulting net interest income for the periods indicated.
<TABLE>
<CAPTION>

                                               Three Months Ended June 30,                        Six Months Ended June 30,
                                 -------------------------------------------------   ----------------------------------------------
                                             2002                     2001                      2002                    2001
                                 -------------------------  ----------------------  ----------------------  -----------------------
                                            Interest                Interest                Interest                 Interest
                                   Average  Income/ Yield/  Average Income/ Yield/  Average Income/ Yield/  Average  Income/ Yield/
                                   Balance  Expense Rate    Balance Expense Rate    Balance Expense Rate    Balance  Expense Rate
                                   -------  ------- ----    ------- ------- ----    ------- ------- ----    -------  ------- ------
                                                                         (dollars expressed in thousands)
             Assets
             ------

Interest-earning assets:
<S>                            <C>         <C>     <C>   <C>        <c>     <c>   <C>        <c>      <C>   <C>        <c>    <C>
   Loans (1)(2)(3)(4)......... $5,391,165  98,916  7.36% $4,883,268 105,923 8.70% $5,443,106 198,038  7.34% $4,840,188 213,061 8.88%
   Investment securities (4)..    701,470   8,127  4.65     388,456   6,466 6.68     679,733  15,644  4.64     428,817  15,072 7.09
   Federal funds sold
     and other................    156,675     653  1.67      82,631   1,160 5.63     115,364     942  1.65      57,511   1,655 5.80
                               ---------- -------        ---------- -------       ---------- -------        ---------- -------
        Total interest-
          earning assets......  6,249,310 107,696  6.91   5,354,355 113,549 8.51   6,238,203 214,624  6.94   5,326,516 229,788 8.70
                                          -------                   -------                  -------                   -------
Nonearning assets.............    663,241                   534,143                  667,649                   517,548
                               ----------                ----------               ----------                ----------
        Total assets.......... $6,912,551                $5,888,498               $6,905,852                $5,844,064
                               ==========                ==========               ==========                ==========
       Liabilities  and
     Stockholders' Equity
     --------------------

Interest-bearing liabilities:
   Interest-bearing deposits:
     Interest-bearing demand
       deposits............... $  731,513   2,281  1.25% $  478,771   1,807 1.51% $  695,901   3,953  1.15%  $ 466,634   3,480 1.50%
     Savings deposits.........  1,928,691   9,265  1.93   1,479,117  13,342 3.62   1,921,210  18,434  1.93   1,452,496  27,525 3.82
     Time deposits of $100
       or more (3)............    497,267   4,889  3.94     534,970   7,453 5.59     501,252  10,179  4.10     527,164  15,329 5.86
     Other time deposits (3)..  1,794,830  16,970  3.79   1,778,304  25,954 5.85   1,812,161  35,851  3.99   1,795,382  53,143 5.97
                               ---------- -------        ---------- -------       ---------- -------         --------- -------
        Total interest-
          bearing deposits....  4,952,301  33,405  2.71   4,271,162  48,556 4.56   4,930,524  68,417  2.80   4,241,676  99,477 4.73
   Short-term borrowings......    191,568     912  1.91     174,667   1,673 3.84     183,718   1,829  2.01     166,720   3,662 4.43
   Notes payable..............     19,911     181  3.65      36,700     543 5.93      32,987     530  3.24      52,753   1,773 6.78
   Guaranteed preferred
       debentures(3)..........    259,233   7,117 11.01     182,860   4,489 9.85     247,657  13,329 10.85     182,829   8,978 9.90
                               ---------- -------        ---------- -------       ---------- -------         --------- -------
        Total interest-
          bearing
            liabilities.......  5,423,013  41,615  3.08   4,665,389  55,261 4.75   5,394,886  84,105  3.14   4,643,978 113,890 4.95
                                          -------                   -------                  -------                   -------
Noninterest-bearing
  liabilities:
   Demand deposits............    898,862                   718,259                  918,829                   714,891
   Other liabilities..........    130,394                   107,660                  136,610                   106,335
                               ----------                 ---------                ---------                 ---------
        Total liabilities.....  6,452,269                 5,491,308                6,450,325                 5,465,204
Stockholders' equity..........    460,282                   397,190                  455,527                   378,860
                               -----------               ----------                ---------                 ---------
        Total liabilities
           and stockholders'
           equity............. $6,912,551                $5,888,498               $6,905,852                $5,844,064
                               ==========                ==========               ==========                ==========

Net interest income...........             66,081                    58,288                  130,519                   115,898
                                          =======                   =======                  =======                   =======
Interest rate spread..........                     3.83                     3.76                      3.80                     3.75
Net interest margin (5).......                     4.24%                    4.37%                     4.22%                    4.39%
                                                  =====                     ====                     =====                     ====
--------------------
(1)  For purposes of these computations, nonaccrual loans are included in the average loan amounts.
(2)  Interest income on loans includes loan fees.
(3)  Interest income and interest expense include the effects of interest rate swap agreements.
(4)  Information is presented on a tax-equivalent basis assuming a tax rate of 35%.  The tax-equivalent adjustments were
     approximately $393,000 and $709,000 for the three and six months ended June 30, 2002, and $193,000 and $395,000 for
     the comparable periods in 2001, respectively.
(5)  Net interest margin is the ratio of net interest income (expressed on a  tax-equivalent basis) to average interest-
     earning assets.
</TABLE>




<PAGE>


Provision for Loan Losses

         The provision for loan losses was $12.0 million and $25.0 for the three
and six months  ended June 30,  2002,  compared to $3.7 million and $7.1 million
for the comparable periods in 2001, respectively.  The provision for loan losses
reflects  the level of loan  charge-offs  and  recoveries,  the  adequacy of the
allowance  for loan  losses and the  effect of  economic  conditions  within our
markets. We attribute the increase in the provision for loan losses primarily to
the overall growth in our loan portfolio,  principally through  acquisitions,  a
general increase in risk associated with the continued  changing  composition of
our loan portfolio and a significant  increase in net loan  charge-offs and past
due loans,  largely resulting from the slowdown in economic conditions prevalent
within our markets. Net loan charge-offs were $7.9 million and $19.7 million for
the three and six months ended June 30, 2002,  respectively,  in  comparison  to
$4.6 million and $11.6 million for the comparable  periods in 2001. The increase
in  net  charge-offs  reflects  the  general  slowdown  in  economic  conditions
prevalent  within our markets as well as an aggregate  of $12.9  million of loan
charge-offs on four large credit relationships during 2002. Loan recoveries were
$3.7  million  and  $8.3 for the  three  and six  months  ended  June 30,  2002,
respectively,  in comparison to $1.9 million and $3.8 million for the comparable
periods in 2001. Although  nonperforming assets and past due loans have declined
to $85.2 million at June 30, 2002 from $86.8  million at December 31, 2001,  our
overall  nonperforming  and past due  trends  remain at higher  than  historical
levels and are expected to remain at these  levels in the near future.  However,
we believe these trends represent normal cyclical trends  experienced within the
banking industry during times of economic slowdown.  Management considered these
trends in its  overall  assessment  of the  adequacy of the  allowance  for loan
losses.

         Tables summarizing  nonperforming assets, past due loans and charge-off
and recovery  experience  are  presented  under  "--Loans and Allowance for Loan
Losses."

Noninterest Income

         Noninterest  income was $20.5  million and $39.4  million for the three
and six months ended June 30, 2002, respectively, in comparison to $19.4 million
and  $35.9  million  for the  comparable  periods  in 2001.  Noninterest  income
consists  primarily of service charges on deposit  accounts and customer service
fees, mortgage-banking revenues, a gain on the sale of our credit card portfolio
in 2001,  bank-owned life insurance  investment  income,  net gains or losses on
derivative instruments and other income.

         Service charges on deposit accounts and customer service fees were $7.0
million  and $13.5  million  for the three and six months  ended June 30,  2002,
respectively, in comparison to $5.3 million and $10.5 million for the comparable
periods in 2001.  We  attribute  the  increase in service  charges and  customer
service fees to:

          >>   increased deposit balances provided by internal growth;

          >>   our  acquisitions  completed during 2001 and, to a lesser degree,
               2002;

          >>   additional  products and services  available  and utilized by our
               expanding base of consumer and commercial customers;

          >>   increased fee income resulting from revisions of customer service
               charge rates, effective July 1, 2001, and enhanced control
              of fee waivers; and

          >>   increased   income   associated  with  automated  teller  machine
               services and debit cards.

         The gain on mortgage  loans sold and held for sale was $7.3 million and
$12.5 million for the three and six months ended June 30, 2002, respectively, in
comparison to $3.9 million and $7.3 million for the comparable  periods in 2001.
The overall increase is primarily  attributable to a significant increase in the
volume of loans originated and sold commensurate with the reductions in mortgage
loan  rates  experienced  in  2001 as well  as the  continued  expansion  of our
mortgage banking activities into new and existing markets.

         During the six months ended June 30,  2001,  we recorded a $2.3 million
pre-tax  gain  on the  sale  of our  credit  card  portfolio.  The  sale of this
portfolio was consistent  with our strategic  decision to exit this product line
and enter into an agent relationship with a larger credit card service provider.

         Bank-owned life insurance  investment  income was $1.5 million and $2.8
million  for the three and six months  ended  June 30,  2002,  respectively,  in
comparison to $1.0 million and $2.1 million for the comparable  periods in 2001.
The increase for 2002 reflects  changes in the  portfolio mix of the  underlying
investments  made by management to improve our return on this product as well as
the reinvestment of earnings.
<PAGE>

         The net gain on derivative instruments was $90,000 for the three months
ended June 30, 2002 and the net loss on derivative  instruments was $249,000 for
the six months ended June 30, 2002,  in  comparison to net gains of $5.0 million
and $5.5 million for the comparable periods in 2001, respectively.  The decrease
in income from derivative  instruments  reflects $3.8 million of gains resulting
from the termination of certain interest rate swap agreements  during the second
quarter of 2001, the sale of the interest rate floor agreements in November 2001
and changes in the fair value of our interest rate cap agreements and fair value
hedges.

         Other income was $4.6  million and $10.8  million for the three and six
months ended June 30, 2002, respectively, in comparison to $4.2 million and $8.3
million for the comparable  periods in 2001. We attribute the primary components
of the increase to:

          >>   our  acquisitions  completed during 2001 and, to a lesser extent,
               2002;

          >>   increased   portfolio   management  fee  income   associated  our
               Institutional Money Management division;

          >>   increased  rental income  associated with our commercial  leasing
               activities; and

          >>   a gain of  approximately  $448,000  in March  2002 on the sale of
               certain  operating  lease  equipment  associated  with  equipment
               leasing  activities  that we  acquired  in  conjunction  with our
               acquisition of Bank of San Francisco in December 2000; offset by

          >>   the  write-down of  approximately  $943,000 on certain  equipment
               associated with our commercial leasing operation in June 2002.

Noninterest Expense

         Noninterest  expense was $59.2 million and $116.1 million for the three
and six months ended June 30, 2002, respectively, in comparison to $59.9 million
and $107.0 million for the comparable  periods in 2001. The increase for the six
months ended June 30, 2002 reflects the noninterest  expense of our acquisitions
completed  during  2001  and,  to  a  lesser  extent,  2002,  including  certain
nonrecurring  expenses  associated with those  acquisitions as well as increased
salaries and employee  benefit  expenses,  furniture and equipment  expenses and
information  technology fees, offset by a decline in amortization of intangibles
associated with the purchase of subsidiaries and other expense.

         Salaries and employee benefits were $28.9 million and $56.2 million for
the three and six months ended June 30, 2002,  respectively,  in  comparison  to
$23.3 million and $45.8 million for the comparable periods in 2001. We primarily
associate  the  increase  with  our  2001  and  2002   acquisitions  and  higher
commissions paid to mortgage loan originators due to increased volume.  However,
the increase also reflects higher salary and employee  benefit costs  associated
with  employing and retaining  qualified  personnel.  In addition,  the increase
includes various additions to staff throughout 2001 to enhance senior management
expertise and expand our product lines.

         Occupancy,  net of rental income,  and furniture and equipment  expense
totaled $9.4  million and $18.2  million for the three and six months ended June
30, 2002, respectively,  in comparison to $6.5 million and $13.8 million for the
comparable  periods  in  2001.  We  primarily  attribute  the  increase  to  our
aforementioned acquisitions,  the relocation of certain branches and operational
areas,   increased   depreciation   expense  associated  with  numerous  capital
expenditures and the continued expansion and renovation of various corporate and
branch offices,  including our facility that houses our  centralized  operations
and certain corporate administrative functions.

         Information technology fees were $8.5 million and $16.6 million for the
three and six months ended June 30, 2002,  respectively,  in  comparison to $6.5
million and $13.0  million  for the  comparable  periods in 2001.  As more fully
described in Note 6 to our consolidated  financial  statements,  First Services,
L.P.  provides  information  technology and operational  support services to our
subsidiaries and us. We attribute the increased fees to growth and technological
advancements  consistent  with our  product  and  service  offerings,  continued
expansion and upgrades to technological  equipment,  networks and  communication
channels and certain  nonrecurring  expenses associated with the data processing
conversions of UFG and PFC, completed in the first quarter of 2002.

         Legal,  examination  and  professional  fees were $2.1 million and $3.6
million  for the three and six months  ended  June 30,  2002,  respectively,  in
comparison to $1.7 million and $3.4 million for the comparable  periods in 2001.

<PAGE>

We primarily  attribute the increase in these fees to the continued expansion of
overall  corporate  activities,  the ongoing  professional  services utilized by
certain of our  acquired  entities  and  increased  legal fees  associated  with
commercial loan documentation, collection efforts, expanded corporate activities
and certain defense litigation particularly related to acquisitions.

         Amortization   of   intangibles   associated   with  the   purchase  of
subsidiaries  was  $482,000 and $964,000 for the three and six months ended June
30, 2002,  respectively,  in comparison to $1.9 million and $3.7 million for the
comparable  periods  in  2001.  As  more  fully  discussed  in  Note  3  to  our
consolidated  financial  statements,   the  significant  decrease  for  2002  is
attributable to the implementation of SFAS No. 142 in January 2002.

         Other  expense was $6.1 million and $13.1 million for the three and six
months ended June 30, 2002,  respectively,  in  comparison  to $16.6 million and
$20.4 million for the  comparable  periods in 2001.  Other  expense  encompasses
numerous  general  and  administrative  expenses  including  travel,  meals  and
entertainment,  insurance,  freight and  courier  services,  correspondent  bank
charges,   advertising  and  business  development,   miscellaneous  losses  and
recoveries, memberships and subscriptions,  transfer agent fees and sales taxes.
We attribute  the majority of the decrease in other  expense to a $11.5  million
nonrecurring litigation settlement charge in June 2001 associated with a lawsuit
brought by an  unaffiliated  bank  against one of our  subsidiaries  and certain
individuals related to allegations arising from the employment by our subsidiary
of individuals previously employed by the plaintiff bank, as well as the conduct
of those  individuals  while  employed by the plaintiff  bank.  The decrease was
offset by expenses  associated with our acquisitions  completed during 2001 and,
to a lesser extent,  2002, and the overall continued growth and expansion of our
banking franchise.

Provision for Income Taxes

         The  provision  for income taxes was $5.3 million and $10.1 million for
the three and six months ended June 30, 2002,  representing an effective  income
tax rate of 35.5% and 35.9%,  respectively,  in  comparison  to $5.5 million and
$14.6 million,  representing an effective income tax rate of 39.3% and 39.1% for
the  comparable  periods in 2001,  respectively.  The decrease in the  effective
income tax rate for 2002 reflects the  significant  decline in  amortization  of
intangibles associated with the purchase of subsidiaries, in accordance with the
requirements of SFAS No. 142, which is not deductible for tax purposes.

                          Interest Rate Risk Management

         We utilize derivative financial instruments to assist in our management
of interest rate  sensitivity  by modifying the  repricing,  maturity and option
characteristics of certain assets and liabilities. The derivative instruments we
hold are summarized as follows:
<TABLE>
<CAPTION>
                                                                      June 30, 2002             December 31, 2001
                                                                -----------------------      ----------------------
                                                                 Notional       Credit       Notional       Credit
                                                                  Amount       Exposure       Amount       Exposure
                                                                  ------       --------       ------       --------
                                                                            (dollars expressed in thousands)

<S>                                                             <C>              <C>          <C>             <C>
         Cash flow hedges.....................................  $1,050,000       1,942        900,000         1,764
         Fair value hedges....................................     387,450       8,751        200,000         6,962
         Interest rate cap agreements.........................     450,000         559        450,000         2,063
         Interest rate lock commitments.......................      38,000          --         88,000            --
         Forward commitments to sell
           mortgage-backed securities.........................     109,000          --        209,000            --
                                                                ==========       =====        =======         =====
</TABLE>

         The  notional  amounts  of  derivative  financial  instruments  do  not
represent amounts exchanged by the parties and, therefore,  are not a measure of
our credit exposure  through our use of these  instruments.  The credit exposure
represents  the accounting  loss we would incur in the event the  counterparties
failed completely to perform according to the terms of the derivative  financial
instruments  and the  collateral  held to support the credit  exposure was of no
value.

         During the three and six months ended June 30,  2002,  the net interest
income  realized on our derivative  financial  instruments was $12.6 million and
$23.8 million,  respectively, in comparison to $4.7 million and $5.7 million for
the  comparable  periods  in  2001.  In  addition,  we  realized  a net  gain on
derivative instruments,  which is included in noninterest income, of $90,000 and
$5.0 million for the three months ended June 30, 2002 and 2001, respectively, in
comparison  to a net loss of $249,000 and a net gain of $5.5 million for the six
months  ended June 30, 2002 and 2001,  respectively.  The net decrease in income
from 2001  reflects  $3.8 million of gains  resulting  from the  termination  of
certain  interest rate swap  agreements  during the second  quarter of 2001, the
sale of the interest  rate floor  agreements in November 2001 and changes in the
fair value of our interest rate cap agreements and fair value hedges.
<PAGE>

Cash Flow Hedges

         During  September  2000,  March  2001,  April 2001 and March  2002,  we
entered into $600.0 million,  $200.0 million,  $175.0 million and $150.0 million
notional amount,  respectively,  of interest rate swap agreements to effectively
lengthen the repricing  characteristics  of certain  interest-earning  assets to
correspond  more  closely  with  their  funding  source  with the  objective  of
stabilizing cash flow, and accordingly,  net interest income over time. The swap
agreements,  which have been  designated as cash flow hedges,  provide for us to
receive  a  fixed  rate  of  interest  and pay an  adjustable  rate of  interest
equivalent to the weighted average prime lending rate minus 2.70%,  2.82%, 2.82%
and 2.80%, respectively.  The terms of the swap agreements provide for us to pay
and receive interest on a quarterly basis. In November 2001, we terminated $75.0
million notional amount of the swap agreements  originally entered into in April
2001, which would have expired in April 2006, in order to  appropriately  modify
our overall hedge position in accordance  with our interest rate risk management
program.  We recorded a pre-tax  gain of $2.6  million in  conjunction  with the
termination of these swap agreements. The amount receivable by us under the swap
agreements  was $3.0  million and $2.9 million at June 30, 2002 and December 31,
2001,  respectively,  and the amount  payable by us was $1.1 million at June 30,
2002 and December 31, 2001.

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of our  interest  rate swap  agreements  designated  as cash flow
hedges as of June 30, 2002 and December 31, 2001 were as follows:
<TABLE>
<CAPTION>

                                                                Notional   Interest Rate   Interest Rate    Fair
                          Maturity Date                          Amount        Paid          Received      Value
                          -------------                           -----        ----          --------      -----
                                                                         (dollars expressed in thousands)

         June 30, 2002:
<S>                                                            <C>               <C>           <C>       <C>
             March 14, 2004..................................  $  150,000        1.95%         3.93%     $   2,410
             September 20, 2004..............................     600,000        2.05          6.78         43,500
             March 21, 2005..................................     200,000        1.93          5.24          8,085
             April 2, 2006...................................     100,000        1.93          5.45          4,482
                                                               ----------                                ---------
                                                               $1,050,000        2.00          5.95      $  58,477
                                                               ==========       =====         =====      =========

         December 31, 2001:
             September 20, 2004..............................  $  600,000        2.05%         6.78%     $  40,980
             March 21, 2005..................................     200,000        1.93          5.24          4,951
             April 2, 2006...................................     100,000        1.93          5.45          2,305
                                                               ----------                                ---------
                                                               $  900,000        2.01          6.29      $  48,236
                                                               ==========       =====         =====      =========
</TABLE>

     Fair Value Hedges

         We entered into the following interest rate swap agreements, designated
as fair value hedges, to effectively  shorten the repricing  characteristics  of
certain  interest-bearing  liabilities  to  correspond  more  closely with their
funding source with the objective of stabilizing net interest income over time:

         >>   During  January  2001,  we  entered  into $50.0  million  notional
               amount of  three-year  interest rate swap  agreements  and $150.0
               million   notional   amount  of  five-year   interest  rate  swap
               agreements  that  provide  for us to  receive  a  fixed  rate  of
               interest and pay an adjustable rate of interest equivalent to the
               three-month London Interbank Offering Rate. The terms of the swap
               agreements  provide for us to pay  interest on a quarterly  basis
               and receive interest on a semiannual basis. The amount receivable
               by us under the swap agreements was $4.4 million and $5.2 million
               at June 30, 2002 and  December 31,  2001,  respectively,  and the
               amount  payable by us under the swap  agreements was $927,000 and
               $1.2   million  at  June  30,  2002  and   December   31,   2001,
               respectively.
<PAGE>

         >>   During May 2002 and June 2002,  we entered  into $55.2 million and
               $86.3 million  notional  amount,  respectively,  of interest rate
               swap  agreements  that  provide for us to receive a fixed rate of
               interest and pay an adjustable rate of interest equivalent to the
               three-month  London Interbank Offering Rate plus 2.30% and 2.75%,
               respectively.  In  addition,  during June 2002,  FBA entered into
               $46.0 million  notional  amount of interest rate swap  agreements
               that  provide for us to receive a fixed rate of interest  and pay
               an  adjustable  rate of interest  equivalent  to the  three-month
               London Interbank  Offering Rate plus 1.97%. The underlying hedged
               liabilities are our guaranteed  preferred beneficial interests in
               First  Banks,  Inc.  subordinated   debentures  and  First  Banks
               America,  Inc.  subordinated  debentures.  The  terms of the swap
               agreements  provide  for  us to pay  and  receive  interest  on a
               quarterly  basis.  The amount  receivable and payable by us under
               the swap agreements was $593,400 and $291,000,  respectively,  at
               June 30, 2002.

         The maturity dates, notional amounts,  interest rates paid and received
and fair value of our interest  rate swap  agreements  designated  as fair value
hedges as of June 30, 2002 and December 31, 2001 were as follows:
<TABLE>
<CAPTION>

                                                                 Notional   Interest Rate  Interest Rate    Fair
                          Maturity Date                           Amount        Paid         Received       Value
                          -------------                           ------        ----         --------       -----
                                                                         (dollars expressed in thousands)

         June 30, 2002:
<S>                                                            <C>               <C>           <C>        <C>
             January 9, 2004.................................  $   50,000        2.01%         5.37%      $  1,939
             January 9, 2006.................................     150,000        2.01          5.50          7,089
             March 31, 2027..................................      86,250        4.61          9.25            285
             June 30, 2028...................................      46,000        3.83          8.50            239
             December 31, 2031...............................      55,200        4.22          9.00          1,351
                                                               ----------                                 --------
                                                               $  387,450        3.12          7.17       $ 10,903
                                                               ==========       =====         =====       ========

         December 31, 2001:
             January 9, 2004.................................  $   50,000        2.48%         5.37%      $  1,761
             January 9, 2006.................................     150,000        2.48          5.50          3,876
                                                               ----------                                 --------
                                                               $  200,000        2.48          5.47       $  5,637
                                                               ==========       =====         =====       ========
</TABLE>
<PAGE>

    Interest Rate Cap Agreements

         In conjunction  with the interest rate swap  agreements that we entered
into in September  2000, we also entered into $450.0 million  notional amount of
four-year  interest  rate cap  agreements  to  limit  the net  interest  expense
associated  with our interest rate swap agreements in the event of a rising rate
scenario. The interest rate cap agreements provide for us to receive a quarterly
adjustable  rate  of  interest  equivalent  to  the  differential   between  the
three-month  London Interbank Offering Rate and the strike price of 7.50% should
the three-month  London Interbank Offering Rate exceed the strike price. At June
30, 2002 and December 31, 2001,  the carrying  value of these  interest rate cap
agreements,  which is included in  derivative  instruments  in the  consolidated
balance sheets, was $559,000 and $2.1 million, respectively.

Pledged Collateral

         At June 30, 2002 and  December  31,  2001,  we had  pledged  investment
securities  available  for sale with a carrying  value of $6.0  million and $1.1
million,  respectively, in connection with our interest rate swap agreements. In
addition,  at June  30,  2002,  and  December  31,  2001,  we had  accepted,  as
collateral in connection with our interest rate swap  agreements,  cash of $71.7
million and $4.9  million,  respectively.  At  December  31,  2001,  we had also
accepted investment  securities with a fair value of $53.9 million as collateral
in  connection  with our  interest  rate swap  agreements.  We are  permitted by
contract to sell or repledge the  collateral  accepted from our  counterparties,
however, at June 30, 2002 and December 31, 2001, we had not done so.

Interest  Rate  Lock  Commitments/Forward  Commitments  to Sell  Mortgage-Backed
Securities

         Derivative financial  instruments issued by us consist of interest rate
lock  commitments  to  originate  fixed-rate  loans.  Commitments  to  originate
fixed-rate loans consist  primarily of residential real estate loans.  These net
loan  commitments  and loans held for sale are hedged with forward  contracts to
sell mortgage-backed securities.

                       Loans and Allowance for Loan Losses

         Interest earned on our loan portfolio  represents the principal  source
of income for our  subsidiary  banks.  Interest and fees on loans were 92.1% and
92.5% of total interest income for the three and six months ended June 30, 2002,
respectively,  in  comparison to 93.4% and 92.8% for the  comparable  periods in
2001.  Total loans, net of unearned  discount,  decreased $46.2 million to $5.36
billion,  or 76.5% of total assets, at June 30, 2002, compared to $5.41 billion,
or 79.8% of total  assets,  at December  31,  2001.  The  decrease in loans,  as
reflected on our  consolidated  balance sheets,  exclusive of our acquisition of
PFC, which provided  loans,  net of unearned  discount,  of $150.4  million,  is
primarily attributable to declines in our commercial, financial and agricultural
and loans held for sale  portfolios  due to an  anticipated  amount of attrition
associated with our acquisitions completed during the fourth quarter of 2001 and
the first  quarter of 2002,  as well as current  economic  conditions  prevalent
within our markets,  resulting in lower loan demand.  In addition,  our consumer
and installment portfolio, net of unearned discount, decreased to $106.3 million
at June 30,  2002 from  $122.1  million at  December  31,  2001.  This  decrease
reflects continued reductions in new loan volumes and the repayment of principal
on our  existing  portfolio,  and is also  consistent  with  our  objectives  of
de-emphasizing consumer lending and expanding commercial lending.
<PAGE>

         Nonperforming  assets include nonaccrual loans,  restructured loans and
other real estate.  The following table presents the categories of nonperforming
assets and certain ratios as of the dates indicated:

<TABLE>
<CAPTION>
                                                                                    June 30,      December 31,
                                                                                      2002            2001
                                                                                      ----            ----
                                                                                 (dollars expressed in thousands)

         Commercial, financial and agricultural:
<S>                                                                               <C>                 <C>
              Nonaccrual.....................................................     $   22,828          19,326
         Real estate construction and development:
              Nonaccrual.....................................................         19,569           3,270
         Real estate mortgage:
              Nonaccrual.....................................................         27,906          41,898
              Restructured terms.............................................          1,972           2,013
         Consumer and installment:
              Nonaccrual.....................................................            901             794
              Restructured terms.............................................             --               7
                                                                                 -----------      ----------
                  Total nonperforming loans..................................         73,176          67,308
         Other real estate...................................................          3,949           4,316
                                                                                 -----------      ----------
                  Total nonperforming assets.................................    $    77,125          71,624
                                                                                 ===========      ==========

         Loans, net of unearned discount.....................................    $ 5,362,632       5,408,869
                                                                                 ===========      ==========

         Loans past due 90 days or more and still accruing...................    $     8,061          15,156
                                                                                 ===========      ==========

         Ratio of:
              Allowance for loan losses to loans.............................           1.94%           1.80%
              Nonperforming loans to loans...................................           1.36            1.24
              Allowance for loan losses to nonperforming loans...............         141.84          144.36
              Nonperforming assets to loans and other real estate............           1.44            1.32
                                                                                 ===========      ==========
</TABLE>

         Nonperforming  loans,  consisting  of loans on  nonaccrual  status  and
certain  restructured  loans, were $73.2 million at June 30, 2002, in comparison
to $67.3 million at December 31, 2001.  The increase in  nonperforming  loans is
primarily attributable to the addition of a $16.1 million borrowing relationship
to nonaccrual real estate  construction and development  loans during the second
quarter of 2002.  The  relationship  relates to a residential  and  recreational
development project that had significant financial  difficulties and experienced
inadequate  project  financing  at  inception,  project  delays and weak project
management.  This  relationship had previously been on nonaccrual status and was
removed from nonaccrual status during the third quarter of 2001 due to financing
being  recast  with  a  new   borrower,   who  appeared  able  to  meet  ongoing
developmental  expectations.  Subsequent  to that  time,  the new  borrower  has
encountered  internal  management  problems,  which have negatively impacted and
further   delayed   development   of  the  project.   Excluding  this  borrowing
relationship,  nonperforming  loans  decreased  $10.2  million from December 31,
2001,  primarily as a result of increased  loan  charge-offs.  Loan  charge-offs
increased significantly to $11.6 million and $28.0 million for the three and six
months ended June 30, 2002,  respectively,  from $6.4 million and $15.3  million
for the  comparable  periods in 2001,  primarily due to the general  slowdown in
economic  conditions as well as  charge-offs  aggregating  $12.9 million on four
large credit relationships.  We attribute the higher trends in nonperforming and
delinquent  loans and  charge-offs  to cyclical  trends  experienced  within the
banking industry, as a result of economic slowdown.  Consistent with the general
economic slow down experienced  within our primary  markets,  we anticipate this
trend will continue in the near future.

<PAGE>


         The following  table is a summary of our loan loss  experience  for the
periods indicated:

<TABLE>
<CAPTION>

                                                                       Three Months Ended      Six Months Ended
                                                                            June 30,               June 30,
                                                                       ------------------     ------------------
                                                                        2002       2001        2002        2001
                                                                        ----       ----        ----        ----
                                                                            (dollars expressed in thousands)

<S>                                                                    <C>        <C>         <C>        <C>
         Allowance for loan losses, beginning of period..............  $  99,683  77,996      97,164     81,592
         Acquired allowances for loan losses.........................         --      --       1,366         --
                                                                       --------- -------     -------    -------
                                                                          99,683  77,996      98,530     81,592
                                                                       --------- -------     -------    -------
         Loans charged-off...........................................    (11,625) (6,433)    (28,033)   (15,336)
         Recoveries of loans previously charged-off..................      3,736   1,858       8,297      3,775
                                                                       --------- -------     -------    -------
         Net loan charge-offs........................................     (7,889) (4,575)    (19,736)   (11,561)
                                                                       --------- -------     -------    -------
         Provision for loan losses...................................     12,000   3,720      25,000      7,110
                                                                       --------- -------     -------    -------
         Allowance for loan losses, end of period....................  $ 103,794  77,141     103,794     77,141
                                                                       ========= =======     =======    =======
</TABLE>

         The  allowance  for loan losses is monitored on a monthly  basis.  Each
month, the credit  administration  department  provides management with detailed
lists of loans on the watch list and  summaries of the entire loan  portfolio of
each subsidiary bank by risk rating.  These are coupled with analyses of changes
in the risk profiles of the  portfolios,  changes in past-due and  nonperforming
loans and changes in watch list and classified  loans over time. In this manner,
we continually  monitor the overall increases or decreases in the levels of risk
in the portfolios.  Factors are applied to the loan portfolios for each category
of loan risk to determine  acceptable  levels of allowance  for loan losses.  We
derive these factors from the actual loss experience of our subsidiary banks and
from  published  national  surveys  of norms  in the  industry.  The  calculated
allowances required for the portfolios are then compared to the actual allowance
balances to determine  the  provisions  necessary to maintain the  allowances at
appropriate  levels.  In  addition,  management  exercises  a certain  degree of
judgment  in its  analysis of the overall  adequacy  of the  allowance  for loan
losses.  In its  analysis,  management  considers  the change in the  portfolio,
including growth,  composition,  the ratio of net loans to total assets, and the
economic  conditions  of  the  regions  in  which  we  operate.  Based  on  this
quantitative and qualitative analysis,  provisions are made to the allowance for
loan losses.  Such  provisions are reflected in our  consolidated  statements of
income.

                                    Liquidity

         Our liquidity and the liquidity of our subsidiary  banks is the ability
to  maintain a cash flow which is  adequate  to fund  operations,  service  debt
obligations and meet other  commitments on a timely basis.  Our subsidiary banks
receive funds for liquidity from customer deposits, loan payments, maturities of
loans and investments,  sales of investments and earnings.  In addition,  we may
avail ourselves of other sources of funds by issuing  certificates of deposit in
denominations of $100,000 or more,  borrowing federal funds,  selling securities
under  agreements to repurchase and utilizing  borrowings  from the Federal Home
Loan Banks and other  borrowings,  including  our  revolving  credit  line.  The
aggregate  funds  acquired  from these  sources  were $709.4  million and $754.8
million at June 30, 2002 and December 31, 2001, respectively.

         The  following  table  presents the  maturity  structure of these other
sources of funds, which consists of certificates of deposit of $100,000 or more,
short-term borrowings and our revolving note payable, at June 30, 2002:

                                                             (dollars expressed
                                                                in thousands)

         Three months or less.................................     $367,601
         Over three months through six months.................      115,572
         Over six months through twelve months................      105,943
         Over twelve months...................................      120,248
                                                                   --------
                Total.........................................     $709,364
                                                                   ========
<PAGE>

         In  addition  to these  sources  of funds,  our  subsidiary  banks have
established  borrowing  relationships  with the Federal  Reserve  Banks in their
respective  districts.  These  borrowing  relationships,  which are  secured  by
commercial loans,  provide an additional liquidity facility that may be utilized
for contingency  purposes. At June 30, 2002 and December 31, 2001, the borrowing
capacity of our subsidiary banks under these agreements was approximately  $1.19
billion and $1.21 billion,  respectively.  In addition,  our  subsidiary  banks'
borrowing capacity through their  relationships with the Federal Home Loan Banks
was  approximately  $363.5  million  and  $234.6  million  at June 30,  2002 and
December 31, 2001,  respectively.  At June 30, 2002 and December 31, 2001, there
were no amounts outstanding under either of these agreements.

         Management  believes the available  liquidity and operating  results of
our  subsidiary  banks will be  sufficient  to  provide  funds for growth and to
permit the  distribution of dividends to us sufficient to meet our operating and
debt service requirements,  both on a short-term and long-term basis, and to pay
the  dividends  on the  trust  preferred  securities  issued  by  our  financing
subsidiaries, First Preferred Capital Trust I, First Preferred Capital Trust II,
First  Preferred  Capital  Trust III and First  Bank  Capital  Trust,  and FBA's
financing subsidiary, First America Capital Trust.



<PAGE>


       ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         At December 31, 2001, our risk management  program's  simulation  model
indicated a loss of projected  net interest  income in the event of a decline in
interest rates.  While a decline in interest rates of less than 100 basis points
was projected to have a relatively minimal impact on our net interest income, an
instantaneous,  parallel decline in the interest yield curve of 100 basis points
indicated a pre-tax projected loss of approximately 6.1% of net interest income,
based on assets and  liabilities  at December  31, 2001.  At June 30,  2002,  we
remain in an  "asset-sensitive"  position and thus,  remain  subject to a higher
level of risk in a  declining  interest  rate  environment.  Although  we do not
anticipate  that  instantaneous  shifts in the yield curve as  projected  in our
simulation  model are likely,  these are indications of the effects that changes
in interest rates would have over time. Our  asset-sensitive  position,  coupled
with reductions in prevailing  interest rates  throughout  2001, is reflected in
our reduced net interest margin for the three and six months ended June 30, 2002
as  compared  to the  comparable  periods in 2001 and  further  discussed  under
"--Results of Operations."  During the three and six months ended June 30, 2002,
our asset-sensitive position and overall susceptibility to market risks have not
changed materially.



<PAGE>


                           Part II - OTHER INFORMATION


                    ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)   The exhibits are numbered in accordance with the Exhibit Table of Item 601
      of Regulation S-K.

          Exhibit Number                Description
          --------------                -----------

               4.15              Indenture  between  First Banks,  Inc., as
                                 Issuer,  and  Wilmington Trust Company, as
                                 Trustee, dated as of April 10, 2002.

               4.16              Guarantee Agreement for First Bank Capital
                                 Trust,  dated as of April 10, 2002.

               4.17              Amended  and Restated Declaration of Trust
                                 of First  Bank Capital Trust,  dated as of
                                 April 10, 2002.

               4.18              Floating  Rate  Junior  Subordinated  Debt
                                 Security Certificate of First Banks, Inc.,
                                 dated April 10, 2002.

               4.19              Capital Security Certificate of First Bank
                                 Capital Trust, dated as of April 10, 2002.

               99.1              Certification  of  Periodic Report - Chief
                                 Executive Officer.

               99.2              Certification of  Periodic  Report - Chief
                                 Financial Officer.

(b)   We filed no reports on Form 8-K for the three months ended June 30, 2002.



<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                FIRST BANKS, INC.



August 12, 2002                 By: /s/  James F. Dierberg
                                    -------------------------------------------
                                         James F. Dierberg
                                         Chairman of the Board of Directors
                                         and Chief Executive Officer
                                         (Principal Executive Officer)


August 12, 2002                 By: /s/  Allen H. Blake
                                    -------------------------------------------
                                         Allen H. Blake
                                         President, and Chief Financial Officer
                                         (Principal Financial and
                                         Accounting Officer)




<PAGE>

                                                                    Exhibit 4.15













                               FIRST BANKS, INC.
                                    as Issuer








                                    INDENTURE
                           Dated as of April 10, 2002

                            WILMINGTON TRUST COMPANY

                                   as Trustee



           FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITIES DUE 2032


<PAGE>
<TABLE>
<CAPTION>


                                TABLE OF CONTENTS
                                                                                                    Page
                                                                                                    ----

<S>                                                                                                  <C>
Parties.............................................................................................  1
Recitals............................................................................................  1
Authorization of Indenture..........................................................................  1
Compliance with Legal Requirements..................................................................  1
Purpose of and Consideration for Indenture..........................................................  1

                                    ARTICLE I
                                   DEFINITIONS

     SECTION 1.01. Definitions......................................................................  1
Additional Interest.................................................................................  1
Additional Provisions...............................................................................  1
Authenticating Agent................................................................................  1
Bankruptcy Law......................................................................................  1
Board of Directors..................................................................................  2
Board Resolution....................................................................................  2
Business Day........................................................................................  2
Calculation Agent...................................................................................  2
Capital Securities..................................................................................  2
Capital Securities Guarantee........................................................................  2
Capital Treatment Event.............................................................................  2
Certificate.........................................................................................  3
Common Securities...................................................................................  3
Company.............................................................................................  3
Comparable Treasury Issue...........................................................................  3
Comparable Treasury Price...........................................................................  3
Debt Security or Debt Securities....................................................................  3
Debt Security Register..............................................................................  3
Declaration.........................................................................................  3
Default.............................................................................................  3
Defaulted Interest..................................................................................  3
Deferred Interest...................................................................................  4
Event of Default....................................................................................  4
Extension Period....................................................................................  4
Federal Reserve.....................................................................................  4
Indenture...........................................................................................  4
Institutional Trustee...............................................................................  4
Interest Payment Date...............................................................................  4
Interest Rate.......................................................................................  4
Investment Company Event............................................................................  4
LIBOR...............................................................................................  4
LIBOR Banking Day...................................................................................  4
LIBOR Business Day..................................................................................  4
LIBOR Determination Date............................................................................  5
Liquidation Amount..................................................................................  5
Maturity Date.......................................................................................  5
Officers' Certificate...............................................................................  5
Opinion of Counsel..................................................................................  5
outstanding.........................................................................................  5
Person..............................................................................................  5
Predecessor.........................................................................................  6
Primary Treasury Dealer.............................................................................  6
Principal Office of the Trustee.....................................................................  6

<PAGE>

Quotation Agent.....................................................................................  6
Redemption Date.....................................................................................  6
Redemption Price....................................................................................  6
Reference Treasury Dealer...........................................................................  6
Reference Treasury Dealer Quotations................................................................  6
Remaining Life......................................................................................  6
Responsible Officer.................................................................................  6
Securities Act......................................................................................  7
Securityholder, holder of Debt Securities...........................................................  7
Senior..............................................................................................  7
Special Event.......................................................................................  7
Special Redemption Date.............................................................................  7
Special Redemption Price............................................................................  7
Subsidiary..........................................................................................  8
Tax Event...........................................................................................  8
Treasury Rate.......................................................................................  8
Trust...............................................................................................  9
Trust Indenture Act.................................................................................  9
Trust Securities....................................................................................  9
Trustee.............................................................................................  9
United States.......................................................................................  9
U.S. Person.........................................................................................  9

                                   ARTICLE II
                                 DEBT SECURITIES

SECTION 2.01. Authentication and Dating.............................................................  9
SECTION 2.02. Form of Trustee's Certificate of Authentication....................................... 10
SECTION 2.03. Form and Denomination of Debt Securities.............................................. 10
SECTION 2.04. Execution of Debt Securities.......................................................... 10
SECTION 2.05. Exchange and Registration of Transfer of Debt Securities.............................. 11
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debt Securities.................................. 14
SECTION 2.07. Temporary Debt Securities............................................................. 14
SECTION 2.08. Payment of Interest................................................................... 15
SECTION 2.09. Cancellation of Debt Securities Paid, etc............................................. 16
SECTION 2.10. Computation of Interest............................................................... 16
SECTION 2.11. Extension of Interest Payment Period.................................................. 18
SECTION 2.12. CUSIP Numbers......................................................................... 19

                                   ARTICLE III
                       PARTICULAR COVENANTS OF THE COMPANY

SECTION 3.01. Payment of Principal, Premium and Interest; Agreed Treatment of the Debt
                 Securities......................................................................... 19
SECTION 3.02. Offices for Notices and Payments, etc................................................. 20
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office.................................... 20
SECTION 3.04. Provision as to Paying Agent.......................................................... 21
SECTION 3.05. Certificate to Trustee................................................................ 22
SECTION 3.06. Additional Interest................................................................... 22
SECTION 3.07. Compliance with Consolidation Provisions.............................................. 22
SECTION 3.08. Limitation on Dividends............................................................... 22
SECTION 3.09. Covenants as to the Trust............................................................. 23


<PAGE>



                                   ARTICLE IV
                    LISTS AND REPORTS BY THE COMPANY AND THE
                                     TRUSTEE

SECTION 4.01. Securityholders' Lists................................................................ 24
SECTION 4.02. Preservation and Disclosure of Lists.................................................. 24

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

SECTION 5.01. Events of Default..................................................................... 25
SECTION 5.02. Payment of Debt Securities on Default; Suit Therefor.................................. 27
SECTION 5.03. Application of Moneys Collected by Trustee............................................ 29
SECTION 5.04. Proceedings by Securityholders........................................................ 29
SECTION 5.05. Proceedings by Trustee................................................................ 30
SECTION 5.06. Remedies Cumulative and Continuing.................................................... 30
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by Majority of
                 Securityholders.................................................................... 30
SECTION 5.08. Notice of Defaults.................................................................... 31
SECTION 5.09. Undertaking to Pay Costs.............................................................. 31

                                   ARTICLE VI
                             CONCERNING THE TRUSTEE

SECTION 6.01. Duties and Responsibilities of Trustee................................................ 32
SECTION 6.02. Reliance on Documents, Opinions, etc.................................................. 33
SECTION 6.03. No Responsibility for Recitals, etc................................................... 34
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents
                 or Registrar May Own Debt Securities............................................... 34
SECTION 6.05. Moneys to be Held in Trust............................................................ 34
SECTION 6.06. Compensation and Expenses of Trustee.................................................. 35
SECTION 6.07. Officers' Certificate as Evidence..................................................... 35
SECTION 6.08. Eligibility of Trustee................................................................ 36
SECTION 6.09. Resignation or Removal of Trustee..................................................... 36
SECTION 6.10. Acceptance by Successor Trustee....................................................... 37
SECTION 6.11. Succession by Merger, etc............................................................. 38
SECTION 6.12. Authenticating Agents................................................................. 39

                                   ARTICLE VII
                         CONCERNING THE SECURITYHOLDERS

SECTION 7.01. Action by Securityholders............................................................. 40
SECTION 7.02. Proof of Execution by Securityholders................................................. 41
SECTION 7.03. Who Are Deemed Absolute Owners........................................................ 41
SECTION 7.04. Debt Securities Owned by Company Deemed Not Outstanding............................... 41
SECTION 7.05. Revocation of Consents; Future Holders Bound.......................................... 42

<PAGE>


                                  ARTICLE VIII
                            SECURITYHOLDERS' MEETINGS


SECTION 8.01. Purposes of Meetings.................................................................. 42
SECTION 8.02. Call of Meetings by Trustee........................................................... 43
SECTION 8.03. Call of Meetings by Company or Securityholders........................................ 43
SECTION 8.04. Qualifications for Voting............................................................. 43
SECTION 8.05. Regulations........................................................................... 43
SECTION 8.06. Voting................................................................................ 44
SECTION 8.07. Quorum; Actions....................................................................... 45

                                   ARTICLE IX
                             SUPPLEMENTAL INDENTURES

SECTION 9.01. Supplemental Indentures without Consent of Securityholders............................ 46
SECTION 9.02. Supplemental Indentures with Consent of Securityholders............................... 47
SECTION 9.03. Effect of Supplemental Indentures..................................................... 48
SECTION 9.04. Notation on Debt Securities........................................................... 48
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be
                 Furnished to Trustee............................................................... 49

                                    ARTICLE X
                            REDEMPTION OF SECURITIES

SECTION 10.01. Optional Redemption.................................................................. 49
SECTION 10.02. Special Event Redemption............................................................. 49
SECTION 10.03. Notice of Redemption; Selection of Debt Securities................................... 49
SECTION 10.04. Payment of Debt Securities Called for Redemption..................................... 50

                                   ARTICLE XI
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 11.01. Company May Consolidate, etc., on Certain Terms...................................... 51
SECTION 11.02. Successor Entity to be Substituted................................................... 51
SECTION 11.03. Opinion of Counsel to be Given to Trustee............................................ 52

                                   ARTICLE XII
                     SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 12.01. Discharge of Indenture............................................................... 52
SECTION 12.02. Deposited Moneys to be Held in Trust by Trustee...................................... 53
SECTION 12.03. Paying Agent to Repay Moneys Held.................................................... 53
SECTION 12.04. Return of Unclaimed Moneys........................................................... 53

                                  ARTICLE XIII
                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

SECTION 13.01. Indenture and Debt Securities Solely Corporate Obligations........................... 53

                                   ARTICLE XIV
                            MISCELLANEOUS PROVISIONS

SECTION 14.01. Successors........................................................................... 54
SECTION 14.02. Official Acts by Successor Entity.................................................... 54
SECTION 14.03. Surrender of Company Powers.......................................................... 54
SECTION 14.04. Addresses for Notices, etc........................................................... 54
SECTION 14.05. Governing Law........................................................................ 55
SECTION 14.06. Evidence of Compliance with Conditions Precedent..................................... 55
SECTION 14.07. Non-Business Days.................................................................... 55
SECTION 14.08. Table of Contents, Headings, etc..................................................... 56
SECTION 14.09. Execution in Counterparts............................................................ 56
SECTION 14.10. Separability......................................................................... 56
SECTION 14.11. Assignment........................................................................... 56
SECTION 14.12. Acknowledgment of Rights............................................................. 56

<PAGE>

                                   ARTICLE XV
                        SUBORDINATION OF DEBT SECURITIES

SECTION 15.01. Agreement to Subordinate............................................................. 57
SECTION 15.02. Default on Senior Indebtedness....................................................... 57
SECTION 15.03. Liquidation; Dissolution; Bankruptcy................................................. 58
SECTION 15.04. Subrogation.......................................................................... 59
SECTION 15.05. Trustee to Effectuate Subordination.................................................. 60
SECTION 15.06. Notice by the Company................................................................ 60
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness................................ 61
SECTION 15.08. Subordination May Not Be Impaired.................................................... 61

EXHIBITS

EXHIBIT A      FORM OF DEBT SECURITY

</TABLE>

<PAGE>



               THIS INDENTURE,  dated as of April 10, 2002, between First Banks,
Inc., a bank holding  company  incorporated in Missouri  (hereinafter  sometimes
called  the  "Company"),  and  Wilmington  Trust  Company,  a  Delaware  banking
corporation, as trustee (hereinafter sometimes called the "Trustee").

                              W I T N E S S E T H :

               WHEREAS, for its lawful corporate purposes,  the Company has duly
authorized the issuance of its Floating Rate Junior Subordinated Debt Securities
due 2032 (the "Debt  Securities")  under this  Indenture  and to provide,  among
other things, for the execution and authentication,  delivery and administration
thereof, the Company has duly authorized the execution of this Indenture.

               NOW,  THEREFORE,  in  consideration  of  the  premises,  and  the
purchase of the Debt Securities by the holders  thereof,  the Company  covenants
and  agrees  with the  Trustee  for the equal and  proportionate  benefit of the
respective holders from time to time of the Debt Securities as follows:

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.01. Definitions.
                       -----------

               The  terms  defined  in  this  Section  1.01  (except  as  herein
otherwise  expressly provided or unless the context otherwise  requires) for all
purposes of this Indenture and of any indenture  supplemental  hereto shall have
the respective  meanings  specified in this Section 1.01.  All accounting  terms
used herein and not expressly  defined shall have the meanings  assigned to such
terms in accordance with generally accepted  accounting  principles and the term
"generally accepted accounting  principles" means such accounting  principles as
are generally accepted in the United States at the time of any computation.  The
words "herein," "hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.

               "Additional Interest" shall have the meaning set forth in Section
3.06.

               "Additional  Provisions"  shall  have the  meaning  set  forth in
Section 15.01.

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

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

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

               "Board Resolution" means a copy of a resolution  certified by the
Secretary or an Assistant  Secretary of the Company to have been duly adopted by
the Board of  Directors  and to be in full  force and effect on the date of such
certification  and delivered to the Trustee.  "Business Day" means any day other
than a  Saturday,  Sunday  or any  other day on which  banking  institutions  in
Wilmington,  Delaware,  New York City or St.  Louis,  Missouri are  permitted or
required by any applicable law or executive order to close.

               "Calculation  Agent" means the Person  identified as "Trustee" in
the  first  paragraph  hereof  with  respect  to the  Debt  Securities  and  the
Institutional Trustee with respect to the Trust Securities.

               "Capital  Securities" means undivided beneficial interests in the
assets of the Trust which are  designated as "TRUPS(R)" and rank pari passu with
Common Securities issued by the Trust;  provided,  however,  that if an Event of
                                        --------   -------
Default (as defined in the  Declaration)  has  occurred and is  continuing,  the
rights  of  holders  of  such  Common   Securities  to  payment  in  respect  of
distributions  and payments  upon  liquidation,  redemption  and  otherwise  are
subordinated to the rights of holders of such Capital Securities.
<PAGE>

               "Capital Securities Guarantee" means the guarantee agreement that
the Company will enter into with Wilmington  Trust Company or other Persons that
operates directly or indirectly for the benefit of holders of Capital Securities
of the Trust.

               "Capital  Treatment  Event " means the receipt by the Company and
the Trust of an  opinion of counsel  experienced  in such  matters to the effect
that,  as a result  of any  amendment  to,  or change  in,  the  laws,  rules or
regulations  of the  United  States  or any  political  subdivision  thereof  or
therein,  or as the result of any official or  administrative  pronouncement  or
action or decision  interpreting  or applying such laws,  rules or  regulations,
which  amendment  or  change  is  effective  or which  pronouncement,  action or
decision  is  announced  on or after the date of  original  issuance of the Debt
Securities,  there is more than an insubstantial risk that the Company will not,
within 90 days of the date of such opinion, be entitled to treat an amount equal
to the  aggregate  Liquidation  Amount  of the  Capital  Securities  as  "Tier 1
Capital" (or the then equivalent  thereof) for purposes of the capital  adequacy
guidelines of the Federal  Reserve (or any successor  regulatory  authority with
jurisdiction over bank holding  companies),  as then in effect and applicable to
the Company, provided,  however, that the distribution of the Debt Securities in
             --------   -------
connection  with the liquidation of the Trust by the Company shall not in and of
itself  constitute a Capital  Treatment Event unless such liquidation shall have
occurred in connection with a Tax Event or an Investment Company Event.

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

               "Common Securities" means undivided  beneficial  interests in the
assets of the Trust which are  designated as "Common  Securities"  and rank pari
passu with Capital Securities issued by the Trust; provided, however, that if an
                                                   --------  -------
Event of Default (as defined in the Declaration) has occurred and is continuing,
the  rights of  holders  of such  Common  Securities  to  payment  in respect of
distributions  and payments  upon  liquidation,  redemption  and  otherwise  are
subordinated to the rights of holders of such Capital Securities.

               "Company"  means  First  Banks,  Inc.,  a  bank  holding  company
incorporated  in Missouri,  and,  subject to the provisions of Article XI, shall
include its successors and assigns.

               "Comparable  Treasury  Issue " means with  respect to any Special
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  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
April 22,  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.

               "Comparable  Treasury  Price"  means  (a)  the  average  of  five
Reference  Treasury Dealer  Quotations for such Special  Redemption  Date, after
excluding the highest and lowest such Reference Treasury Dealer  Quotations,  or
(b) if the Quotation  Agent  receives  fewer than five such  Reference  Treasury
Dealer Quotations, the average of all such Quotations.

               "Debt  Security" or "Debt  Securities"  has the meaning stated in
the first recital of this Indenture.

               "Debt  Security  Register"  has the meaning  specified in Section
2.05.
<PAGE>

               "Declaration" means the Amended and Restated Declaration of Trust
of the Trust dated as of April 10, 2002, as amended or supplemented from time to
time.

               "Default"  means any event,  act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.

               "Defaulted Interest" has the meaning set forth in Section 2.08.

               "Deferred Interest" has the meaning set forth in Section 2.11.

               "Event of Default"  means any event  specified  in Section  5.01,
which has  continued for the period of time, if any, and after the giving of the
notice, if any, therein designated.

               "Extension Period" has the meaning set forth in Section 2.11.

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

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

               "Institutional   Trustee"  has  the  meaning  set  forth  in  the
Declaration.

               "Interest  Payment  Date"  means  April 22 and October 22 of each
year, commencing on October 22, 2002, during the term of this Indenture.

               "Interest  Rate"  means  a per  annum  rate  of  interest,  reset
semi-annually,  equal to LIBOR,  as determined on the LIBOR  Determination  Date
immediately  preceding each Interest Payment Date, plus 3.875%;  provided,  that
                                                                 --------
the applicable  Interest Rate may not exceed 11.00% through the Interest Payment
Date in April 2007.

               "Investment  Company  Event" means the receipt by the Company and
the Trust of an  opinion of counsel  experienced  in such  matters to the effect
that,  as a  result  of a change  in law or  regulation  or  written  change  in
interpretation  or  application  of law or regulation by any  legislative  body,
court,  governmental  agency  or  regulatory  authority,  there is more  than an
insubstantial  risk  that the  Trust is or,  within  90 days of the date of such
opinion  will be,  considered  an  "investment  company"  that is required to be
registered under the Investment Company Act of 1940, as amended, which change or
prospective change becomes effective or would become effective,  as the case may
be, on or after the date of the original issuance of the Debt Securities.

               "LIBOR"  means the London  Interbank  Offered Rate for  six-month
U.S. Dollar deposits in Europe as determined by the Calculation  Agent according
to Section 2.10(b).

               "LIBOR  Banking  Day"  has  the  meaning  set  forth  in  Section
2.10(b)(1).

               "LIBOR  Business  Day"  has the  meaning  set  forth  in  Section
2.10(b)(1).

               "LIBOR  Determination  Date" has the meaning set forth in Section
2.10(b).

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

               "Maturity Date" means April 22, 2032.

               "Officers'   Certificate"  means  a  certificate  signed  by  the
Chairman of the Board,  the Vice Chairman,  the President or any Vice President,
and by the Chief Financial Officer, the Treasurer,  an Assistant Treasurer,  the
Comptroller,  an Assistant Comptroller,  the Secretary or an Assistant Secretary
of the  Company,  and  delivered  to the Trustee.  Each such  certificate  shall
include  the  statements  provided  for in  Section  14.06 if and to the  extent
required by the provisions of such Section.
<PAGE>

               "Opinion of Counsel"  means an opinion in writing signed by legal
counsel,  who may be an employee of or counsel to the  Company,  or may be other
counsel reasonably  satisfactory to the Trustee. Each such opinion shall include
the  statements  provided for in Section 14.06 if and to the extent  required by
the provisions of such Section. The term "outstanding," when used with reference
to Debt Securities,  subject to the provisions of Section 7.04, means, as of any
particular time, all Debt Securities  authenticated and delivered by the Trustee
or the Authenticating Agent under this Indenture, except

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

               (b) Debt  Securities,  or  portions  thereof,  for the payment or
          redemption  of which  moneys in the  necessary  amount shall have been
          deposited  in trust with the Trustee or with any paying  agent  (other
          than the Company) or shall have been set aside and segregated in trust
          by the  Company (if the  Company  shall act as its own paying  agent);
          provided,  that, if such Debt Securities,  or portions thereof, are to
          be redeemed prior to maturity thereof, notice of such redemption shall
          have  been  given  as  provided  in  Articles  X and XIV or  provision
          satisfactory  to the  Trustee  shall  have been made for  giving  such
          notice; and

               (c) Debt  Securities  paid pursuant to Section 2.06 or in lieu of
          or in  substitution  for which other Debt  Securities  shall have been
          authenticated  and  delivered  pursuant  to the terms of Section  2.06
          unless proof  satisfactory to the Company and the Trustee is presented
          that any such Debt  Securities  are held by bona fide  holders  in due
          course.

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

               "Predecessor  Security" of any  particular  Debt  Security  means
every  previous  Debt Security  evidencing  all or a portion of the same debt as
that evidenced by such particular  Debt Security;  and, for the purposes of this
definition,  any Debt Security authenticated and delivered under Section 2.06 in
lieu of a lost,  destroyed or stolen Debt  Security  shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.

               "Primary   Treasury   Dealer"  means  a  primary   United  States
Government securities dealer in New York City.

               "Principal  Office of the Trustee," or other similar term,  means
the office of the Trustee,  at which at any particular  time its corporate trust
business shall be principally administered,  which at all times shall be located
within the  United  States and at the time of the  execution  of this  Indenture
shall be Rodney Square North,  1100 North Market  Street,  Wilmington,  Delaware
19890-0001.

               "Quotation  Agent "  means  Salomon  Smith  Barney  Inc.  and its
successors; provided, however, that if the foregoing shall cease to be a Primary
            --------  -------
Treasury Dealer, the Company shall substitute  therefor another Primary Treasury
Dealer.

               "Redemption Date" has the meaning set forth in Section 10.01.
<PAGE>

               "Redemption Price" means 100% of the principal amount of the Debt
Securities  being  redeemed  plus  accrued  and  unpaid  interest  on such  Debt
Securities  to the  Redemption  Date or, in the case of a redemption  due to the
occurrence of a Special Event,  to the Special  Redemption  Date if such Special
Redemption Date is on or after April 22, 2007.

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

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

               "Remaining  Life" means,  with respect to any Debt Security,  the
period  from the  Special  Redemption  Date for such Debt  Security to April 22,
2007.

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

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

               "Securityholder,"  "holder of Debt  Securities"  or other similar
terms,  means any Person in whose name at the time a particular Debt Security is
registered on the Debt Security Register.

               "Senior Indebtedness" means, with respect to the Company, (i) the
principal,  premium,  if any, and interest in respect of (A) indebtedness of the
Company  for  money  borrowed  and (B)  indebtedness  evidenced  by  securities,
debentures,  notes,  bonds or other similar  instruments  issued by the Company;
(ii) all capital lease obligations of the Company;  (iii) all obligations of the
Company  issued or assumed  as the  deferred  purchase  price of  property,  all
conditional  sale  obligations of the Company and all obligations of the Company
under any title  retention  agreement  (but  excluding  trade  accounts  payable
arising in the ordinary course of business); (iv) all obligations of the Company
for the  reimbursement  of any letter of credit,  any banker's  acceptance,  any
security purchase facility, any repurchase agreement or similar arrangement, any
interest rate swap, any other hedging arrangement,  any obligation under options
or any similar  credit or other  transaction;  (v) all  obligations  of the type
referred to in clauses (i) through  (iv) above of other  Persons for the payment
of which  the  Company  is  responsible  or  liable  as  obligor,  guarantor  or
otherwise;  (vi) all  obligations of the type referred to in clauses (i) through
(v) above of other  Persons  secured by any lien on any property or asset of the
Company  (whether or not such  obligation  is assumed by the  Company),  whether
incurred  on or prior  to the date of this  Indenture  or  thereafter  incurred,
unless,  with  the  prior  approval  of the  Federal  Reserve  if not  otherwise
generally  approved,  in the  instrument  creating  or  evidencing  the  same or
pursuant to which the same is outstanding,  it is provided that such obligations
are not  superior  or are pari passu in right of payment to  (including  without
limitation the Company's 9.25% Subordinated  Debentures due 2027 issued to First
Preferred Capital Trust I and the Company's 10.24%  Subordinated  Debentures due
2030 issued to First Preferred Capital Trust II) the Debt Securities;  and (vii)
all  obligations of the Company in respect of the Company's  9.00%  Subordinated
Debentures  due 2031  issued to First  Preferred  Capital  Trust III under  that
certain  Indenture by and between  First  Banks,  Inc. and State Street Bank and
Trust  Company of  Connecticut,  National  Association,  as Trustee  dated as of
November 15, 2001.

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

               "Special Redemption Date" has the meaning set forth in 10.02.
<PAGE>

               "Special  Redemption  Price" means (1) if the Special  Redemption
Date is before April 22, 2007,  the greater of (a) 100% of the principal  amount
of the Debt  Securities  being  redeemed  pursuant  to  Section  10.02 or (b) as
determined by a Quotation  Agent, the sum of the present values of the principal
amount payable as part of the  Redemption  Price with respect to a redemption as
of April  22,  2007,  together  with the  present  value  of  interest  payments
calculated  at a fixed  per  annum  rate of  interest  equal to  9.95%  over the
Remaining  Life of such Debt  Securities,  discounted to the Special  Redemption
Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 0.50%, plus, in the case of either (a) or (b),
accrued and unpaid  interest on such Debt  Securities to the Special  Redemption
Date and (2) if the Special  Redemption  Date is on or after April 22, 2007, the
Redemption Price for such Special Redemption Date.

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

               "Tax Event"  means the receipt by the Company and the Trust of an
opinion of counsel  experienced  in such matters to the effect that, as a result
of any amendment to or change  (including any announced  prospective  change) in
the laws or any  regulations  thereunder  of the United  States or any political
subdivision  or  taxing  authority  thereof  or  therein,  or as a result of any
official  administrative  pronouncement  (including  any private  letter ruling,
technical advice memorandum,  regulatory  procedure,  notice or announcement (an
"Administrative  Action")) or judicial  decision  interpreting  or applying such
laws or  regulations,  regardless  of  whether  such  Administrative  Action  or
judicial decision is issued to or in connection with a proceeding  involving the
Company  or the Trust and  whether or not  subject  to review or  appeal,  which
amendment, clarification,  change, Administrative Action or decision is enacted,
promulgated or announced, in each case on or after the date of original issuance
of the Debt Securities,  there is more than an insubstantial  risk that: (i) the
Trust  is, or will be within  90 days of the date of such  opinion,  subject  to
United States federal  income tax with respect to income  received or accrued on
the Debt Securities; (ii) interest payable by the Company on the Debt Securities
is not, or within 90 days of the date of such opinion,  will not be,  deductible
by the  Company,  in whole or in part,  for  United  States  federal  income tax
purposes;  or (iii)  the Trust is, or will be within 90 days of the date of such
opinion,  subject to more than a de  minimis  amount of other  taxes  (including
withholding taxes), duties, assessments or other governmental charges.

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

               "Trust"  means First Bank Capital  Trust,  the Delaware  business
trust,  or any other similar  trust  created for the purpose of issuing  Capital
Securities  in  connection  with the  issuance  of Debt  Securities  under  this
Indenture, of which the Company is the sponsor.

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

               "Trust Securities" means Common Securities and Capital Securities
of First Bank Capital Trust.

               "Trustee"  means the Person  identified as "Trustee" in the first
paragraph  hereof,  and,  subject to the provisions of Article VI hereof,  shall
also include its successors and assigns as Trustee  hereunder.  "United  States"
means the United States of America and the District of Columbia.

               "U.S.  Person" has the meaning  given to United  States Person as
set forth in  Section  7701(a)(30)  of the  Internal  Revenue  Code of 1986,  as
amended.

                                   ARTICLE II

                                 DEBT SECURITIES

         SECTION 2.01. Authentication and Dating.
                       -------------------------

               Upon the execution and delivery of this  Indenture,  or from time
to time  thereafter,  Debt  Securities in an aggregate  principal  amount not in
excess of  $25,774,000  may be  executed  and  delivered  by the  Company to the
Trustee for  authentication,  and the Trustee shall thereupon  authenticate  and
make available for delivery said Debt Securities to or upon the written order of
the Company,  signed by its Chairman of the Board of Directors,  Vice  Chairman,
President or Chief Financial Officer or one of its Vice Presidents,  without any
further action by the Company hereunder. In authenticating such Debt Securities,
and accepting the additional  responsibilities  under this Indenture in relation
to such Debt Securities,  the Trustee shall be entitled to receive, and (subject
to Section  6.01) shall be fully  protected  in relying upon a copy of any Board
Resolution  or  Board  Resolutions  relating  thereto  and,  if  applicable,  an
appropriate record of any action taken pursuant to such resolution, in each case
certified by the Secretary or an Assistant  Secretary of the Company as the case
may be.

               The Trustee shall have the right to decline to  authenticate  and
deliver any Debt Securities under this Section if the Trustee,  being advised by
counsel,  determines  that  such  action  may  not  lawfully  be  taken  or if a
Responsible  Officer  of the  Trustee in good faith  shall  determine  that such
action would expose the Trustee to personal liability to existing holders.

               The  definitive   Debt  Securities   shall  be  typed,   printed,
lithographed  or  engraved on steel  engraved  borders or may be produced in any
other manner,  all as determined by the officers executing such Debt Securities,
as evidenced by their execution of such Debt Securities.

         SECTION 2.02. Form of Trustee's Certificate of Authentication.
                       -----------------------------------------------

               The  Trustee's   certificate  of   authentication   on  all  Debt
Securities shall be in substantially the following form:

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

               WILMINGTON  TRUST  COMPANY,  not in its  individual  capacity but
solely as trustee


                  By_________________________
                           Authorized Officer
<PAGE>

         SECTION 2.03. Form and Denomination of Debt Securities.
                       ----------------------------------------

               The Debt Securities shall be substantially in the form of Exhibit
A hereto. The Debt Securities shall be in registered,  certificated form without
coupons and in minimum  denominations  of $100,000 and any multiple of $1,000 in
excess thereof.  The Debt Securities shall be numbered,  lettered,  or otherwise
distinguished  in such manner or in  accordance  with such plans as the officers
executing the same may  determine  with the approval of the Trustee as evidenced
by the execution and authentication thereof.

         SECTION 2.04. Execution of Debt Securities.
                       ----------------------------

               The Debt Securities  shall be signed in the name and on behalf of
the Company by the manual or facsimile signature of its Chairman of the Board of
Directors,  Vice Chairman,  President or Chief  Financial  Officer or one of its
Executive Vice Presidents,  Senior Vice Presidents or Vice Presidents, under its
corporate  seal which may be affixed  thereto or printed,  engraved or otherwise
reproduced thereon,  by facsimile or otherwise,  and which need not be attested.
Only such Debt Securities as shall bear thereon a certificate of  authentication
substantially in the form herein before recited,  executed by the Trustee or the
Authenticating Agent by the manual signature of an authorized officer,  shall be
entitled to the  benefits of this  Indenture or be valid or  obligatory  for any
purpose.  Such certificate by the Trustee or the  Authenticating  Agent upon any
Debt Security executed by the Company shall be conclusive evidence that the Debt
Security so authenticated has been duly  authenticated  and delivered  hereunder
and that the holder is entitled to the benefits of this Indenture.

               In case any  officer of the  Company who shall have signed any of
the Debt Securities shall cease to be such officer before the Debt Securities so
signed  shall  have been  authenticated  and  delivered  by the  Trustee  or the
Authenticating  Agent,  or  disposed  of by the  Company,  such Debt  Securities
nevertheless  may be  authenticated  and  delivered or disposed of as though the
Person who signed such Debt  Securities had not ceased to be such officer of the
Company;  and any Debt  Security  may be signed on behalf of the Company by such
Persons as, at the actual date of the execution of such Debt Security,  shall be
the proper  officers of the  Company,  although at the date of the  execution of
this Indenture any such person was not such an officer.

               Every   Debt   Security   shall   be   dated   the  date  of  its
authentication.

         SECTION 2.05. Exchange and Registration of Transfer of Debt Securities.
                       --------------------------------------------------------

               The  Company  shall  cause to be kept,  at the  office  or agency
maintained  for the  purpose of  registration  of transfer  and for  exchange as
provided in Section 3.02, a register (the "Debt Security Register") for the Debt
Securities issued hereunder in which, subject to such reasonable  regulations as
it may prescribe, the Company shall provide for the registration and transfer of
all Debt  Securities as provided in this Article II. Such  register  shall be in
written form or in any other form capable of being  converted  into written form
within a reasonable time.

               Debt  Securities  to be  exchanged  may  be  surrendered  at  the
Principal  Office of the Trustee or at any office or agency to be  maintained by
the Company for such purpose as provided in Section 3.02,  and the Company shall
execute,  the  Company or the  Trustee  shall  register  and the  Trustee or the
Authenticating  Agent shall  authenticate  and make  available  for  delivery in
exchange therefor the Debt Security or Debt Securities which the  Securityholder
making the  exchange  shall be  entitled to receive.  Upon due  presentment  for
registration  of transfer of any Debt  Security at the  Principal  Office of the
Trustee or at any office or agency of the Company maintained for such purpose as
provided in Section 3.02, the Company shall execute,  the Company or the Trustee
shall register and the Trustee or the  Authenticating  Agent shall  authenticate
and make  available for delivery in the name of the  transferee or transferees a
new  Debt  Security  for a like  aggregate  principal  amount.  Registration  or
registration  of transfer of any Debt Security by the Trustee or by any agent of
the  Company  appointed  pursuant  to Section  3.02,  and  delivery of such Debt
Security,  shall be deemed to  complete  the  registration  or  registration  of
transfer of such Debt Security.
<PAGE>

               All Debt Securities presented for registration of transfer or for
exchange  or payment  shall (if so required by the Company or the Trustee or the
Authenticating  Agent)  be duly  endorsed  by, or be  accompanied  by, a written
instrument or  instruments of transfer in form  satisfactory  to the Company and
either the Trustee or the  Authenticating  Agent duly executed by, the holder or
such holder's attorney duly authorized in writing.

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

               The Company or the  Trustee  shall not be required to exchange or
register a transfer  of any Debt  Security  for a period of 15 days  immediately
preceding the date of selection of Debt Securities for redemption.

               Notwithstanding  the  foregoing,   Debt  Securities  may  not  be
transferred except in compliance with the restricted securities legend set forth
below, unless otherwise  determined by the Company in accordance with applicable
law, which legend shall be placed on each Debt Security:

               THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS OR ANY
OTHER  APPLICABLE  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 ONLY
(A) TO THE COMPANY,  (B) PURSUANT TO RULE 144A UNDER THE  SECURITIES  ACT ("RULE
144A"), TO A PERSON THE HOLDER 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,  (C)  PURSUANT TO AN  EXEMPTION
FROM REGISTRATION TO AN "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 AN  "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 (D)
12 PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION
OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER  INFORMATION  SATISFACTORY  TO  IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE  HEREOF AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.

               THE HOLDER OF THIS  SECURITY  BY ITS  ACCEPTANCE  HEREOF  AGREES,
REPRESENTS  AND  WARRANTS  THAT IT  WILL  NOT  ENGAGE  IN  HEDGING  TRANSACTIONS
INVOLVING  THIS SECURITY  UNLESS SUCH  TRANSACTIONS  ARE IN COMPLIANCE  WITH THE
SECURITIES ACT.
<PAGE>

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

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

               THIS  SECURITY  WILL BE  ISSUED  AND MAY BE  TRANSFERRED  ONLY IN
BLOCKS  HAVING A PRINCIPAL  AMOUNT OF NOT LESS THAN  $100,000  AND  MULTIPLES OF
$1,000 IN EXCESS  THEREOF.  ANY  ATTEMPTED  TRANSFER OF THIS SECURITY IN A BLOCK
HAVING A PRINCIPAL  AMOUNT OF LESS THAN $100,000  SHALL BE DEEMED TO BE VOID AND
OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT
TO BE THE HOLDER OF THIS  SECURITY FOR ANY PURPOSE,  INCLUDING,  BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

         SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debt Securities.
                       ----------------------------------------------------

               In case any Debt Security shall become mutilated or be destroyed,
lost or stolen,  the Company  shall  execute,  and upon its written  request the
Trustee shall authenticate and deliver, a new Debt Security bearing a number not
contemporaneously  outstanding,  in exchange and  substitution for the mutilated
Debt  Security,  or in lieu of and in  substitution  for the  Debt  Security  so
destroyed,  lost or stolen.  In every case the applicant for a substituted  Debt
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless,  and, in every case of
destruction,  loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction,  loss or theft of
such Debt Security and of the ownership thereof.

               The Trustee may  authenticate  any such substituted Debt Security
and deliver the same upon the written request or authorization of any officer of
the Company. Upon the issuance of any substituted Debt Security, the Company may
require the payment of a sum  sufficient to cover any tax or other  governmental
charge that may be imposed in relation thereto and any other expenses  connected
therewith.  In case any Debt Security which has matured or is about to mature or
has been called for  redemption in full shall become  mutilated or be destroyed,
lost or stolen,  the Company may, instead of issuing a substitute Debt Security,
pay or authorize the payment of the same (without  surrender  thereof  except in
the case of a mutilated  Debt  Security) if the applicant for such payment shall
furnish to the Company  and the Trustee  such  security or  indemnity  as may be
required by them to save each of them harmless and, in case of destruction, loss
or  theft,  evidence  satisfactory  to the  Company  and to the  Trustee  of the
destruction, loss or theft of such Security and of the ownership thereof.
<PAGE>

               Every substituted Debt Security issued pursuant to the provisions
of this  Section  2.06 by  virtue of the fact  that any such  Debt  Security  is
destroyed,  lost or stolen shall constitute an additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Debt Security shall
be  found at any  time,  and  shall  be  entitled  to all the  benefits  of this
Indenture  equally and  proportionately  with any and all other Debt  Securities
duly  issued  hereunder.  All Debt  Securities  shall be held and owned upon the
express condition that, to the extent permitted by applicable law, the foregoing
provisions  are  exclusive  with  respect  to  the  replacement  or  payment  of
mutilated,  destroyed, lost or stolen Debt Securities and shall preclude any and
all other  rights or  remedies  notwithstanding  any law or statute  existing or
hereafter  enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

         SECTION 2.07. Temporary Debt Securities.
                       -------------------------

               Pending  the  preparation  of  definitive  Debt  Securities,  the
Company may execute and the Trustee shall  authenticate  and make  available for
delivery  temporary Debt  Securities  that are typed,  printed or  lithographed.
Temporary Debt Securities shall be issuable in any authorized denomination,  and
substantially  in the form of the  definitive  Debt  Securities  but  with  such
omissions,  insertions and  variations as may be appropriate  for temporary Debt
Securities,  all as may be determined by the Company.  Every such temporary Debt
Security  shall be executed by the Company and be  authenticated  by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect,  as the definitive Debt  Securities.  Without  unreasonable  delay,  the
Company  will  execute and deliver to the  Trustee or the  Authenticating  Agent
definitive  Debt  Securities and thereupon any or all temporary Debt  Securities
may be surrendered in exchange therefor,  at the Principal Office of the Trustee
or at any  office  or agency  maintained  by the  Company  for such  purpose  as
provided  in Section  3.02,  and the Trustee or the  Authenticating  Agent shall
authenticate and make available for delivery in exchange for such temporary Debt
Securities a like aggregate principal amount of such definitive Debt Securities.
Such  exchange  shall be made by the  Company at its own expense and without any
charge  therefor  except  that  in  case  of  any  such  exchange   involving  a
registration  of transfer the Company may require payment of a sum sufficient to
cover any tax, fee or other governmental  charge that may be imposed in relation
thereto. Until so exchanged, the temporary Debt Securities shall in all respects
be  entitled  to the same  benefits  under this  Indenture  as  definitive  Debt
Securities authenticated and delivered hereunder.

         SECTION 2.08. Payment of Interest.
                       -------------------

               Each Debt  Security  will bear  interest  at the then  applicable
Interest Rate from and including  each Interest  Payment Date or, in the case of
the first interest  period,  the original date of issuance of such Debt Security
to, but excluding,  the next succeeding Interest Payment Date or, in the case of
the last interest  period,  the  Redemption  Date,  Special  Redemption  Date or
Maturity Date, as applicable, on the principal thereof, on any overdue principal
and (to the extent that payment of such interest is enforceable under applicable
law) on Deferred Interest and on any overdue  installment of interest (including
Defaulted Interest),  payable (subject to the provisions of Article XII) on each
Interest Payment Date commencing on October 22, 2002.  Interest and any Deferred
Interest on any Debt  Security that is payable,  and is punctually  paid or duly
provided for, on any Interest  Payment Date shall be paid to the Person in whose
name said Debt Security (or one or more Predecessor Securities) is registered at
the close of business on the regular record date for such interest  installment,
except that  interest and any  Deferred  Interest  payable on the Maturity  Date
shall be paid to the  Person to whom  principal  is paid.  In the event that any
Debt Security or portion  thereof is called for  redemption  and the  redemption
date is subsequent to a regular record date with respect to any Interest Payment
Date and prior to such  Interest  Payment  Date,  interest on such Debt Security
will be paid upon presentation and surrender of such Debt Security.

               Any interest on any Debt Security,  other than Deferred Interest,
that  is  payable,  but is not  punctually  paid or duly  provided  for,  on any
Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease
to be payable to the  registered  holder on the relevant  regular record date by

<PAGE>

virtue of having been such holder,  and such Defaulted Interest shall be paid by
the  Company  to the  Persons  in whose  names  such Debt  Securities  (or their
respective Predecessor  Securities) are registered at the close of business on a
special record date for the payment of such Defaulted  Interest,  which shall be
fixed in the following  manner:  the Company shall notify the Trustee in writing
of the  amount  of  Defaulted  Interest  proposed  to be paid on each  such Debt
Security and the date of the proposed payment,  and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate  amount
proposed  to be paid in  respect  of  such  Defaulted  Interest  or  shall  make
arrangements  satisfactory  to the Trustee for such deposit prior to the date of
the  proposed  payment,  such money when  deposited  to be held in trust for the
benefit of the  Persons  entitled to such  Defaulted  Interest as in this clause
provided.  Thereupon the Trustee shall fix a special record date for the payment
of such  Defaulted  Interest  which shall not be more than fifteen nor less than
ten days prior to the date of the  proposed  payment  and not less than ten days
after the  receipt by the  Trustee of the notice of the  proposed  payment.  The
Trustee shall  promptly  notify the Company of such special  record date and, in
the name and at the expense of the  Company,  shall cause notice of the proposed
payment of such  Defaulted  Interest and the special  record date therefor to be
mailed,  first  class  postage  prepaid,  to each  Securityholder  at his or her
address  as it  appears in the Debt  Security  Register,  not less than ten days
prior to such  special  record  date.  Notice of the  proposed  payment  of such
Defaulted  Interest and the special  record date therefor  having been mailed as
aforesaid,  such Defaulted  Interest shall be paid to the Persons in whose names
such Debt Securities (or their respective Predecessor Securities) are registered
on such special  record date and  thereafter  the Company  shall have no further
payment obligation in respect of the Defaulted Interest.

               Any interest  scheduled to become payable on an Interest  Payment
Date occurring  during an Extension  Period shall not be Defaulted  Interest and
shall be payable on such  other  date as may be  specified  in the terms of such
Debt Securities.

               The term "regular record date" as used in this Section shall
mean the fifteenth day prior to an Interest Payment Date whether or not such
date is a Business Day.

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

         SECTION 2.09. Cancellation of Debt Securities Paid, etc.
                       -----------------------------------------

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

         SECTION 2.10. Computation of Interest.
                       -----------------------

               (a) The amount of interest  payable for any interest  period will
be computed on the basis of a 360-day year and the actual number of days elapsed
in the relevant interest period; provided,  however, that upon the occurrence of
                                 --------   -------
a Special  Event  Redemption  pursuant  to  Section  10.02 the  amounts  payable
pursuant to this Indenture shall be calculated as set forth in the definition of
Special Redemption Price.

               (b)  LIBOR  shall  be  determined  by the  Calculation  Agent  in
accordance with the following provisions:
<PAGE>

                    (1) On the second LIBOR Business Day (provided, that on such
                                                          --------
               day commercial banks are open for business (including dealings in
               foreign currency deposits) in London (a "LIBOR Banking Day"), and
               otherwise the next  preceding  LIBOR  Business Day that is also a
               LIBOR  Banking Day) prior to May 1 and  November 1 (except,  with
               respect to the first interest payment period,  on April 8, 2002),
               (each such day, a "LIBOR Determination  Date"), LIBOR shall equal
               the rate, as obtained by the Calculation Agent for six-month U.S.
               Dollar  deposits in Europe,  which  appears on Telerate Page 3750
               (as   defined  in  the   International   Swaps  and   Derivatives
               Association,  Inc.  1991  Interest  Rate  and  Currency  Exchange
               Definitions) or such other page as may replace such Telerate Page
               3750, as of 11:00 a.m. (London time) on such LIBOR  Determination
               Date,  as reported by  Bloomberg  Financial  Markets  Commodities
               News; provided,  however,  that in the case of the first interest
                     --------   -------
               payment  period,  LIBOR  will  be  interpolated  from  LIBOR  for
               six-month  U.S.  Dollar  deposits  in Europe  and LIBOR for seven
               month U.S. Dollar  deposits in Europe on a  straight-line  basis.
               "LIBOR Business Day" means any day that is not a Saturday, Sunday
               or other  day on which  commercial  banking  institutions  in New
               York,  New  York  or  Wilmington,   Delaware  are  authorized  or
               obligated by law or executive order to be closed. If such rate is
               superseded on Telerate Page 3750 by a corrected rate before 12:00
               noon  (London  time) on the same LIBOR  Determination  Date,  the
               corrected rate as so substituted will be the applicable LIBOR for
               that LIBOR Determination Date.


                    (2) If, on any LIBOR  Determination Date, such rate does not
               appear on Telerate  Page 3750 as reported by Bloomberg  Financial
               Markets  Commodities  News or such other page as may replace such
               Telerate Page 3750,  the  Calculation  Agent shall  determine the
               arithmetic mean of the offered  quotations of the Reference Banks
               (as  defined  below) to  leading  banks in the  London  Interbank
               market for six-month U.S. Dollar deposits in Europe (in an amount
               determined by the Calculation Agent) by reference to requests for
               quotations as of  approximately  11:00 a.m.  (London time) on the
               LIBOR  Determination  Date made by the  Calculation  Agent to the
               Reference  Banks. If, on any LIBOR  Determination  Date, at least
               two of the Reference Banks provide such  quotations,  LIBOR shall
               equal the arithmetic  mean of such  quotations.  If, on any LIBOR
               Determination  Date,  only  one or  none of the  Reference  Banks
               provide  such  a  quotation,  LIBOR  shall  be  deemed  to be the
               arithmetic  mean of the  offered  quotations  that at  least  two
               leading  banks  in the  City  of New  York  (as  selected  by the
               Calculation   Agent)   are   quoting   on  the   relevant   LIBOR
               Determination  Date for six-month U.S.  Dollar deposits in Europe
               at   approximately   11:00  a.m.  (London  time)  (in  an  amount
               determined by the Calculation Agent). As used herein,  "Reference
               Banks"  means four major  banks in the  London  interbank  market
               selected by the Calculation Agent.

                    (3) If the  Calculation  Agent is required  but is unable to
               determine  a  rate  in  accordance  with  at  least  one  of  the
               procedures  provided above, LIBOR shall be LIBOR in effect on the
               previous LIBOR  Determination Date (whether or not LIBOR for such
               period was in fact determined on such LIBOR Determination Date).

               (c) All percentages  resulting from any  calculations on the Debt
Securities will be rounded, if necessary,  to the nearest one hundred-thousandth
of a percentage  point,  with five  one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)),
and all  dollar  amounts  used in or  resulting  from such  calculation  will be
rounded to the nearest cent (with one-half cent being rounded upward).

               (d) On each LIBOR Determination Date, the Calculation Agent shall
notify, in writing,  the Company and the Paying Agent of the applicable Interest
Rate in effect for the related  Interest  Payment Date.  The  Calculation  Agent
shall,  upon the  request  of the  holder of any Debt  Securities,  provide  the
Interest Rate then in effect.  All calculations made by the Calculation Agent in

<PAGE>

the absence of manifest  error shall be conclusive  for all purposes and binding
on the Company and the Holders of the Debt Securities. The Paying Agent shall be
entitled  to rely on  information  received  from the  Calculation  Agent or the
Company as to the Interest Rate. The Company shall,  from time to time,  provide
any necessary  information  to the Paying Agent  relating to any original  issue
discount and interest on the Debt Securities that is included in any payment and
reportable for taxable income calculation purposes.

         SECTION 2.11. Extension of Interest Payment Period.
                       ------------------------------------

               So long as no Event of Default has  occurred  and is  continuing,
the Company shall have the right, from time to time and without causing an Event
of Default,  to defer  payments of interest on the Debt  Securities by extending
the interest  payment period on the Debt Securities at any time and from time to
time  during  the  term  of the  Debt  Securities,  for  up to  ten  consecutive
semi-annual  periods (each such extended  interest payment period, an "Extension
Period"),  during which  Extension  Period no interest  shall be due and payable
(except any  Additional  Interest  that may be due and  payable).  No  Extension
Period  may end on a date  other  than an  Interest  Payment  Date.  During  any
Extension Period,  interest will continue to accrue on the Debt Securities,  and
interest on such accrued  interest (such accrued  interest and interest  thereon
referred to herein as "Deferred  Interest")  will accrue,  at the Interest Rate,
compounded  semiannually  from the date such Deferred  Interest  would have been
payable were it not for the Extension  Period,  both to the extent  permitted by
law.  No  interest  or  Deferred  Interest  shall be due and  payable  during an
Extension  Period,  except at the end thereof.  At the end of any such Extension
Period the Company  shall pay all Deferred  Interest  then accrued and unpaid on
the Debt  Securities;  provided,  however,  that no Extension  Period may extend
                       --------   -------
beyond the Maturity Date; and provided  further,  however,  that during any such
                              --------  -------   -------
Extension Period,  the Company shall be subject to the restrictions set forth in
Section  3.08 of this  Indenture.  Prior  to the  termination  of any  Extension
Period, the Company may further extend such period,  provided,  that such period
                                                     --------
together with all such previous and further consecutive extensions thereof shall
not exceed ten consecutive  semi-annual  periods,  or extend beyond the Maturity
Date. Upon the  termination of any Extension  Period and upon the payment of all
Deferred Interest,  the Company may commence a new Extension Period,  subject to
the  foregoing  requirements.  The Company  must give the Trustee  notice of its
election to begin such  Extension  Period at least one Business Day prior to the
earlier of (i) the next succeeding date on which interest on the Debt Securities
would have been payable except for the election to begin such  Extension  Period
or (ii) the date such  interest is payable,  but in any event not later than the
related  regular  record date.  The Trustee  shall give notice of the  Company's
election to begin a new Extension Period to the Securityholders.

         SECTION 2.12. CUSIP Numbers.
                       -------------

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

                                   ARTICLE III

                       PARTICULAR COVENANTS OF THE COMPANY

         SECTION 3.01. Payment  of  Principal,   Premium  and  Interest;  Agreed
                       ---------------------------------------------------------
Treatment of the Debt Securities.
--------------------------------

               (a) The  Company  covenants  and  agrees  that it will  duly  and
punctually  pay or cause to be paid the  principal of and  premium,  if any, and
interest on the Debt Securities at the place, at the respective times and in the
manner provided in this Indenture and the Debt Securities.  At the option of the
Company,  each installment of interest on the Debt Securities may be paid (i) by
mailing  checks for such  interest  payable to the order of the  holders of Debt
Securities entitled thereto as they appear on the Debt Security Register or (ii)
by wire transfer to any account with a banking institution located in the United
States  designated  by such Person to the paying agent no later than the related
record date.

               (b) The Company will treat the Debt  Securities as  indebtedness,
and the interest payable in respect of such Debt Securities as interest, for all
U.S.  federal  income  tax  purposes.  All  payments  in  respect  of such  Debt
Securities will be made free and clear of U.S. withholding tax to any beneficial
owner thereof that has provided an Internal Revenue Service Form W-8 BEN (or any
substitute or successor form) establishing its non-U.S.  status for U.S. federal
income tax purposes.

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

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

         SECTION 3.02. Offices for Notices and Payments, etc.
                       -------------------------------------

               So long as any of the Debt  Securities  remain  outstanding,  the
Company  will  maintain in  Wilmington,  Delaware or in St.  Louis,  Missouri an
office or agency  where the Debt  Securities  may be presented  for payment,  an
office or agency where the Debt Securities may be presented for  registration of
transfer and for exchange as provided in this  Indenture and an office or agency
where  notices  and  demands  to or upon  the  Company  in  respect  of the Debt
Securities  or of this  Indenture  may be served.  The Company  will give to the
Trustee  written  notice of the location of any such office or agency and of any
change of location thereof.  Until otherwise designated from time to time by the
Company in a notice to the  Trustee,  or specified  as  contemplated  by Section
2.05, such office or agency for all of the above purposes shall be the Principal
Office of the  Trustee.  In case the  Company  shall fail to  maintain  any such
office or agency in Wilmington, Delaware or in St. Louis, Missouri or shall fail
to give such notice of the  location or of any change in the  location  thereof,
presentations and demands may be made and notices may be served at the Principal
Office of the Trustee.

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

         SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office.
                       --------------------------------------------------

               The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee,  will  appoint,  in the manner  provided in Section  6.09,  a
Trustee, so that there shall at all times be a Trustee hereunder.


<PAGE>


         SECTION 3.04. Provision as to Paying Agent.
                       ----------------------------

               (a) If the Company  shall  appoint a paying  agent other than the
Trustee,  it will cause such paying  agent to execute and deliver to the Trustee
an instrument  in which such agent shall agree with the Trustee,  subject to the
provision of this Section 3.04,

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

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

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

               (b) If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of and premium, if any, or interest, if
any,  on the Debt  Securities,  set aside,  segregate  and hold in trust for the
benefit  of the  holders of the Debt  Securities  a sum  sufficient  to pay such
principal,  premium or interest  so becoming  due and will notify the Trustee in
writing of any failure to take such action and of any failure by the Company (or
by any other  obligor  under the Debt  Securities)  to make any  payment  of the
principal of and premium,  if any, or interest,  if any, on the Debt  Securities
when the same shall become due and payable.

               Whenever the Company shall have one or more paying agents for the
Debt  Securities,  it will, on or prior to each due date of the principal of and
premium,  if any, or interest,  if any, on the Debt  Securities,  deposit with a
paying  agent a sum  sufficient  to pay the  principal,  premium or  interest so
becoming  due,  such  sum to be held in trust  for the  benefit  of the  Persons
entitled thereto and (unless such paying agent is the Trustee) the Company shall
promptly notify the Trustee in writing of its action or failure to act.

               (c)   Anything   in   this   Section   3.04   to   the   contrary
notwithstanding,  the Company  may, at any time,  for the purpose of obtaining a
satisfaction and discharge with respect to the Debt Securities, or for any other
reason,  pay, or direct any paying  agent to pay to the Trustee all sums held in
trust by the  Company  or any such  paying  agent,  such  sums to be held by the
Trustee upon the same terms and conditions herein contained.

               (d)   Anything   in   this   Section   3.04   to   the   contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
3.04 is subject to Sections 12.03 and 12.04.

               (e) The Company hereby  initially  appoints the Trustee to act as
paying agent.

         SECTION 3.05. Certificate to Trustee.
                       ----------------------

               The  Company  will  deliver to the  Trustee on or before 120 days
after the end of each fiscal year, so long as Debt  Securities  are  outstanding
hereunder,  a Certificate  stating that in the course of the  performance by the
signers of their  duties as  officers of the Company  they would  normally  have
knowledge  of any default by the  Company in the  performance  of any  covenants
contained herein, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge and
the nature thereof.


<PAGE>


         SECTION 3.06. Additional Interest.
                       -------------------

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

         SECTION 3.07. Compliance with Consolidation Provisions.
                       ----------------------------------------

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

         SECTION 3.08. Limitation on Dividends.
                       -----------------------

               If Debt Securities are initially issued to the Trust or a trustee
of such Trust in connection  with the issuance of Trust  Securities by the Trust
(regardless  of whether Debt  Securities  continue to be held by such Trust) and
(i) there shall have occurred and be  continuing  an Event of Default,  (ii) the
Company shall be in default with respect to its payment of any obligations under
the Capital Securities Guarantee or (iii) the Company shall have given notice of
its election to defer  payments of interest on the Debt  Securities by extending
the interest payment period as provided herein and such period, or any extension
thereof,  shall have commenced and be  continuing,  then the Company may not (A)
declare or pay any dividends or distributions on, or redeem, purchase,  acquire,
or make a  liquidation  payment  with respect to, any of the  Company's  capital
stock or (B) make any payment of principal of or interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Debt  Securities  (other
than (a)  repurchases,  redemptions or other  acquisitions  of shares of capital
stock of the Company (I) in connection  with any  employment  contract,  benefit
plan  or  other  similar  arrangement  with or for  the  benefit  of one or more
employees,  officers,  directors  or  consultants,  (II)  in  connection  with a
dividend  reinvestment or stockholder stock purchase plan or (III) in connection
with the  issuance of capital  stock of the Company (or  securities  convertible
into or exercisable for such capital stock),  as consideration in an acquisition
transaction  entered into prior to the  occurrence  of (i), (ii) or (iii) above,
(b) as a result  of any  exchange  or  conversion  of any class or series of the
Company's  capital  stock (or any capital  stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or series
of the Company's  indebtedness for any class or series of the Company's  capital
stock,  (c) the  purchase of  fractional  interests  in shares of the  Company's
capital stock pursuant to the conversion or exchange  provisions of such capital
stock or the security  being  converted or exchanged,  (d) any  declaration of a
dividend in connection  with any  stockholder's  rights plan, or the issuance of
rights,  stock or other  property  under any  stockholder's  rights plan, or the
redemption or repurchase of rights pursuant thereto,  or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock  issuable upon exercise of such  warrants,  options or other rights is the
same stock as that on which the  dividend is being paid or ranks pari passu with
or junior to such stock).



<PAGE>


         SECTION 3.09. Covenants as to the Trust.
                       -------------------------

               For so long as such  Trust  Securities  remain  outstanding,  the
Company  shall  maintain  100%  ownership  of the Common  Securities;  provided,
                                                                       --------
however,  that any permitted  successor of the Company under this Indenture that
-------
is a U.S.  Person  may  succeed  to  the  Company's  ownership  of  such  Common
Securities.  The  Company,  as  owner  of  the  Common  Securities,   shall  use
commercially  reasonable  efforts  to cause the Trust (a) to remain a  statutory
business  trust,  except in connection with a distribution of Debt Securities to
the holders of Trust  Securities in liquidation of the Trust,  the redemption of
all of the Trust Securities or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration, (b) to otherwise continue to be classified
as a grantor  trust for United  States  federal  income tax  purposes and (c) to
cause each  holder of Trust  Securities  to be  treated  as owning an  undivided
beneficial interest in the Debt Securities.

                                   ARTICLE IV

                LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

         SECTION 4.01. Securityholders' Lists.
                       ----------------------

               The Company covenants and agrees that it will furnish or cause to
be furnished to the Trustee:

(a) on each regular record date for an Interest Payment Date, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Securityholders of the Debt Securities as of such record date; and

               (b) at such other  times as the  Trustee  may request in writing,
within 30 days after the receipt by the Company of any such  request,  a list of
similar  form and  content  as of a date not more than 15 days prior to the time
such list is furnished;  except that no such lists need be furnished  under this
Section  4.01 so long as the Trustee is in  possession  thereof by reason of its
acting as Debt Security registrar.

         SECTION 4.02. Preservation and Disclosure of Lists.
                       ------------------------------------

               (a)  The  Trustee  shall  preserve,  in as  current  a form as is
reasonably  practicable,  all  information  as to the names and addresses of the
holders of Debt Securities (1) contained in the most recent list furnished to it
as  provided  in Section  4.01 or (2)  received  by it in the  capacity  of Debt
Securities registrar (if so acting) hereunder.  The Trustee may destroy any list
furnished  to it as  provided  in  Section  4.01 upon  receipt  of a new list so
furnished.

               (b) In case three or more holders of Debt Securities (hereinafter
referred to as "applicants")  apply in writing to the Trustee and furnish to the
Trustee  reasonable proof that each such applicant has owned a Debt Security for
a period of at least six months preceding the date of such application, and such
application  states that the applicants desire to communicate with other holders
of Debt  Securities  with respect to their rights under this  Indenture or under
such Debt  Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit,  then the Trustee shall
within  five  Business  Days  after  the  receipt  of such  application,  at its
election, either:

                    (1)  afford  such  applicants   access  to  the  information
               preserved  at the  time by the  Trustee  in  accordance  with the
               provisions of subsection (a) of this Section 4.02, or

                    (2) inform such applicants as to the  approximate  number of
               holders of Debt  Securities  whose names and addresses  appear in
               the  information   preserved  at  the  time  by  the  Trustee  in
               accordance  with the provisions of subsection (a) of this Section
               4.02,  and  as  to  the  approximate  cost  of  mailing  to  such
               Securityholders the form of proxy or other communication, if any,
               specified in such application.
<PAGE>

               If the Trustee shall elect not to afford such  applicants  access
to such  information,  the  Trustee  shall,  upon the  written  request  of such
applicants,  mail to each  Securityholder  of Debt  Securities  whose  name  and
address  appear  in the  information  preserved  at the time by the  Trustee  in
accordance  with the provisions of subsection (a) of this Section 4.02 a copy of
the form of proxy or other communication which is specified in such request with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment,  or provision  for the payment,  of the  reasonable  expenses of
mailing,  unless  within five days after such tender,  the Trustee shall mail to
such  applicants  and file  with the  Securities  and  Exchange  Commission,  if
permitted or required by applicable law, together with a copy of the material to
be  mailed,  a written  statement  to the  effect  that,  in the  opinion of the
Trustee,  such mailing would be contrary to the best interests of the holders of
all Debt Securities,  as the case may be, or would be in violation of applicable
law. Such written  statement  shall  specify the basis of such opinion.  If said
Commission,  as permitted or required by applicable law, after opportunity for a
hearing upon the objections  specified in the written statement so filed,  shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order  sustaining one or more of such  objections,  said Commission  shall
find,  after notice and  opportunity  for hearing,  that all the  objections  so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail  copies  of such  material  to all  such  Securityholders  with  reasonable
promptness  after  the  entry of such  order  and the  renewal  of such  tender;
otherwise  the  Trustee  shall be  relieved  of any  obligation  or duty to such
applicants respecting their application.

               (c) Each and every holder of Debt  Securities,  by receiving  and
holding the same,  agrees with the  Company  and the  Trustee  that  neither the
Company nor the Trustee nor any paying agent shall be held accountable by reason
of the  disclosure of any such  information as to the names and addresses of the
holders of Debt  Securities in accordance  with the provisions of subsection (b)
of this Section 4.02,  regardless of the source from which such  information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under said subsection (b).

                                    ARTICLE V

                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                            UPON AN EVENT OF DEFAULT

         SECTION 5.01. Events of Default.
                       -----------------

               The following events shall be "Events of Default" with respect to
Debt Securities:

               (a) the Company  defaults in the payment of any interest upon any
Debt Security when it becomes due and payable,  and  continuance of such default
for a period  of 30 days;  for the  avoidance  of  doubt,  an  extension  of any
interest  payment period by the Company in accordance  with Section 2.11 of this
Indenture shall not constitute a default under this clause 5.01(a); or

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

               (c) the Company defaults in the performance of, or breaches,  any
of its  covenants or agreements in Sections  3.06,  3.07,  3.08 and 3.09 of this
Indenture (other than a covenant or agreement a default in whose  performance or
whose  breach  is  elsewhere  in this  Section  specifically  dealt  with),  and
continuance  of such  default or breach for a period of 90 days after  there has
been given, by registered or certified mail, to the Company by the Trustee or to
the Company  and the  Trustee by the  holders of not less than 25% in  aggregate
principal amount of the outstanding Debt Securities, a written notice specifying
such  default or breach and  requiring  it to be remedied  and stating that such
notice is a "Notice of Default" hereunder; or
<PAGE>

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

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

               (f) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence except in
connection  with (1) the  distribution  of the Debt Securities to holders of the
Trust  Securities  in  liquidation  of their  interests  in the  Trust,  (2) the
redemption of all of the outstanding  Trust  Securities or (3) certain  mergers,
consolidations or amalgamations, each as permitted by the Declaration.

               If an Event of Default  occurs and is continuing  with respect to
the Debt Securities, then, and in each and every such case, unless the principal
of the Debt  Securities  shall have already  become due and payable,  either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debt Securities then outstanding hereunder,  by notice in writing to the Company
(and to the  Trustee  if given  by  Securityholders),  may  declare  the  entire
principal of the Debt Securities and the interest accrued, but unpaid,  thereon,
if any, to be due and payable  immediately,  and upon any such  declaration  the
same shall become immediately due and payable.

               The foregoing  provisions,  however, are subject to the condition
that if, at any time after the principal of the Debt Securities  shall have been
so declared due and  payable,  and before any judgment or decree for the payment
of the moneys due shall have been obtained or entered as  hereinafter  provided,
(i) the Company shall pay or shall deposit with the Trustee a sum  sufficient to
pay all matured  installments  of interest upon all the Debt  Securities and the
principal of and premium, if any, on the Debt Securities which shall have become
due  otherwise  than by  acceleration  (with  interest  upon such  principal and
premium, if any, and Deferred Interest, to the extent permitted by law) and such
amount as shall be sufficient to cover  reasonable  compensation  to the Trustee
and each predecessor  Trustee,  their respective agents,  attorneys and counsel,
and all other  amounts due to the Trustee  pursuant to Section 6.06, if any, and
(ii) all Events of Default under this  Indenture,  other than the non-payment of
the principal of or premium,  if any, on Debt Securities which shall have become
due by  acceleration,  shall have been cured,  waived or  otherwise  remedied as
provided  herein,  then and in every  such case the  holders  of a  majority  in
aggregate  principal amount of the Debt Securities then outstanding,  by written
notice to the Company and to the Trustee, may waive all defaults and rescind and
annul such  declaration and its  consequences,  but no such waiver or rescission
and annulment  shall extend to or shall affect any  subsequent  default or shall
impair any right consequent thereon.

               In case the  Trustee  shall have  proceeded  to enforce any right
under  this  Indenture  and such  proceedings  shall have been  discontinued  or
abandoned  because of such  rescission  or  annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the  Company,  the  Trustee  and the  holders  of the Debt  Securities  shall be
restored  respectively to their several positions and rights hereunder,  and all
rights,  remedies and powers of the Company,  the Trustee and the holders of the
Debt Securities shall continue as though no such proceeding had been taken.

         SECTION 5.02. Payment of Debt Securities on Default; Suit Therefor.
                       ----------------------------------------------------

               The Company  covenants  that upon the  occurrence  of an Event of
Default  pursuant to clause  5.01(a) or 5.01(b) and upon demand of the  Trustee,

<PAGE>

the Company will pay to the Trustee,  for the benefit of the holders of the Debt
Securities,  the whole amount that then shall have become due and payable on all
Debt Securities for principal and premium, if any, or interest,  or both, as the
case may be, including Deferred Interest accrued on the Debt Securities; and, in
addition thereto,  such further amount as shall be sufficient to cover the costs
and expenses of collection,  including a reasonable compensation to the Trustee,
its agents,  attorneys  and  counsel,  and any other  amounts due to the Trustee
under Section 6.06. In case the Company shall fail forthwith to pay such amounts
upon such  demand,  the  Trustee,  in its own name and as  trustee of an express
trust,  shall be entitled and empowered to institute any actions or  proceedings
at law or in equity for the  collection  of the sums so due and unpaid,  and may
prosecute any such action or  proceeding  to judgment or final  decree,  and may
enforce  any such  judgment  or final  decree  against  the Company or any other
obligor on such Debt Securities and collect in the manner provided by law out of
the  property  of the  Company  or any other  obligor  on such  Debt  Securities
wherever situated the moneys adjudged or decreed to be payable.

               In case there shall be pending  proceedings for the bankruptcy or
for  the  reorganization  of  the  Company  or any  other  obligor  on the  Debt
Securities  under  Bankruptcy  Law, or in case a receiver or trustee  shall have
been appointed for the property of the Company or such other obligor,  or in the
case of any other similar judicial  proceedings relative to the Company or other
obligor upon the Debt Securities, or to the creditors or property of the Company
or such other obligor, the Trustee, irrespective of whether the principal of the
Debt  Securities  shall  then be due and  payable  as  therein  expressed  or by
declaration of acceleration or otherwise and irrespective of whether the Trustee
shall have made any demand  pursuant to the  provisions  of this  Section  5.02,
shall  be  entitled  and  empowered,  by  intervention  in such  proceedings  or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Debt  Securities and, in case of
any  judicial  proceedings,  to file such  proofs  of claim and other  papers or
documents  as may be  necessary  or advisable in order to have the claims of the
Trustee (including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all other amounts due to the Trustee under Section 6.06) and of
the Securityholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Debt Securities,  or to the creditors or property of
the Company or such other  obligor,  unless  prohibited  by  applicable  law and
regulations,  to vote on behalf of the  holders  of the Debt  Securities  in any
election  of a trustee  or a standby  trustee  in  arrangement,  reorganization,
liquidation or other bankruptcy or insolvency  proceedings or Person  performing
similar  functions  in  comparable  proceedings,  and to collect and receive any
moneys or other  property  payable or  deliverable  on any such  claims,  and to
distribute  the same after the  deduction of its charges and  expenses;  and any
receiver,  assignee  or  trustee  in  bankruptcy  or  reorganization  is  hereby
authorized by each of the  Securityholders to make such payments to the Trustee,
and, in the event that the Trustee  shall consent to the making of such payments
directly to the Securityholders,  to pay to the Trustee such amounts as shall be
sufficient to cover  reasonable  compensation to the Trustee,  each  predecessor
Trustee  and their  respective  agents,  attorneys  and  counsel,  and all other
amounts due to the Trustee under Section 6.06.

               Nothing  herein  contained  shall be construed  to authorize  the
Trustee  to  authorize  or  consent  to or  accept  or  adopt on  behalf  of any
Securityholder   any  plan  of   reorganization,   arrangement,   adjustment  or
composition affecting the Debt Securities or the rights of any holder thereof or
to authorize  the Trustee to vote in respect of the claim of any  Securityholder
in any such proceeding.

               All  rights  of  action  and  of  asserting   claims  under  this
Indenture,  or under any of the Debt Securities,  may be enforced by the Trustee
without the possession of any of the Debt Securities,  or the production thereof
at any  trial  or  other  proceeding  relative  thereto,  and any  such  suit or
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express  trust,  and any  recovery  of  judgment  shall be for the ratable
benefit of the holders of the Debt Securities.

               In  any  proceedings   brought  by  the  Trustee  (and  also  any
proceedings  involving the  interpretation of any provision of this Indenture to
which the Trustee  shall be a party) the Trustee  shall be held to represent all
the holders of the Debt  Securities,  and it shall not be  necessary to make any
holders of the Debt Securities parties to any such proceedings.



<PAGE>


         SECTION 5.03. Application of Moneys Collected by Trustee.
                       ------------------------------------------

               Any  moneys  collected  by the  Trustee  shall be  applied in the
following  order, at the date or dates fixed by the Trustee for the distribution
of such moneys,  upon  presentation of the several Debt Securities in respect of
which  moneys have been  collected,  and stamping  thereon the payment,  if only
partially paid, and upon surrender thereof if fully paid:

               First:  To the  payment of costs and  expenses  incurred  by, and
reasonable fees of, the Trustee,  its agents,  attorneys and counsel, and of all
other amounts due to the Trustee under Section 6.06;

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

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

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

         SECTION 5.04. Proceedings by Securityholders.
                       ------------------------------

               No holder of any Debt Security  shall have any right to institute
any suit,  action or  proceeding  for any remedy  hereunder,  unless such holder
previously shall have given to the Trustee written notice of an Event of Default
with respect to the Debt  Securities and unless the holders of not less than 25%
in aggregate principal amount of the Debt Securities then outstanding shall have
given the Trustee a written request to institute such action, suit or proceeding
and shall have  offered  to the  Trustee  such  reasonable  indemnity  as it may
require against the costs,  expenses and liabilities to be incurred thereby, and
the Trustee for 60 days after its receipt of such  notice,  request and offer of
indemnity  shall have failed to institute any such action,  suit or  proceeding;
provided,  that no holder of Debt  Securities  shall have any right to prejudice
--------
the rights of any other holder of Debt Securities, obtain priority or preference
over any other such holder or enforce any right under this  Indenture  except in
the manner herein provided and for the equal,  ratable and common benefit of all
holders of Debt Securities.

               Notwithstanding any other provisions in this Indenture,  however,
the right of any holder of any Debt Security to receive payment of the principal
of,  premium,  if any,  and  interest  on such Debt  Security  when  due,  or to
institute suit for the enforcement of any such payment, shall not be impaired or
affected without the consent of such holder.  For the protection and enforcement
of the provisions of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

         SECTION 5.05. Proceedings by Trustee.
                       ----------------------

               In case of an Event of Default  hereunder  the Trustee may in its
discretion  proceed  to protect  and  enforce  the  rights  vested in it by this
Indenture by such  appropriate  judicial  proceedings  as the Trustee shall deem
most  effectual  to protect and enforce  any of such  rights,  either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise,  whether
for the specific  enforcement  of any  covenant or  agreement  contained in this
Indenture or in aid of the exercise of any power granted in this  Indenture,  or
to enforce  any other  legal or  equitable  right  vested in the Trustee by this
Indenture or by law.

         SECTION 5.06. Remedies Cumulative and Continuing.
                       ----------------------------------

               Except as  otherwise  provided  in Section  2.06,  all powers and
remedies given by this Article V to the Trustee or to the Securityholders shall,
to the extent  permitted by law, be deemed  cumulative  and not exclusive of any
other  powers and  remedies  available to the Trustee or the holders of the Debt

<PAGE>

Securities,  by judicial proceedings or otherwise, to enforce the performance or
observance  of the  covenants  and  agreements  contained  in this  Indenture or
otherwise  established  with  respect  to the Debt  Securities,  and no delay or
omission  of the  Trustee  or of any  holder  of any of the Debt  Securities  to
exercise any right or power  accruing  upon any Event of Default  occurring  and
continuing  as  aforesaid  shall  impair  any such  right or power,  or shall be
construed to be a waiver of any such default or an  acquiescence  therein;  and,
subject to the provisions of Section 5.04,  every power and remedy given by this
Article V or by law to the Trustee or to the  Securityholders  may be  exercised
from time to time, and as often as shall be deemed expedient,  by the Trustee or
by the Securityholders.

         SECTION 5.07. Direction  of  Proceedings  and  Waiver  of  Defaults  by
                       ---------------------------------------------------------
Majority of Securityholders.
---------------------------

               The holders of a majority in  aggregate  principal  amount of the
Debt Securities  affected  (voting as one class) at the time  outstanding  shall
have the right to direct the time, method and place of conducting any proceeding
for any  remedy  available  to the  Trustee,  or  exercising  any trust or power
conferred  on the  Trustee  with  respect  to such  Debt  Securities;  provided,
                                                                       --------
however, that (subject to the provisions of Section 6.01) the Trustee shall have
-------
the right to decline to follow any such direction if the Trustee shall determine
that the action so  directed  would be unjustly  prejudicial  to the holders not
taking  part in such  direction  or if the  Trustee  being  advised  by  counsel
determines  that the action or  proceeding so directed may not lawfully be taken
or if a Responsible  Officer of the Trustee shall  determine  that the action or
proceedings so directed would involve the Trustee in personal  liability.  Prior
to any declaration accelerating the maturity of the Debt Securities, the holders
of a majority in aggregate  principal  amount of the Debt Securities at the time
outstanding may on behalf of the holders of all of the Debt Securities waive (or
modify any  previously  granted  waiver of) any past default or Event of Default
and its  consequences,  except a default  (a) in the  payment of  principal  of,
premium,  if any, or interest on any of the Debt  Securities,  (b) in respect of
covenants or provisions  hereof which cannot be modified or amended  without the
consent of the holder of each Debt Security  affected,  or (c) in respect of the
covenants  contained  in  Section  3.09;  provided,  however,  that if the  Debt
                                          --------   -------
Securities  are held by the Trust or a trustee  of such  trust,  such  waiver or
modification  to such  waiver  shall not be  effective  until the  holders  of a
majority in  liquidation  preference of the Trust  Securities of the Trust shall
have consented to such waiver or modification to such waiver; provided, further,
                                                              --------  -------
that if the consent of the holder of each outstanding Debt Security is required,
such waiver shall not be effective until each holder of the Trust  Securities of
the Trust shall have consented to such waiver. Upon any such waiver, the default
covered  thereby shall be deemed to be cured for all purposes of this  Indenture
and the  Company,  the Trustee and the holders of the Debt  Securities  shall be
restored to their former positions and rights  hereunder,  respectively;  but no
such waiver shall extend to any  subsequent or other default or Event of Default
or impair any right consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 5.07, said default
or Event of  Default  shall for all  purposes  of the Debt  Securities  and this
Indenture be deemed to have been cured and to be not continuing.

         SECTION 5.08. Notice of Defaults.
                       ------------------

               The Trustee shall,  within 90 days after a Responsible Officer of
the  Trustee  shall have actual  knowledge  or  received  written  notice of the
occurrence  of a  default  with  respect  to the  Debt  Securities,  mail to all
Securityholders, as the names and addresses of such holders appear upon the Debt
Security  Register,  notice of all defaults with respect to the Debt  Securities
known to the  Trustee,  unless such  defaults  shall have been cured  before the
giving of such notice (the term  "defaults" for the purpose of this Section 5.08
being hereby defined to be the events  specified in  subsections  (a), (b), (c),
(d) and (e) of Section 5.01, not including  periods of grace,  if any,  provided
for therein);  provided,  that,  except in the case of default in the payment of
               --------
the principal of,  premium,  if any, or interest on any of the Debt  Securities,
the Trustee  shall be protected in  withholding  such notice if and so long as a
Responsible Officer of the Trustee in good faith determines that the withholding
of such notice is in the interests of the Securityholders.

         SECTION 5.09. Undertaking to Pay Costs.
                       ------------------------

               All parties to this Indenture  agree, and each holder of any Debt
Security by such  holder's  acceptance  thereof  shall be deemed to have agreed,

<PAGE>

that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee,  the filing by any party  litigant
in such  suit of an  undertaking  to pay the costs of such  suit,  and that such
court  may in its  discretion  assess  reasonable  costs,  including  reasonable
attorneys'  fees and expenses,  against any party litigant in such suit,  having
due regard to the merits and good faith of the claims or  defenses  made by such
party  litigant;  but the provisions of this Section 5.09 shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder, or
group of  Securityholders,  holding in the aggregate  more than 10% in principal
amount of the Debt  Securities  outstanding,  or to any suit  instituted  by any
Securityholder  for the  enforcement  of the  payment  of the  principal  of (or
premium,  if any) or  interest  on any Debt  Security  against the Company on or
after the same shall have become due and payable.

                                   ARTICLE VI
                             CONCERNING THE TRUSTEE


         SECTION 6.01. Duties and Responsibilities of Trustee.
                       --------------------------------------

               With respect to the holders of Debt Securities  issued hereunder,
the Trustee,  prior to the occurrence of an Event of Default with respect to the
Debt  Securities  and after the curing or waiving of all Events of Default which
may have occurred,  with respect to the Debt  Securities,  undertakes to perform
such  duties  and  only  such  duties  as are  specifically  set  forth  in this
Indenture.  In case an Event of Default with respect to the Debt  Securities has
occurred (which has not been cured or waived) the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their  exercise,  as a prudent  person  would  exercise or use
under the circumstances in the conduct of such person's own affairs.

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

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

                    (1) the duties and  obligations  of the Trustee with respect
               to the Debt Securities shall be determined  solely by the express
               provisions of this Indenture, and the Trustee shall not be liable
               except for the  performance of such duties and  obligations  with
               respect to the Debt Securities as are  specifically  set forth in
               this Indenture,  and no implied covenants or obligations shall be
               read into this Indenture against the Trustee; and

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

               (b) the  Trustee  shall not be liable  for any error of  judgment
made in good faith by a Responsible  Officer or Officers of the Trustee,  unless
it shall be proved that the Trustee was negligent in ascertaining  the pertinent
facts;

               (c) the Trustee  shall not be liable  with  respect to any action
taken or  omitted  to be  taken  by it in good  faith,  in  accordance  with the
direction of the Securityholders pursuant to Section 5.07, relating to the time,
method and place of conducting any  proceeding  for any remedy  available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture; and

               (d) the  Trustee  shall  not be  charged  with  knowledge  of any
Default or Event of Default with respect to the Debt  Securities  unless  either

<PAGE>

(1) a Responsible  Officer shall have actual  knowledge of such Default or Event
of Default or (2) written  notice of such Default or Event of Default shall have
been  given to the  Trustee  by the  Company  or any other  obligor  on the Debt
Securities  or by any holder of the Debt  Securities,  except with respect to an
Event of Default  pursuant to Sections  5.01(a) or 5.01(b) hereof (other than an
Event of  Default  resulting  from the  default  in the  payment  of  Additional
Interest or premium,  if any, if the Trustee  does not have actual  knowledge or
written notice that such payment is due and payable), of which the Trustee shall
be deemed to have knowledge.

               None of the provisions  contained in this Indenture shall require
the  Trustee  to  expend  or risk its own  funds  or  otherwise  incur  personal
financial  liability in the  performance of any of its duties or in the exercise
of any of its rights or powers.

         SECTION 6.02. Reliance on Documents, Opinions, etc.
                       ------------------------------------

               Except as otherwise provided in Section 6.01:

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

               (b) any  request,  direction,  order  or  demand  of the  Company
mentioned  herein shall be  sufficiently  evidenced by an Officers'  Certificate
(unless other evidence in respect  thereof be herein  specifically  prescribed);
and any Board  Resolution  may be  evidenced  to the  Trustee by a copy  thereof
certified by the Secretary or an Assistant Secretary of the Company;

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

               (d) the Trustee  shall be under no  obligation to exercise any of
the rights or powers  vested in it by this  Indenture at the  request,  order or
direction  of any of the  Securityholders,  pursuant to the  provisions  of this
Indenture,  unless  such  Securityholders  shall  have  offered  to the  Trustee
reasonable  security or indemnity  against the costs,  expenses and  liabilities
which may be incurred therein or thereby;

               (e) the  Trustee  shall not be  liable  for any  action  taken or
omitted by it in good faith and  believed by it to be  authorized  or within the
discretion  or rights or powers  conferred  upon it by this  Indenture;  nothing
contained herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to the Debt Securities  (that has
not been cured or waived) to exercise with respect to the Debt  Securities  such
of the  rights and powers  vested in it by this  Indenture,  and to use the same
degree of care and skill in their  exercise,  as a prudent person would exercise
or use under the circumstances in the conduct of such person's own affairs;

               (f) the Trustee shall not be bound to make any investigation into
the  facts  or  matters  stated  in  any  resolution,   certificate,  statement,
instrument,  opinion,  report, notice, request,  consent, order, approval, bond,
debenture,  coupon or other paper or document, unless requested in writing to do
so by the  holders  of not less  than a  majority  in  principal  amount  of the
outstanding Debt Securities  affected thereby;  provided,  however,  that if the
                                                --------   -------
payment  within a  reasonable  time to the  Trustee  of the costs,  expenses  or
liabilities  likely to be incurred by it in the making of such investigation is,
in the  opinion of the  Trustee,  not  reasonably  assured to the Trustee by the
security afforded to it by the terms of this Indenture,  the Trustee may require
reasonable  indemnity  against  such  expense or  liability as a condition to so
proceeding; and

               (g) the Trustee may execute any of the trusts or powers hereunder
or  perform  any  duties  hereunder  either  directly  or by or  through  agents
(including any Authenticating Agent) or attorneys,  and the Trustee shall not be
responsible  for any  misconduct  or negligence on the part of any such agent or
attorney appointed by it with due care.
<PAGE>

         SECTION 6.03. No Responsibility for Recitals, etc.
                       -----------------------------------

               The recitals  contained herein and in the Debt Securities (except
in the certificate of authentication of the Trustee or the Authenticating Agent)
shall  be  taken  as the  statements  of the  Company  and the  Trustee  and the
Authenticating  Agent assume no responsibility  for the correctness of the same.
The  Trustee  and the  Authenticating  Agent make no  representations  as to the
validity or sufficiency of this Indenture or of the Debt Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or application
by the Company of any Debt  Securities  or the  proceeds of any Debt  Securities
authenticated  and  delivered  by the  Trustee  or the  Authenticating  Agent in
conformity with the provisions of this Indenture.

         SECTION 6.04. Trustee, Authenticating  Agent, Paying  Agents,  Transfer
                       ---------------------------------------------------------
 Agents or Registrar May Own Debt Securities.
--------------------------------------------

               The Trustee or any  Authenticating  Agent or any paying  agent or
any transfer  agent or any Debt  Security  registrar,  in its  individual or any
other capacity, may become the owner or pledgee of Debt Securities with the same
rights it would have if it were not Trustee, Authenticating Agent, paying agent,
transfer agent or Debt Security registrar.

         SECTION 6.05. Moneys to be Held in Trust.
                       --------------------------

               Subject to the provisions of Section 12.04,  all moneys  received
by the  Trustee  or any  paying  agent  shall,  until  used or applied as herein
provided,  be held in trust for the  purpose for which they were  received,  but
need not be  segregated  from other funds except to the extent  required by law.
The Trustee and any paying agent shall be under no liability for interest on any
money  received by it hereunder  except as otherwise  agreed in writing with the
Company.  So long as no Event of Default shall have occurred and be  continuing,
all interest allowed on any such moneys, if any, shall be paid from time to time
to the Company upon the written order of the Company,  signed by the Chairman of
the Board of Directors,  the  President,  the Chief  Operating  Officer,  a Vice
President, the Treasurer or an Assistant Treasurer of the Company.

         SECTION 6.06. Compensation and Expenses of Trustee.
                       ------------------------------------

               The Company  covenants and agrees to pay to the Trustee from time
to time,  and the Trustee  shall be entitled to, such  compensation  as shall be
agreed to in writing  between the Company  and the Trustee  (which  shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express  trust),  and the Company  will pay or  reimburse  the Trustee  upon its
written  request  for all  documented  reasonable  expenses,  disbursements  and
advances  incurred  or  made  by  the  Trustee  in  accordance  with  any of the
provisions of this  Indenture  (including the  reasonable  compensation  and the
reasonable  expenses  and  disbursements  of its  counsel and of all Persons not
regularly in its employ) except any such expense,  disbursement  or advance that
arises from its negligence or bad faith. The Company also covenants to indemnify
each of the Trustee  (including in its individual  capacity) and any predecessor
Trustee (and its officers,  agents, directors and employees) for, and to hold it
harmless  against,  any  and all  loss,  damage,  claim,  liability  or  expense
including taxes (other than taxes based on the income of the Trustee), except to
the extent such loss,  damage,  claim,  liability  or expense  results  from the
negligence or bad faith of such indemnitee, arising out of or in connection with
the acceptance or administration of this trust, including the costs and expenses
of  defending  itself  against  any  claim or  liability  in the  premises.  The
obligations  of the Company under this Section 6.06 to compensate  and indemnify
the  Trustee  and to pay or  reimburse  the  Trustee  for  documented  expenses,
disbursements and advances shall constitute additional  indebtedness  hereunder.
Such  additional  indebtedness  shall be  secured by a lien prior to that of the
Debt  Securities upon all property and funds held or collected by the Trustee as
such,  except  funds held in trust for the benefit of the holders of  particular
Debt Securities.

               Without  prejudice to any other  rights  available to the Trustee
under  applicable law, when the Trustee incurs  expenses or renders  services in
connection with an Event of Default  specified in subsections (d), (e) or (f) of

<PAGE>

Section 5.01, the expenses (including the reasonable charges and expenses of its
counsel)  and the  compensation  for the  services  are  intended to  constitute
expenses of  administration  under any applicable  federal or state  bankruptcy,
insolvency or other similar law.

               The  provisions of this Section shall survive the  resignation or
removal  of the  Trustee  and  the  defeasance  or  other  termination  of  this
Indenture.

         SECTION 6.07. Officers' Certificate as Evidence.
                       ---------------------------------

               Except as otherwise provided in Sections 6.01 and 6.02,  whenever
in the administration of the provisions of this Indenture the Trustee shall deem
it necessary or desirable that a matter be proved or established prior to taking
or omitting any action hereunder,  such matter (unless other evidence in respect
thereof be herein specifically  prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee,  be deemed to be  conclusively  proved and
established  by an Officers'  Certificate  delivered  to the  Trustee,  and such
certificate,  in the  absence  of  negligence  or bad  faith  on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.

         SECTION 6.08. Eligibility of Trustee.
                       ----------------------

               The Trustee hereunder shall at all times be a U.S. Person that is
a banking corporation  organized and doing business under the laws of the United
States of  America or any state  thereof  or of the  District  of  Columbia  and
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least fifty  million U.S.  dollars  ($50,000,000)  and
subject to supervision or examination by federal, state, or District of Columbia
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority,  then for the purposes of this Section 6.08 the combined  capital and
surplus  of such  corporation  shall be deemed to be its  combined  capital  and
surplus as set forth in its most recent records of condition so published.

               The Company may not,  nor may any Person  directly or  indirectly
controlling,  controlled by, or under common control with the Company,  serve as
Trustee,  notwithstanding  that such corporation shall be otherwise eligible and
qualified under this Article.

               In case at any time the  Trustee  shall  cease to be  eligible in
accordance  with the  provisions of this Section 6.08,  the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.09.

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

         SECTION 6.09. Resignation or Removal of Trustee.
                       ---------------------------------

               (a) The Trustee, or any trustee or trustees hereafter  appointed,
may at any time  resign by giving  written  notice  of such  resignation  to the
Company and by mailing notice thereof,  at the Company's expense, to the holders
of the Debt  Securities  at their  addresses  as they  shall  appear on the Debt
Security Register. Upon receiving such notice of resignation,  the Company shall
promptly  appoint a  successor  trustee or trustees  by written  instrument,  in
duplicate,  executed  by order  of its  Board  of  Directors,  one copy of which
instrument  shall be  delivered  to the  resigning  Trustee  and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and have
accepted  appointment  within  30 days  after  the  mailing  of such  notice  of
resignation to the affected Securityholders,  the resigning Trustee may petition
any court of competent  jurisdiction for the appointment of a successor Trustee,
or any Securityholder who has been a bona fide holder of a Debt Security or Debt
Securities  for at least six months may,  subject to the  provisions  of Section
5.09,  on behalf of  himself  or  herself  and all  others  similarly  situated,
petition any such court for the appointment of a successor  Trustee.  Such court
may thereupon,  after such notice,  if any, as it may deem proper and prescribe,
appoint a successor Trustee.
<PAGE>

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

                    (1) the Trustee shall fail to comply with the  provisions of
               the last paragraph of Section 6.08 after written request therefor
               by the Company or by any  Securityholder who has been a bona fide
               holder of a Debt  Security  or Debt  Securities  for at least six
               months,

                    (2) the Trustee  shall  cease to be  eligible in  accordance
               with the  provisions  of  Section  6.08 and shall  fail to resign
               after  written  request  therefor  by the  Company or by any such
               Securityholder, or

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

then,  in any such  case,  the  Company  may remove the  Trustee  and  appoint a
successor Trustee by written instrument, in duplicate,  executed by order of the
Board of  Directors,  one copy of which  instrument  shall be  delivered  to the
Trustee so removed and one copy to the  successor  Trustee,  or,  subject to the
provisions of Section 5.09, if no successor Trustee shall have been so appointed
and have accepted appointment within 30 days of the occurrence of any of (1),(2)
or (3)  above,  any  Securityholder  who has been a bona  fide  holder of a Debt
Security or Debt Securities for at least six months may, on behalf of himself or
herself  and all others  similarly  situated,  petition  any court of  competent
jurisdiction  for the removal of the Trustee and the  appointment of a successor
Trustee.  Such court may  thereupon,  after such notice,  if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor Trustee.

               (c) Upon prior written notice to the Company and the Trustee, the
holders of a majority in aggregate  principal  amount of the Debt  Securities at
the time outstanding may at any time remove the Trustee and nominate a successor
Trustee,  which shall be deemed appointed as successor Trustee unless within ten
Business Days after such nomination the Company objects  thereto,  in which case
or in the case of a failure by such holders to nominate a successor Trustee, the
Trustee so  removed or any  Securityholder,  upon the terms and  conditions  and
otherwise as in subsection (a) of this Section 6.09  provided,  may petition any
court of competent jurisdiction for an appointment of a successor.

               (d) Any  resignation or removal of the Trustee and appointment of
a successor Trustee pursuant to any of the provisions of this Section 6.09 shall
become  effective upon  acceptance of  appointment  by the successor  Trustee as
provided in Section 6.10.

         SECTION 6.10. Acceptance by Successor Trustee.
                       -------------------------------

               Any successor Trustee appointed as provided in Section 6.09 shall
execute,  acknowledge and deliver to the Company and to its predecessor  Trustee
an  instrument   accepting  such  appointment   hereunder,   and  thereupon  the
resignation or removal of the retiring  Trustee shall become  effective and such
successor  Trustee,  without any further act, deed or  conveyance,  shall become
vested with all the rights,  powers,  duties and obligations with respect to the
Debt Securities of its predecessor hereunder,  with like effect as if originally
named as  Trustee  herein;  but,  nevertheless,  on the  written  request of the
Company or of the  successor  Trustee,  the Trustee  ceasing to act shall,  upon
payment of the amounts then due it pursuant to the  provisions  of Section 6.06,
execute and deliver an instrument transferring to such successor Trustee all the
rights  and powers of the  Trustee  so  ceasing  to act and shall  duly  assign,
transfer  and deliver to such  successor  Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company  shall  execute  any and all  instruments  in writing for more fully and
certainly  vesting in and confirming to such  successor  Trustee all such rights
and powers. Any Trustee ceasing to act shall,  nevertheless,  retain a lien upon
all  property or funds held or  collected  by such Trustee to secure any amounts
then due it pursuant to the provisions of Section 6.06.

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

               No successor Trustee shall accept appointment as provided in this
Section 6.10 unless at the time of such acceptance such successor  Trustee shall
be eligible under the provisions of Section 6.08.

               In no event  shall a  retiring  Trustee be liable for the acts or
omissions of any successor Trustee hereunder.

               Upon acceptance of appointment by a successor Trustee as provided
in this Section 6.10,  the Company  shall mail notice of the  succession of such
Trustee  hereunder to the holders of Debt  Securities at their addresses as they
shall appear on the Debt  Security  Register.  If the Company fails to mail such
notice  within ten Business  Days after the  acceptance  of  appointment  by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Company.

         SECTION 6.11. Succession by Merger, etc.
                       -------------------------

               Any corporation into which the Trustee may be merged or converted
or with which it may be  consolidated,  or any  corporation  resulting  from any
merger,  conversion or  consolidation  to which the Trustee shall be a party, or
any corporation  succeeding to all or  substantially  all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the  execution  or filing of any paper or any  further act on the part of any of
the parties hereto;  provided, that such corporation shall be otherwise eligible
                     --------
and qualified under this Article.

               In case at the time such  successor to the Trustee  shall succeed
to the trusts  created by this Indenture any of the Debt  Securities  shall have
been  authenticated  but not  delivered,  any such  successor to the Trustee may
adopt the certificate of authentication of any predecessor  Trustee, and deliver
such Debt Securities so authenticated;  and in case at that time any of the Debt
Securities shall not have been  authenticated,  any successor to the Trustee may
authenticate  such  Debt  Securities  either  in the  name  of  any  predecessor
hereunder or in the name of the  successor  Trustee;  and in all such cases such
certificates  shall  have  the  full  force  which  it is  anywhere  in the Debt
Securities or in this  Indenture  provided that the  certificate  of the Trustee
shall  have;  provided,  however,  that the  right to adopt the  certificate  of
              --------   -------
authentication of any predecessor Trustee or authenticate Debt Securities in the
name of any predecessor  Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.

         SECTION 6.12. Authenticating Agents.
                       ---------------------

               There may be one or more  Authenticating  Agents appointed by the
Trustee  upon the  request  of the  Company  with power to act on its behalf and
subject to its direction in the  authentication  and delivery of Debt Securities
issued upon exchange or registration of transfer thereof as fully to all intents
and  purposes  as  though  any such  Authenticating  Agent  had  been  expressly
authorized  to  authenticate  and deliver Debt  Securities;  provided,  that the
                                                             --------
Trustee  shall have no liability to the Company for any acts or omissions of the
Authenticating  Agent with  respect to the  authentication  and delivery of Debt
Securities.  Any such  Authenticating  Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any state
or territory  thereof or of the District of Columbia  authorized under such laws
to act as  Authenticating  Agent,  having a combined  capital  and surplus of at
least  $50,000,000  and being subject to  supervision or examination by federal,
state,  territorial  or  District  of Columbia  authority.  If such  corporation
publishes  reports  of  condition  at  least  annually  pursuant  to  law or the
requirements of such  authority,  then for the purposes of this Section 6.12 the

<PAGE>

combined  capital  and  surplus  of such  corporation  shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.  If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section,  it shall resign  immediately
in the manner and with the effect herein specified in this Section.

               Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated,  or any corporation resulting
from any merger,  consolidation or conversion to which any Authenticating  Agent
shall be a party, or any corporation  succeeding to all or substantially  all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such  Authenticating  Agent  hereunder,  if  such  successor  corporation  is
otherwise  eligible  under this Section 6.12 without the  execution or filing of
any  paper  or any  further  act on the  part  of the  parties  hereto  or  such
Authenticating Agent.

               Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company.  The Trustee may at any
time terminate the agency of any  Authenticating  Agent with respect to the Debt
Securities by giving written notice of termination to such Authenticating  Agent
and to the Company.  Upon  receiving such a notice of resignation or upon such a
termination,  or in case at any time any Authenticating  Agent shall cease to be
eligible  under this Section 6.12,  the Trustee may, and upon the request of the
Company shall, promptly appoint a successor  Authenticating Agent eligible under
this Section 6.12,  shall give written notice of such appointment to the Company
and shall mail notice of such  appointment to all holders of Debt  Securities as
the names and addresses of such holders  appear on the Debt  Security  Register.
Any successor  Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights,  powers,  duties and responsibilities  with
respect to the Debt Securities of its predecessor hereunder, with like effect as
if originally named as Authenticating Agent herein.

               The Company agrees to pay to any  Authenticating  Agent from time
to time reasonable compensation for its services. Any Authenticating Agent shall
have no  responsibility  or  liability  for any  action  taken  by it as such in
accordance with the directions of the Trustee.

                                   ARTICLE VII

                         CONCERNING THE SECURITYHOLDERS

         SECTION 7.01. Action by Securityholders.
                       -------------------------

               Whenever in this  Indenture it is provided  that the holders of a
specified  percentage in aggregate  principal  amount of the Debt Securities may
take any action  (including  the making of any demand or request,  the giving of
any notice,  consent or waiver or the taking of any other action), the fact that
at the time of taking any such action the holders of such  specified  percentage
have joined  therein may be  evidenced  (a) by any  instrument  or any number of
instruments  of similar tenor executed by such  Securityholders  in person or by
agent or proxy  appointed  in writing,  or (b) by the record of such  holders of
Debt Securities  voting in favor thereof at any meeting of such  Securityholders
duly called and held in accordance  with the  provisions of Article VIII, or (c)
by a combination of such instrument or instruments and any such record of such a
meeting of such  Securityholders  or (d) by any other  method the Trustee  deems
satisfactory.

               If  the  Company  shall  solicit  from  the  Securityholders  any
request,  demand,  authorization,  direction,  notice,  consent, waiver or other
action or revocation of the same,  the Company may, at its option,  as evidenced
by an  Officers'  Certificate,  fix in  advance  a record  date  for  such  Debt
Securities  for the  determination  of  Securityholders  entitled  to give  such
request,  demand,  authorization,  direction,  notice,  consent, waiver or other
action or revocation of the same, but the Company shall have no obligation to do
so.  If such a  record  date is  fixed,  such  request,  demand,  authorization,
direction, notice, consent, waiver or other action or revocation of the same may
be given before or after the record date, but only the Securityholders of record
at  the  close  of   business   on  the  record  date  shall  be  deemed  to  be
Securityholders for the purposes of determining  whether  Securityholders of the
requisite proportion of outstanding Debt Securities have authorized or agreed or
consented to such request, demand,  authorization,  direction,  notice, consent,
waiver or other  action or  revocation  of the same,  and for that  purpose  the

<PAGE>

outstanding Debt Securities  shall be computed as of the record date;  provided,
                                                                       --------
however,   that  no  such   authorization,   agreement   or   consent   by  such
-------
Securityholders  on the record  date shall be deemed  effective  unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

         SECTION 7.02. Proof of Execution by Securityholders.
                       -------------------------------------

               Subject to the provisions of Sections 6.01, 6.02 and 8.05,  proof
of the execution of any instrument by a Securityholder or such  Securityholder's
agent or proxy shall be sufficient if made in  accordance  with such  reasonable
rules and  regulations  as may be prescribed by the Trustee or in such manner as
shall be satisfactory to the Trustee.  The ownership of Debt Securities shall be
proved by the Debt Security  Register or by a  certificate  of the Debt Security
registrar.  The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.

               The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.06.

         SECTION 7.03. Who Are Deemed Absolute Owners.
                       ------------------------------

               Prior to due presentment for registration of transfer of any Debt
Security,  the Company, the Trustee, any Authenticating Agent, any paying agent,
any transfer agent and any Debt Security  registrar may deem the Person in whose
name such Debt Security shall be registered  upon the Debt Security  Register to
be, and may treat  such  Person as,  the  absolute  owner of such Debt  Security
(whether  or not  such  Debt  Security  shall be  overdue)  for the  purpose  of
receiving  payment of or on account of the  principal of,  premium,  if any, and
interest  on such Debt  Security  and for all other  purposes;  and  neither the
Company nor the Trustee nor any  Authenticating  Agent nor any paying  agent nor
any  transfer  agent nor any Debt  Security  registrar  shall be affected by any
notice to the  contrary.  All such  payments  so made to any holder for the time
being or upon such holder's order shall be valid,  and, to the extent of the sum
or sums so paid,  effectual to satisfy and  discharge  the  liability for moneys
payable upon any such Debt Security.

         SECTION 7.04. Debt Securities Owned by Company Deemed Not Outstanding.
                       -------------------------------------------------------

               In  determining  whether the holders of the  requisite  aggregate
principal amount of Debt Securities have concurred in any direction,  consent or
waiver under this Indenture,  Debt Securities  which are owned by the Company or
any other obligor on the Debt Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Debt  Securities  shall be  disregarded  and
deemed  not  to be  outstanding  for  the  purpose  of any  such  determination;
provided,  that for the  purposes of  determining  whether the Trustee  shall be
--------
protected  in  relying  on any such  direction,  consent  or  waiver,  only Debt
Securities  which a  Responsible  Officer of the Trustee  actually  knows are so
owned shall be so disregarded.  Debt Securities so owned which have been pledged
in good faith may be regarded as  outstanding  for the  purposes of this Section
7.04 if the  pledgee  shall  establish  to the  satisfaction  of the Trustee the
pledgee's  right to vote such Debt  Securities  and that the  pledgee is not the
Company or any such other obligor or Person  directly or indirectly  controlling
or controlled by or under direct or indirect  common control with the Company or
any such other obligor.  In the case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full  protection to the
Trustee.

         SECTION 7.05. Revocation of Consents; Future Holders Bound.
                       --------------------------------------------

               At any time  prior  to (but  not  after)  the  evidencing  to the
Trustee, as provided in Section 7.01, of the taking of any action by the holders
of the percentage in aggregate principal amount of the Debt Securities specified
in this Indenture in connection with such action,  any holder (in cases where no
record  date has been set  pursuant  to  Section  7.01) or any  holder  as of an
applicable  record date (in cases  where a record date has been set  pursuant to
Section  7.01) of a Debt  Security (or any Debt  Security  issued in whole or in
part in exchange or  substitution  therefor) the serial number of which is shown
by the evidence to be included in the Debt  Securities the holders of which have

<PAGE>

consented to such action may, by filing  written  notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02,  revoke such action so far as concerns  such Debt  Security  (or so far as
concerns the principal  amount  represented by any exchanged or substituted Debt
Security).  Except as aforesaid  any such action taken by the holder of any Debt
Security  shall be  conclusive  and binding upon such holder and upon all future
holders and owners of such Debt  Security,  and of any Debt  Security  issued in
exchange or  substitution  therefor  or on  registration  of  transfer  thereof,
irrespective  of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.

                                  ARTICLE VIII

                            SECURITYHOLDERS' MEETINGS

         SECTION 8.01. Purposes of Meetings.
                       --------------------

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

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

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

               (c) to consent to the  execution of an  indenture  or  indentures
supplemental hereto pursuant to the provisions of Section 9.02; or

               (d) to take  any  other  action  authorized  to be taken by or on
behalf of the holders of any specified  aggregate  principal amount of such Debt
Securities under any other provision of this Indenture or under applicable law.

         SECTION 8.02. Call of Meetings by Trustee.
                       ---------------------------

               The Trustee may at any time call a meeting of  Securityholders to
take any action  specified in Section  8.01, to be held at such time and at such
place in New York or  Wilmington,  Delaware,  as the  Trustee  shall  determine.
Notice of every meeting of the  Securityholders,  setting forth the time and the
place of such  meeting and in general  terms the action  proposed to be taken at
such meeting,  shall be mailed to holders of Debt  Securities  affected at their
addresses  as they shall  appear on the Debt  Securities  Register.  Such notice
shall be mailed  not less than 20 nor more than 180 days prior to the date fixed
for the meeting.

         SECTION 8.03. Call of Meetings by Company or Securityholders.
                       ----------------------------------------------

               In case at any time the Company  pursuant to a Board  Resolution,
or the  holders  of at  least  10% in  aggregate  principal  amount  of the Debt
Securities,  as the case may be,  then  outstanding,  shall have  requested  the
Trustee to call a meeting of  Securityholders,  by written request setting forth
in  reasonable  detail the action  proposed to be taken at the meeting,  and the
Trustee  shall not have mailed the notice of such  meeting  within 20 days after
receipt of such request,  then the Company or such Securityholders may determine
the time and the place in St. Louis, Missouri for such meeting and may call such
meeting to take any action authorized in Section 8.01, by mailing notice thereof
as provided in Section 8.02.



<PAGE>


         SECTION 8.04. Qualifications for Voting.
                       -------------------------

               To be entitled to vote at any meeting of Securityholders a Person
shall be (a) a holder of one or more Debt  Securities  with respect to which the
meeting is being held or (b) a Person  appointed by an  instrument in writing as
proxy by a holder of one or more  such Debt  Securities.  The only  Persons  who
shall be entitled  to be present or to speak at any  meeting of  Securityholders
shall be the Persons  entitled to vote at such meeting and their counsel and any
representatives  of the Trustee and its counsel and any  representatives  of the
Company and its counsel.

         SECTION 8.05. Regulations.
                       -----------

               Notwithstanding  any  other  provisions  of this  Indenture,  the
Trustee may make such  reasonable  regulations  as it may deem advisable for any
meeting of Securityholders, in regard to proof of the holding of Debt Securities
and of the  appointment of proxies,  and in regard to the appointment and duties
of inspectors of votes, the submission and examination of proxies,  certificates
and other evidence of the right to vote,  and such other matters  concerning the
conduct of the meeting as it shall deem appropriate.

               The  Trustee  shall,  by an  instrument  in  writing,  appoint  a
temporary chairman of the meeting,  unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary  chairman.  A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote at the meeting.

               Subject to the  provisions  of Section  7.04, at any meeting each
holder of Debt  Securities  with  respect to which such meeting is being held or
proxy therefor shall be entitled to one vote for each $1,000 principal amount of
Debt Securities held or represented by such holder;  provided,  however, that no
                                                     --------   -------
vote  shall be cast or counted  at any  meeting in respect of any Debt  Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding.  The chairman of the meeting shall have no right to vote other than
by virtue of Debt  Securities held by such chairman or instruments in writing as
aforesaid  duly  designating  such  chairman  as the Person to vote on behalf of
other  Securityholders.  Any meeting of Securityholders  duly called pursuant to
the  provisions of Section 8.02 or 8.03 may be adjourned  from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.

         SECTION 8.06. Voting.
                       ------

               The vote upon any resolution  submitted to any meeting of holders
of Debt  Securities with respect to which such meeting is being held shall be by
written  ballots on which shall be subscribed  the signatures of such holders or
of their  representatives  by proxy and the serial number or numbers of the Debt
Securities  held or represented  by them. The permanent  chairman of the meeting
shall  appoint  two  inspectors  of votes who shall  count all votes cast at the
meeting  for or  against  any  resolution  and who shall  make and file with the
secretary of the meeting  their  verified  written  reports in triplicate of all
votes cast at the  meeting.  A record in duplicate  of the  proceedings  of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and  affidavits by one or more Persons
having  knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 8.02.  The record
shall  show the  serial  numbers  of the Debt  Securities  voting in favor of or
against  any  resolution.  The  record  shall  be  signed  and  verified  by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates  shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee,  the latter to have attached thereto the ballots voted
at the meeting.

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



<PAGE>


         SECTION 8.07. Quorum; Actions.
                       ---------------

               The Persons entitled to vote a majority in outstanding  principal
amount  of the Debt  Securities  shall  constitute  a quorum  for a  meeting  of
Securityholders;  provided,  however,  that if any action is to be taken at such
                  --------   -------
meeting  with  respect  to  a  consent,   waiver,   request,   demand,   notice,
authorization,  direction  or other  action which may be given by the holders of
not less than a specified percentage in outstanding principal amount of the Debt
Securities,  the Persons  holding or representing  such specified  percentage in
outstanding principal amount of the Debt Securities will constitute a quorum. In
the  absence of a quorum  within 30 minutes of the time  appointed  for any such
meeting,  the meeting shall, if convened at the request of  Securityholders,  be
dissolved.  In any other case the meeting may be  adjourned  for a period of not
less than 10 days as determined  by the permanent  chairman of the meeting prior
to the  adjournment  of such  meeting.  In the  absence  of a quorum at any such
adjourned meeting,  such adjourned meeting may be further adjourned for a period
of not less than 10 days as determined by the permanent  chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice of the reconvening of
any adjourned  meeting  shall be given as provided in Section 8.02,  except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned  meeting shall state expressly the  percentage,  as provided above, of
the outstanding principal amount of the Debt Securities which shall constitute a
quorum.

               Except  as  limited  by the  proviso  in the first  paragraph  of
Section 9.02,  any resolution  presented to a meeting or adjourned  meeting duly
reconvened  at which a quorum is  present  as  aforesaid  may be  adopted by the
affirmative  vote of the  holders  of not less than a  majority  in  outstanding
principal  amount of the Debt Securities;  provided,  however,  that,  except as
                                           --------   -------
limited by the proviso in the first  paragraph of Section 9.02,  any  resolution
with respect to any consent,  waiver,  request,  demand, notice,  authorization,
direction or other action that this Indenture expressly provides may be given by
the holders of not less than a specified  percentage  in  outstanding  principal
amount  of the Debt  Securities  may be  adopted  at a meeting  or an  adjourned
meeting duly  reconvened  and at which a quorum is present as aforesaid  only by
the affirmative  vote of the holders of not less than such specified  percentage
in outstanding principal amount of the Debt Securities.

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

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

         SECTION 9.01. Supplemental   Indentures  without  Consent  of Security-
                       ---------------------------------------------------------
holders.
-------

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

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

               (b)  to  add  to  the  covenants  of  the  Company  such  further
covenants,  restrictions or conditions for the protection of the holders of Debt
Securities as the Board of Directors  shall consider to be for the protection of
the  holders  of such  Debt  Securities,  and to  make  the  occurrence,  or the
occurrence and  continuance,  of a default in any of such additional  covenants,
restrictions  or  conditions  a default  or an Event of Default  permitting  the
enforcement of all or any of the several remedies  provided in this Indenture as
herein  set forth;  provided,  however,  that in respect of any such  additional
                    --------   -------
covenant, restriction or condition such supplemental indenture may provide for a
particular  period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the Trustee
upon such default;
<PAGE>

               (c) to  cure  any  ambiguity  or to  correct  or  supplement  any
provision  contained  herein  or in  any  supplemental  indenture  which  may be
defective or inconsistent  with any other provision  contained  herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture; provided, that any such action shall not
                                        --------
adversely affect the interests of the holders of the Debt Securities;

               (d) to  add  to,  delete  from,  or  revise  the  terms  of  Debt
Securities,  including,  without limitation, any terms relating to the issuance,
exchange, registration or transfer of Debt Securities,  including to provide for
transfer procedures and restrictions  substantially  similar to those applicable
to the Capital Securities, as required by Section 2.05 (for purposes of assuring
that no  registration of Debt Securities is required under the Securities Act of
1933, as amended); provided, that any such action shall not adversely affect the
                   --------
interests  of the  holders of the Debt  Securities  then  outstanding  (it being
understood,  for purposes of this proviso,  that transfer  restrictions  on Debt
Securities substantially similar to those applicable to Capital Securities shall
not be deemed to adversely affect the holders of the Debt Securities);

               (e) to evidence  and provide for the  acceptance  of  appointment
hereunder by a successor  Trustee with respect to the Debt Securities and to add
to or change any of the  provisions  of this  Indenture as shall be necessary to
provide for or facilitate  the  administration  of the trusts  hereunder by more
than one Trustee, pursuant to the requirements of Section 6.10;

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

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

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

               Any supplemental  indenture  authorized by the provisions of this
Section 9.01 may be executed by the Company and the Trustee  without the consent
of the  holders  of  any  of  the  Debt  Securities  at  the  time  outstanding,
notwithstanding any of the provisions of Section 9.02.

SECTION 9.02. Supplemental Indentures with Consent of Securityholders.
              -------------------------------------------------------

               With the consent  (evidenced  as provided in Section 7.01) of the
holders of not less than a majority in  aggregate  principal  amount of the Debt
Securities  at the time  outstanding  affected  by such  supplemental  indenture
(voting as a class), the Company, when authorized by a Board Resolution, and the
Trustee  may from  time to time  and at any  time  enter  into an  indenture  or
indentures  supplemental  hereto (which shall  conform to the  provisions of the
Trust  Indenture  Act,  then  in  effect,  applicable  to  indentures  qualified
thereunder)  for the  purpose of adding any  provisions  to or  changing  in any
manner  or  eliminating  any of  the  provisions  of  this  Indenture  or of any
supplemental  indenture  or of modifying in any manner the rights of the holders
of the Debt Securities;  provided,  however, that no such supplemental indenture
                         --------   -------
shall without such consent of the holders of each Debt Security then outstanding
and  affected  thereby (i) extend the fixed  maturity of any Debt  Security,  or
reduce the principal amount thereof or any premium  thereon,  or reduce the rate
or extend the time of payment of interest thereon,  or reduce any amount payable
on redemption  thereof or make the principal  thereof or any interest or premium
thereon  payable in any coin or  currency  other than that  provided in the Debt
Securities,  or impair or affect the right of any  Securityholder  to  institute
suit for payment thereof or impair the right of repayment, if any, at the option

<PAGE>

of the holder,  or (ii) reduce the aforesaid  percentage of Debt  Securities the
holders of which are required to consent to any such supplemental indenture; and
provided,  further,  that if the  Debt  Securities  are  held by the  Trust or a
--------   -------
trustee of such trust, such supplemental  indenture shall not be effective until
the  holders of a majority in  liquidation  preference  of the Trust  Securities
shall have consented to such supplemental indenture;  provided, further, that if
                                                      --------  -------
the consent of the Securityholder of each outstanding Debt Security is required,
such  supplemental  indenture  shall not be  effective  until each holder of the
Trust Securities shall have consented to such supplemental indenture.

               Upon the request of the Company accompanied by a Board Resolution
authorizing  the  execution  of any such  supplemental  indenture,  and upon the
filing  with the  Trustee  of  evidence  of the  consent of  Securityholders  as
aforesaid,  the  Trustee  shall join with the Company in the  execution  of such
supplemental  indenture unless such supplemental indenture affects the Trustee's
own rights,  duties or immunities  under this  Indenture or otherwise,  in which
case the Trustee may in its  discretion,  but shall not be  obligated  to, enter
into such supplemental indenture.

               Promptly  after the  execution  by the Company and the Trustee of
any  supplemental  indenture  pursuant to the  provisions of this  Section,  the
Trustee shall transmit by mail, first class postage prepaid, a notice,  prepared
by  the  Company,   setting  forth  in  general  terms  the  substance  of  such
supplemental  indenture,  to the  Securityholders  as their names and  addresses
appear upon the Debt Security Register.  Any failure of the Trustee to mail such
notice, or any defect therein,  shall not, however,  in any way impair or affect
the validity of any such supplemental indenture.

               It shall not be necessary for the consent of the  Securityholders
under  this  Section  9.02  to  approve  the  particular  form  of any  proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.

         SECTION 9.03. Effect of Supplemental Indentures.
                       ---------------------------------

               Upon the execution of any supplemental  indenture pursuant to the
provisions  of this  Article  IX,  this  Indenture  shall be and be deemed to be
modified  and  amended  in  accordance  therewith  and  the  respective  rights,
limitations of rights,  obligations,  duties and immunities under this Indenture
of the Trustee,  the Company and the holders of Debt Securities shall thereafter
be determined,  exercised and enforced hereunder subject in all respects to such
modifications  and  amendments  and all the  terms  and  conditions  of any such
supplemental  indenture  shall  be and be  deemed  to be part of the  terms  and
conditions of this Indenture for any and all purposes.

         SECTION 9.04. Notation on Debt Securities.
                       ---------------------------

               Debt Securities  authenticated  and delivered after the execution
of any supplemental  indenture pursuant to the provisions of this Article IX may
bear a notation as to any matter provided for in such supplemental indenture. If
the Company or the Trustee shall so determine,  new Debt  Securities so modified
as to conform,  in the opinion of the Board of Directors of the Company,  to any
modification of this Indenture contained in any such supplemental  indenture may
be prepared  and executed by the  Company,  authenticated  by the Trustee or the
Authenticating  Agent and  delivered  in exchange for the Debt  Securities  then
outstanding.

         SECTION 9.05. Evidence  of  Compliance  of Supplemental Indenture to be
                       ---------------------------------------------------------
Furnished to Trustee.
--------------------

               The Trustee, subject to the provisions of Sections 6.01 and 6.02,
shall,  in  addition to the  documents  required  by Section  14.06,  receive an
Officers'  Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental  indenture  executed pursuant hereto complies with the requirements
of this  Article  IX.  The  Trustee  shall  receive  an  Opinion  of  Counsel as
conclusive  evidence that any supplemental  indenture  executed pursuant to this
Article IX is  authorized  or  permitted  by, and conforms to, the terms of this
Article IX and that it is proper for the Trustee  under the  provisions  of this
Article IX to join in the execution thereof.
<PAGE>

                                    ARTICLE X

                            REDEMPTION OF SECURITIES

         SECTION 10.01. Optional Redemption.
                        -------------------

               At any time the  Company  shall  have the  right,  subject to the
receipt by the  Company of prior  approval  from the  Federal  Reserve,  if then
required under applicable capital guidelines or policies of the Federal Reserve,
to redeem the Debt  Securities,  in whole or in part, on any April 22 or October
22 on or after April 22, 2007 (the "Redemption Date"), at the Redemption Price.

         SECTION 10.02. Special Event Redemption.
                        ------------------------

               If a Special  Event  shall occur and be  continuing,  the Company
shall have the right,  subject to the receipt by the  Company of prior  approval
from the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve, to redeem the Debt Securities, in whole but not
in part,  at any time within 90 days  following  the  occurrence of such Special
Event (the "Special Redemption Date"), at the Special Redemption Price.

         SECTION 10.03. Notice of Redemption; Selection of Debt Securities.
                        --------------------------------------------------

               In case the Company  shall desire to exercise the right to redeem
all,  or, as the case may be,  any part of the Debt  Securities,  it shall fix a
date for redemption  and shall mail a notice of such  redemption at least 30 and
not more than 60 days prior to the date fixed for  redemption  to the holders of
Debt  Securities so to be redeemed as a whole or in part at their last addresses
as the same appear on the Debt Security Register. Such mailing shall be by first
class  mail.  The  notice if  mailed  in the  manner  herein  provided  shall be
conclusively  presumed  to have  been  duly  given,  whether  or not the  holder
receives  such notice.  In any case,  failure to give such notice by mail or any
defect  in the  notice  to  the  holder  of any  Debt  Security  designated  for
redemption  as a  whole  or in  part  shall  not  affect  the  validity  of  the
proceedings for the redemption of any other Debt Security.

               Each such notice of redemption shall specify the CUSIP number, if
any, of the Debt Securities to be redeemed,  the date fixed for redemption,  the
redemption  price at which  Debt  Securities  are to be  redeemed,  the place or
places of payment,  that payment will be made upon presentation and surrender of
such Debt  Securities,  that interest  accrued to the date fixed for  redemption
will be paid as  specified  in said  notice,  and that on and  after  said  date
interest thereon or on the portions thereof to be redeemed will cease to accrue.
If less than all the Debt Securities are to be redeemed the notice of redemption
shall  specify the numbers of the Debt  Securities  to be redeemed.  In case the
Debt Securities are to be redeemed in part only, the notice of redemption  shall
state the portion of the principal amount thereof to be redeemed and shall state
that on and after the date fixed for  redemption,  upon  surrender  of such Debt
Security,  a new Debt Security or Debt  Securities in principal  amount equal to
the unredeemed portion thereof will be issued.

               Prior to 10:00 a.m. New York City time on the Redemption  Date or
the Special  Redemption  Date  specified  in the notice of  redemption  given as
provided in this Section,  the Company will deposit with the Trustee or with one
or more paying agents an amount of money  sufficient to redeem on the redemption
date all the  Debt  Securities  so  called  for  redemption  at the  appropriate
redemption  price,  together  with  accrued  interest  to  the  date  fixed  for
redemption.

               The  Company  will give the  Trustee  notice not less than 45 nor
more than 60 days prior to the  redemption  date as to the  redemption  price at
which the Debt Securities are to be redeemed and the aggregate  principal amount
of Debt  Securities to be redeemed and the Trustee shall select,  in such manner
as in its  sole  discretion  it  shall  deem  appropriate  and  fair,  the  Debt
Securities or portions thereof (in integral multiples of $1,000) to be redeemed.



<PAGE>


         SECTION 10.04. Payment of Debt Securities Called for Redemption.
                        ------------------------------------------------

               If notice of  redemption  has been given as  provided  in Section
10.03,  the Debt Securities or portions of Debt Securities with respect to which
such notice has been given shall become due and payable on the  Redemption  Date
or the Special  Redemption  Date (as the case may be) and at the place or places
stated in such notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption,  and on and after said Redemption Date
or the Special  Redemption Date (unless the Company shall default in the payment
of such Debt Securities at the redemption price,  together with interest accrued
to said date) interest on the Debt  Securities or portions of Debt Securities so
called for redemption  shall cease to accrue.  On presentation  and surrender of
such Debt Securities at a place of payment  specified in said notice,  such Debt
Securities or the specified  portions  thereof shall be paid and redeemed by the
Company at the  applicable  redemption  price,  together with  interest  accrued
thereon to the Redemption  Date or the Special  Redemption Date (as the case may
be).

               Upon presentation of any Debt Security redeemed in part only, the
Company shall execute and the Trustee shall  authenticate and make available for
delivery  to the  holder  thereof,  at the  expense of the  Company,  a new Debt
Security or Debt  Securities of  authorized  denominations  in principal  amount
equal to the unredeemed portion of the Debt Security so presented.

                                   ARTICLE XI

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

         SECTION 11.01. Company May Consolidate, etc., on Certain Terms.
                        -----------------------------------------------

               Nothing  contained in this  Indenture  or in the Debt  Securities
shall prevent any  consolidation or merger of the Company with or into any other
corporation  or  corporations  (whether or not  affiliated  with the Company) or
successive  consolidations  or mergers in which the Company or its  successor or
successors shall be a party or parties,  or shall prevent any sale,  conveyance,
transfer or other disposition of the property or capital stock of the Company or
its successor or successors as an entirety,  or substantially as an entirety, to
any other  corporation  (whether  or not  affiliated  with the  Company,  or its
successor or successors)  authorized to acquire and operate the same;  provided,
                                                                       --------
however,  that the  Company  hereby  covenants  and agrees  that,  upon any such
-------
consolidation,  merger  (where the  Company is not the  surviving  corporation),
sale, conveyance, transfer or other disposition, the due and punctual payment of
the  principal  of  (and  premium,  if  any)  and  interest  on all of the  Debt
Securities in accordance with their terms, according to their tenor, and the due
and punctual  performance  and observance of all the covenants and conditions of
this  Indenture  to be kept or  performed  by the  Company,  shall be  expressly
assumed by supplemental indenture reasonably satisfactory in form to the Trustee
executed  and   delivered   to  the  Trustee  by  the  entity   formed  by  such
consolidation,  or into  which the  Company  shall have been  merged,  or by the
entity which shall have acquired such property or capital stock.

         SECTION 11.02. Successor Entity to be Substituted.
                        ----------------------------------

               In case of any  such  consolidation,  merger,  sale,  conveyance,
transfer or other  disposition and upon the assumption by the successor  entity,
by supplemental indenture,  executed and delivered to the Trustee and reasonably
satisfactory  in form to the  Trustee,  of the due and  punctual  payment of the
principal of and premium, if any, and interest on all of the Debt Securities and
the due and punctual  performance  and  observance  of all of the  covenants and
conditions  of this  Indenture to be performed or observed by the Company,  such
successor  entity shall succeed to and be substituted for the Company,  with the
same effect as if it had been named herein as the  Company,  and  thereupon  the
predecessor  entity  shall be relieved of any further  liability  or  obligation
hereunder or upon the Debt Securities. Such successor entity thereupon may cause
to be  signed,  and  may  issue  either  in its own  name or in the  name of the
Company,  any or all of the Debt Securities issuable hereunder which theretofore
shall not have been signed by the Company  and  delivered  to the Trustee or the
Authenticating  Agent;  and, upon the order of such successor  entity instead of
the Company and subject to all the terms,  conditions  and  limitations  in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and  deliver any Debt  Securities  which  previously  shall have been signed and
delivered by the officers of the Company,  to the Trustee or the  Authenticating
Agent for  authentication,  and any Debt Securities  which such successor entity
thereafter  shall  cause  to be  signed  and  delivered  to the  Trustee  or the
Authenticating  Agent for that purpose.  All the Debt Securities so issued shall

<PAGE>

in all respects have the same legal rank and benefit under this Indenture as the
Debt Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Debt Securities had been issued at the date
of the execution hereof.

         SECTION 11.03. Opinion of Counsel to be Given to Trustee.
                        -----------------------------------------

               The Trustee, subject to the provisions of Sections 6.01 and 6.02,
shall receive,  in addition to the Opinion of Counsel  required by Section 9.05,
an Opinion of Counsel as  conclusive  evidence that any  consolidation,  merger,
sale, conveyance,  transfer or other disposition, and any assumption,  permitted
or required by the terms of this Article XI complies with the provisions of this
Article XI.

                                   ARTICLE XII

                     SATISFACTION AND DISCHARGE OF INDENTURE

         SECTION 12.01. Discharge of Indenture.
                        ----------------------

               When  (a)  the   Company   shall   deliver  to  the  Trustee  for
cancellation all Debt Securities theretofore  authenticated (other than any Debt
Securities which shall have been destroyed,  lost or stolen and which shall have
been replaced or paid as provided in Section 2.06) and not theretofore canceled,
or (b) all the Debt  Securities  not  theretofore  canceled or  delivered to the
Trustee  for  cancellation  shall have become due and  payable,  or are by their
terms  to  become  due and  payable  within  one  year or are to be  called  for
redemption  within one year under  arrangements  satisfactory to the Trustee for
the giving of notice of  redemption,  and the  Company  shall  deposit  with the
Trustee, in trust, funds, which shall be immediately due and payable, sufficient
to pay at maturity or upon redemption all of the Debt Securities (other than any
Debt Securities which shall have been destroyed,  lost or stolen and which shall
have been replaced or paid as provided in Section 2.06) not theretofore canceled
or delivered to the Trustee for cancellation,  including  principal and premium,
if any, and interest due or to become due to such date of maturity or redemption
date, as the case may be, but excluding,  however,  the amount of any moneys for
the  payment of  principal  of, and  premium,  if any,  or  interest on the Debt
Securities  (1)  theretofore  repaid  to the  Company  in  accordance  with  the
provisions  of Section  12.04,  or (2) paid to any state or to the  District  of
Columbia pursuant to its unclaimed  property or similar laws, and if in the case
of either  clause  (a) or clause (b) the  Company  shall also pay or cause to be
paid all other sums payable hereunder by the Company,  then this Indenture shall
cease to be of further effect except for the provisions of Sections 2.05,  2.06,
3.01, 3.02,  3.04,  6.06, 6.09 and 12.04 hereof,  which shall survive until such
Debt Securities shall mature or are redeemed,  as the case may be, and are paid.
Thereafter,  Sections 6.06,  6.09 and 12.04 shall survive,  and the Trustee,  on
demand of the Company accompanied by an Officers'  Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied with, and
at the cost  and  expense  of the  Company,  shall  execute  proper  instruments
acknowledging  satisfaction  of and  discharging  this  Indenture,  the Company,
however,  hereby  agreeing  to  reimburse  the Trustee for any costs or expenses
thereafter  reasonably and properly  incurred by the Trustee in connection  with
this Indenture or the Debt Securities.

         SECTION 12.02. Deposited Moneys to be Held in Trust by Trustee.
                        -----------------------------------------------

               Subject to the provisions of Section 12.04,  all moneys deposited
with the Trustee pursuant to Section 12.01 shall be held in trust and applied by
it to the payment,  either  directly or through any paying agent  (including the
Company if acting as its own paying  agent),  to the  holders of the  particular
Debt  Securities  for the payment of which such moneys have been  deposited with
the  Trustee,  of all sums due and to become  due  thereon  for  principal,  and
premium, if any, and interest.



<PAGE>


         SECTION 12.03. Paying Agent to Repay Moneys Held.
                        ---------------------------------

               Upon the satisfaction and discharge of this Indenture, all moneys
then held by any paying  agent of the Debt  Securities  (other than the Trustee)
shall,  upon  demand of the  Company,  be repaid to the  Company  or paid to the
Trustee,  and  thereupon  such paying  agent shall be released  from all further
liability with respect to such moneys.

         SECTION 12.04. Return of Unclaimed Moneys.
                        --------------------------

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

                                  ARTICLE XIII

                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

         SECTION 13.01. Indenture   and   Debt   Securities   Solely   Corporate
                        --------------------------------------------------------
Obligations.
-----------

               No recourse for the payment of the  principal  of or premium,  if
any,  or  interest  on any Debt  Security,  or for any claim  based  thereon  or
otherwise  in respect  thereof,  and no recourse  under or upon any  obligation,
covenant or  agreement of the Company in this  Indenture or in any  supplemental
indenture,  or in any such Debt  Security,  or  because of the  creation  of any
indebtedness  represented  thereby,  shall  be  had  against  any  incorporator,
stockholder,  officer,  director,  employee or agent, as such, past,  present or
future,  of the Company or of any  predecessor  or successor  corporation of the
Company,  either directly or through the Company or any successor corporation of
the Company,  whether by virtue of any constitution,  statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby  expressly waived and released as a
condition of, and as a  consideration  for, the execution of this  Indenture and
the issue of the Debt Securities.

                                   ARTICLE XIV

                            MISCELLANEOUS PROVISIONS

         SECTION 14.01. Successors.
                        ----------

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

         SECTION 14.02. Official Acts by Successor Entity.
                        ---------------------------------

               Any  act  or  proceeding  by  any  provision  of  this  Indenture
authorized  or  required  to be done or  performed  by any board,  committee  or
officer of the Company shall and may be done and  performed  with like force and
effect by the like board,  committee,  officer or other authorized Person of any
entity that shall at the time be the lawful successor of the Company.

         SECTION 14.03. Surrender of Company Powers.
                        ---------------------------

               The Company by instrument in writing executed by authority of 2/3
(two-thirds)  of its  Board  of  Directors  and  delivered  to the  Trustee  may
surrender any of the powers  reserved to the Company and thereupon such power so
surrendered  shall  terminate  both as to the  Company  and as to any  permitted
successor.
<PAGE>

         SECTION 14.04. Addresses for Notices, etc.
                        --------------------------

               Any notice or demand which by any provision of this  Indenture is
required  or  permitted  to be  given  or  served  by  the  Trustee  or  by  the
Securityholders  on the  Company  may be given or  served  in  writing  by being
deposited  postage  prepaid by  registered  or  certified  mail in a post office
letter box  addressed  (until  another  address is filed by the Company with the
Trustee for such purpose) to the Company at:

                  600 James S. McDonnell Blvd., Mail Code #014
                  Hazelwood, MO 63042
                  Attention: Allen H. Blake


               Any notice, direction, request or demand by any Securityholder or
the  Company to or upon the  Trustee  shall be deemed to have been  sufficiently
given or made,  for all  purposes,  if given or made in writing at the office of
Wilmington Trust Company at:

                  Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890
                  Attention: Corporate Trust Administration

         SECTION 14.05. Governing Law.
                        -------------

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

         SECTION 14.06. Evidence of Compliance with Conditions Precedent.
                        ------------------------------------------------

               Upon any  application  or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers'  Certificate  stating that in the opinion of
the signers all  conditions  precedent,  if any,  provided for in this Indenture
relating  to the  proposed  action  have been  complied  with and an  Opinion of
Counsel  stating  that,  in the  opinion of such  counsel,  all such  conditions
precedent  have been  complied  with  (except that no such Opinion of Counsel is
required to be furnished to the Trustee in  connection  with the  authentication
and issuance of Debt Securities issued on the date of this Indenture).

               Each  certificate  or opinion  provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided  for in this  Indenture  (except  certificates  delivered  pursuant  to
Section  3.05)  shall  include  (a) a  statement  that the  person  making  such
certificate  or  opinion  has  read  such  covenant  or  condition;  (b) a brief
statement as to the nature and scope of the  examination or  investigation  upon
which the  statements or opinions  contained in such  certificate or opinion are
based;  (c) a statement that, in the opinion of such person,  he or she has made
such  examination  or  investigation  as is  necessary  to enable  him or her 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 or not, in the opinion of
such person, such condition or covenant has been complied with.

         SECTION 14.07. Non-Business Days.
                        -----------------

               In any case where the date of payment of interest on or principal
of the Debt Securities is not a Business Day, the payment of such interest on or
principal of the Debt  Securities  need not be made on such date but may be made
on the next  succeeding  Business Day, with the same force and effect as if made

<PAGE>

on the date of payment  and no  interest  shall  accrue for the period  from and
after such date, except if such Business Day is in the next succeeding  calendar
year, such payment will be made on the immediately preceding Business Day.

         SECTION 14.08. Table of Contents, Headings, etc.
                        --------------------------------

               The table of contents and the titles and headings of the articles
and sections of this Indenture  have been inserted for  convenience of reference
only,  are not to be  considered  a part  hereof,  and shall in no way modify or
restrict any of the terms or provisions hereof.

         SECTION 14.09. Execution in Counterparts.
                        -------------------------

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

         SECTION 14.10. Separability.
                        ------------

               In  case  any one or more  of the  provisions  contained  in this
Indenture or in the Debt Securities  shall for any reason be held to be invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other  provisions of this Indenture or of
such Debt  Securities,  but this  Indenture  and such Debt  Securities  shall be
construed as if such  invalid or illegal or  unenforceable  provision  had never
been contained herein or therein.

         SECTION 14.11. Assignment.
                        ----------

               Subject to Article  11,  the  Company  will have the right at all
times to assign  any of its rights or  obligations  under  this  Indenture  to a
direct or indirect wholly owned  Subsidiary of the Company,  provided,  that, in
                                                             --------
the event of any such  assignment,  the Company will remain  liable for all such
obligations. Subject to the foregoing, this Indenture is binding upon and inures
to the  benefit  of the  parties  hereto  and their  respective  successors  and
assigns. This Indenture may not otherwise be assigned by the parties thereto.

         SECTION 14.12. Acknowledgment of Rights.
                        ------------------------

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



<PAGE>


                                   ARTICLE XV

                        SUBORDINATION OF DEBT SECURITIES

         SECTION 15.01. Agreement to Subordinate.
                        ------------------------

               The  Company  covenants  and  agrees,  and  each  holder  of Debt
Securities   issued  hereunder  and  under  any   supplemental   indenture  (the
"Additional  Provisions") by such  Securityholder's  acceptance thereof likewise
covenants and agrees,  that all Debt  Securities  shall be issued subject to the
provisions of this Article XV; and each holder of a Debt Security,  whether upon
original issue or upon transfer or assignment thereof,  accepts and agrees to be
bound by such provisions.

               The payment by the Company of the principal  of, and premium,  if
any,  and  interest  on all Debt  Securities  issued  hereunder  and  under  any
Additional  Provisions  shall,  to the extent and in the manner  hereinafter set
forth,  be junior and  subordinated in all respects to the prior payment in full
of all Senior  Indebtedness of the Company,  whether  outstanding at the date of
this Indenture or thereafter incurred.

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

         SECTION 15.02. Default on Senior Indebtedness.
                        ------------------------------

               In the event and during the  continuation  of any  default by the
Company in the payment of principal,  premium, interest or any other payment due
on any Senior Indebtedness of the Company following any applicable grace period,
or in the event that the maturity of any Senior  Indebtedness of the Company has
been  accelerated  because  of a  default,  and such  acceleration  has not been
rescinded  or canceled  and such Senior  Indebtedness  has not been paid in full
then,  in either case,  no payment  shall be made by the Company with respect to
the principal of, or premium, if any, or interest on the Debt Securities.

               In the event that,  notwithstanding  the  foregoing,  any payment
shall be  received  by the  Trustee  when  such  payment  is  prohibited  by the
preceding  paragraph  of this Section  15.02,  such  payment  shall,  subject to
Section  15.06,  be held in trust for the  benefit of, and shall be paid over or
delivered  to,  the  holders  of  Senior   Indebtedness   or  their   respective
representatives,  or to the trustee or trustees under any indenture  pursuant to
which any of such Senior  Indebtedness may have been issued, as their respective
interests  may  appear,  but only to the extent  that the  holders of the Senior
Indebtedness (or their  representative or  representatives  or a trustee) notify
the Trustee in writing  within 90 days of such  payment of the amounts  then due
and owing on the Senior  Indebtedness  and only the  amounts  specified  in such
notice to the Trustee shall be paid to the holders of Senior Indebtedness.

         SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
                        ------------------------------------

               Upon any payment by the Company or  distribution of assets of the
Company of any kind or character,  whether in cash,  property or securities,  to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company,  whether  voluntary or involuntary  or in  bankruptcy,  insolvency,
receivership or other proceedings,  all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment  thereof  provided for in
money in accordance with its terms, before any payment is made by the Company on
account  of the  principal  (and  premium,  if  any)  or  interest  on the  Debt
Securities;  and upon any such  dissolution  or  winding-up  or  liquidation  or
reorganization,  any payment by the Company,  or  distribution  of assets of the
Company of any kind or character,  whether in cash,  property or securities,  to
which the  Securityholders  or the Trustee would be entitled to receive from the
Company,  except for the  provisions  of this  Article XV,  shall be paid by the
Company, or by any receiver,  trustee in bankruptcy,  liquidating trustee, agent
or other Person making such payment or distribution,  or by the  Securityholders
or by the Trustee  under this  Indenture if received by them or it,  directly to
the holders of Senior  Indebtedness  of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such holders,
as calculated by the Company) or their representative or representatives,  or to

<PAGE>

the trustee or trustees  under any indenture  pursuant to which any  instruments
evidencing such Senior  Indebtedness  may have been issued,  as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth,  after giving effect to any concurrent  payment
or  distribution to or for the holders of such Senior  Indebtedness,  before any
payment or distribution is made to the Securityholders.

               In the event that,  notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities,  prohibited by the  foregoing,  shall be received by the
Trustee  before  all Senior  Indebtedness  of the  Company  is paid in full,  or
provision is made for such payment in money in accordance  with its terms,  such
payment or  distribution  shall be held in trust for the benefit of and shall be
paid over or  delivered  to the  holders of such  Senior  Indebtedness  or their
representative  or  representatives,  or to the  trustee or  trustees  under any
indenture pursuant to which any instruments  evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company,  for  application to the payment of all Senior  Indebtedness of the
Company remaining unpaid to the extent necessary to pay such Senior Indebtedness
in full in money in  accordance  with its  terms,  after  giving  effect  to any
concurrent  payment or distribution to or for the benefit of the holders of such
Senior Indebtedness.

               For  purposes of this  Article XV, the words  "cash,  property or
securities"  shall not be deemed to  include  shares of stock of the  Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization  or readjustment,  the payment of which
is  subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided, that (a) such Senior Indebtedness
is  assumed  by  the  new   corporation,   if  any,   resulting  from  any  such
reorganization or readjustment, and (b) the rights of the holders of such Senior
Indebtedness  are not,  without  the  consent of such  holders,  altered by such
reorganization  or readjustment.  The  consolidation of the Company with, or the
merger  of  the  Company  into,  another   corporation  or  the  liquidation  or
dissolution of the Company  following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions  provided for in Article IX of this Indenture  shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of  this  Section  15.03  if such  other  corporation  shall,  as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article IX of this  Indenture.  Nothing in Section  15.02 or in this  Section
15.03 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.06 of this Indenture.

         SECTION 15.04. Subrogation.
                        -----------

               Subject to the payment in full of all Senior  Indebtedness of the
Company, the Securityholders shall be subrogated to the rights of the holders of
such Senior  Indebtedness to receive payments or distributions of cash, property
or securities of the Company  applicable to such Senior  Indebtedness  until the
principal of (and premium,  if any) and interest on the Debt Securities shall be
paid in  full;  and,  for the  purposes  of such  subrogation,  no  payments  or
distributions to the holders of such Senior  Indebtedness of any cash,  property
or  securities  to which the  Securityholders  or the Trustee  would be entitled
except for the  provisions  of this Article XV, and no payment over  pursuant to
the  provisions  of this Article XV to or for the benefit of the holders of such
Senior  Indebtedness by  Securityholders  or the Trustee,  shall, as between the
Company, its creditors other than holders of Senior Indebtedness of the Company,
and the holders of the Debt Securities be deemed to be a payment or distribution
by the Company to or on account of such Senior  Indebtedness.  It is  understood
that the  provisions  of this  Article  XV are and are  intended  solely for the
purposes of defining the relative rights of the holders of the Debt  Securities,
on the one hand, and the holders of such Senior Indebtedness, on the other hand.

               Nothing  contained  in  this  Article  XV or  elsewhere  in  this
Indenture, any Additional Provisions or in the Debt Securities is intended to or
shall impair,  as between the Company,  its creditors  other than the holders of
Senior Indebtedness of the Company, and the holders of the Debt Securities,  the
obligation of the Company,  which is absolute and  unconditional,  to pay to the
holders  of the Debt  Securities  the  principal  of (and  premium,  if any) and
interest  on the Debt  Securities  as and when the  same  shall  become  due and
payable in  accordance  with their terms,  or is intended to or shall affect the
relative  rights of the  holders of the Debt  Securities  and  creditors  of the

<PAGE>

Company, other than the holders of Senior Indebtedness of the Company, nor shall
anything  herein  or  therein  prevent  the  Trustee  or the  holder of any Debt
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture,  subject to the rights, if any, under this Article
XV of the holders of such Senior  Indebtedness  in respect of cash,  property or
securities of the Company received upon the exercise of any such remedy.

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

         SECTION 15.05. Trustee to Effectuate Subordination.
                        -----------------------------------

               Each Securityholder by such  Securityholder's  acceptance thereof
authorizes and directs the Trustee on such Securityholder's  behalf to take such
action as may be  necessary  or  appropriate  to  effectuate  the  subordination
provided  in this  Article XV and  appoints  the Trustee  such  Securityholder's
attorney-in-fact for any and all such purposes.

         SECTION 15.06. Notice by the Company.
                        ---------------------

               The Company  shall give prompt  written  notice to a  Responsible
Officer of the Trustee at the Principal  Office of the Trustee of any fact known
to the Company that would  prohibit the making of any payment of moneys to or by
the Trustee in respect of the Debt Securities pursuant to the provisions of this
Article  XV.  Notwithstanding  the  provisions  of this  Article XV or any other
provision of this Indenture or any Additional Provisions,  the Trustee shall not
be charged with  knowledge of the existence of any facts that would prohibit the
making of any  payment  of moneys to or by the  Trustee  in  respect of the Debt
Securities  pursuant to the  provisions  of this Article XV,  unless and until a
Responsible  Officer of the Trustee at the Principal Office of the Trustee shall
have received  written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor;  and before the receipt of any
such written  notice,  the Trustee,  subject to the  provisions of Article VI of
this  Indenture,  shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
       --------  -------
provided for in this Section  15.06 at least two Business Days prior to the date
upon  which by the terms  hereof any money may become  payable  for any  purpose
(including,  without limitation, the payment of the principal of (or premium, if
any) or interest on any Debt Security),  then,  anything herein contained to the
contrary  notwithstanding,  the Trustee  shall have full power and  authority to
receive  such  money and to apply the same to the  purposes  for which they were
received,  and shall not be affected by any notice to the  contrary  that may be
received by it within two Business Days prior to such date.

               The  Trustee,  subject  to the  provisions  of Article VI of this
Indenture,  shall be entitled to  conclusively  rely on the  delivery to it of a
written  notice by a Person  representing  himself  or herself to be a holder of
Senior  Indebtedness of the Company (or a trustee or representative on behalf of
such  holder) to  establish  that such notice has been given by a holder of such
Senior  Indebtedness or a trustee or representative on behalf of any such holder
or holders.  In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior  Indebtedness to participate in any payment or  distribution  pursuant to
this Article XV, the Trustee may request such Person to furnish  evidence to the
reasonable  satisfaction  of  the  Trustee  as to  the  amount  of  such  Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such  Person  under this  Article  XV,  and,  if such  evidence is not
furnished,  the Trustee may defer any  payment to such Person  pending  judicial
determination as to the right of such Person to receive such payment.
<PAGE>

         SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness.
                        -----------------------------------------------------

               The Trustee in its  individual  capacity shall be entitled to all
the rights set forth in this Article XV in respect of any Senior Indebtedness at
any  time  held  by it,  to the  same  extent  as any  other  holder  of  Senior
Indebtedness,  and nothing in this Indenture or any Additional  Provisions shall
deprive the Trustee of any of its rights as such holder.

               With  respect  to  the  holders  of  Senior  Indebtedness  of the
Company,  the  Trustee  undertakes  to perform  or to  observe  only such of its
covenants and obligations as are  specifically set forth in this Article XV, and
no implied  covenants or obligations  with respect to the holders of such Senior
Indebtedness  shall be read into this  Indenture  or any  Additional  Provisions
against the Trustee. The Trustee shall not owe or be deemed to owe any fiduciary
duty to the holders of such Senior  Indebtedness  and, subject to the provisions
of Article VI of this  Indenture,  the Trustee shall not be liable to any holder
of such Senior  Indebtedness if it shall pay over or deliver to Securityholders,
the  Company  or any other  Person  money or assets to which any  holder of such
Senior Indebtedness shall be entitled by virtue of this Article XV or otherwise.

               Nothing in this  Article XV shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.06.

         SECTION 15.08. Subordination May Not Be Impaired.
                        ---------------------------------

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

               Without  in any way  limiting  the  generality  of the  foregoing
paragraph,  the holders of Senior  Indebtedness  of the Company may, at any time
and from time to time,  without  the  consent of or notice to the Trustee or the
Securityholders,  without incurring  responsibility to the  Securityholders  and
without impairing or releasing the subordination  provided in this Article XV or
the  obligations  hereunder of the holders of the Debt Securities to the holders
of such Senior Indebtedness, do any one or more of the following: (a) change the
manner,  place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness,  or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument  evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (b) sell, exchange, release
or otherwise  deal with any property  pledged,  mortgaged or otherwise  securing
such Senior  Indebtedness;  (c) release any Person  liable in any manner for the
collection  of such  Senior  Indebtedness;  and (d)  exercise  or  refrain  from
exercising any rights against the Company, and any other Person.

               Wilmington  Trust  Company,  in its  capacity as Trustee,  hereby
accepts the trusts in this Indenture  declared and provided,  upon the terms and
conditions herein above set forth.


<PAGE>



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

                                     FIRST BANKS, INC.


                                     By /s/     Allen H. Blake
                                        ----------------------------------------
                                         Name:  Allen H. Blake
                                         Title: President and Chief Operating
                                                Officer


                                     WILMINGTON TRUST COMPANY, as Trustee


                                     By /s/     Anita E. Dallago
                                        ----------------------------------------
                                         Name:  Anita E. Dallago
                                         Title: Senior Financial Services
                                                Officer


<PAGE>




                                                                       EXHIBIT A

        FORM OF FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITY DUE 2032

                           [FORM OF FACE OF SECURITY]

       THIS SECURITY HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS OR ANY OTHER
APPLICABLE   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 ONLY
(A) TO THE COMPANY,  (B) PURSUANT TO RULE 144A UNDER THE  SECURITIES  ACT ("RULE
144A"), TO A PERSON THE HOLDER 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,  (C)  PURSUANT TO AN  EXEMPTION
FROM REGISTRATION TO AN "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 AN  "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 (D)
PURSUANT TO ANOTHER  AVAILABLE  EXEMPTION FROM THE REGISTRATION  REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION
OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER  INFORMATION  SATISFACTORY  TO  IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE  HEREOF AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.

       THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE  HEREOF AGREES,  REPRESENTS
AND  WARRANTS  THAT IT WILL NOT ENGAGE IN HEDGING  TRANSACTIONS  INVOLVING  THIS
SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

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

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

       THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING
A PRINCIPAL  AMOUNT OF NOT LESS THAN  $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF.  ANY ATTEMPTED  TRANSFER OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL
AMOUNT OF LESS THAN  $100,000  SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER.  ANY SUCH PURPORTED  TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF THIS SECURITY FOR ANY PURPOSE,  INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

       THIS  OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES
OR ANY  AGENCY OR FUND OF THE  UNITED  STATES,  INCLUDING  THE  FEDERAL  DEPOSIT
INSURANCE  CORPORATION  (THE "FDIC").  THIS  OBLIGATION IS  SUBORDINATED  TO THE
CLAIMS OF  DEPOSITORS  AND THE CLAIMS OF GENERAL  AND SECURED  CREDITORS  OF THE
COMPANY,  IS INELIGIBLE  AS  COLLATERAL  FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.


<PAGE>



            Floating Rate Junior Subordinated Debt Security due 2032

                                       of

                                FIRST BANKS, INC.

       First Banks,  Inc., a bank holding company  incorporated in Missouri (the
"Company"),  for value received promises to pay to Wilmington Trust Company, not
in its individual  capacity but solely as  Institutional  Trustee for First Bank
Capital Trust, a Delaware  statutory business trust (the "Holder") or registered
assigns,  the principal  sum of Twenty Five Million  Seven Hundred  Seventy Four
Thousand  Dollars  ($25,774,000)  on April 22, 2032, and to pay interest on said
principal sum from April 10, 2002, or from the most recent interest payment date
(each such date, an "Interest  Payment Date") to which interest has been paid or
duly provided for, semi-annually (subject to deferral as set forth herein) in
arrears on April 22 and October 22 of each year commencing  October 22, 2002, at
a  variable  per annum rate equal to LIBOR (as  defined in the  Indenture)  plus
3.875% (the "Interest Rate")  (provided,  that the applicable  Interest Rate may
                               --------
not exceed  11.00%  through the  Interest  Payment Date in April 2007) until the
principal hereof shall have become due and payable, and on any overdue principal
and  (without  duplication  and to the extent that  payment of such  interest is
enforceable  under applicable law) on any overdue  installment of interest at an
annual rate equal to the Interest Rate in effect for each such Extension  Period
compounded semi-annually. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day  year and the actual  number of
days  elapsed in the  relevant  interest  period.  In the event that any date on
which the  principal  or  interest  is  payable on this Debt  Security  is not a
Business  Day,  then  payment  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. The interest  installment so payable,  and punctually paid or duly
provided for, on any Interest  Payment Date will, as provided in the  Indenture,
be  paid  to the  Person  in  whose  name  this  Debt  Security  (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the close
of business on the regular  record date for such  interest  installment,  except
that  interest and any Deferred  Interest  payable on the Maturity Date shall be
paid to the Person to whom principal is paid. Any such interest  installment not
punctually  paid or duly provided for shall forthwith cease to be payable to the
registered  holders on such regular record date and may be paid to the Person in
whose name this Debt Security (or one or more  Predecessor  Debt  Securities) is
registered at the close of business on a special  record date to be fixed by the
Trustee for the payment of such  defaulted  interest,  notice  whereof  shall be
given to the  registered  holders of the Debt  Securities  not less than 10 days
prior to such special  record date, all as more fully provided in the Indenture.
The  principal  of and  interest on this Debt  Security  shall be payable at the
office or agency of the Trustee (or other paying agent appointed by the Company)
maintained  for that  purpose in any coin or  currency  of the United  States of
America  that at the time of payment is legal  tender for  payment of public and
private debts;  provided,  however,  that payment of interest may be made at the
                --------   -------
option of the Company by check mailed to the  registered  holder at such address
as shall appear in the Debt Security  Register or by wire transfer to an account
appropriately designated by the holder hereof. Notwithstanding the foregoing, so
long as the  holder of this Debt  Security  is the  Institutional  Trustee,  the
payment of the  principal of and interest on this Debt  Security will be made in
immediately  available  funds  at  such  place  and to  such  account  as may be
designated by the Trustee.

       So long as no  Event of  Default  has  occurred  and is  continuing,  the
Company shall have the right,  from time to time and without causing an Event of
Default,  to defer payments of interest on the Debt  Securities by extending the
interest payment period on the Debt Securities at any time and from time to time
during the term of the Debt  Securities,  for up to 10  consecutive  semi-annual
periods (each such extended  interest  payment period,  an "Extension  Period"),
during which  Extension  Period no interest shall be due and payable (except any
Additional  Interest that may be due and payable).  During any Extension Period,
interest  will continue to accrue on the Debt  Securities,  and interest on such
accrued  interest (such accrued interest and interest thereon referred to herein
as  "Deferred   Interest")  will  accrue,  at  the  Interest  Rate,   compounded
semi-annually  from the date such Deferred Interest would have been payable were
it not  for the  Extension  Period,  both to the  extent  permitted  by law.  No
Extension  Period may end on a date other than an Interest  Payment Date. At the
end of any such Extension Period the Company shall pay all Deferred Interest
then  accrued  and unpaid on the Debt  Securities;  provided,  however,  that no
                                                    --------   -------
Extension  Period may extend  beyond the Maturity  Date and  provided,  further,
however,  during any such Extension  Period,  the Company may not (i) declare or
pay any dividends or distributions on, or redeem,  purchase,  acquire, or make a
liquidation  payment with respect to, any of the Company's capital stock or (ii)
make any payment of  principal  of or interest or premium,  if any, on or repay,
repurchase or redeem any debt  securities of the Company that rank pari passu in
all respects with or junior in interest to the Debt  Securities  (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company (A) in connection  with any employment  contract,  benefit plan or other
similar arrangement with or for the benefit of one or more employees,  officers,
directors or  consultants,  (B) in connection  with a dividend  reinvestment  or
stockholder  stock  purchase  plan or (C) in  connection  with the  issuance  of
capital stock of the Company (or securities  convertible into or exercisable for
such capital stock), as consideration in an acquisition transaction entered into
prior to the  applicable  Extension  Period,  (b) as a result of any exchange or
conversion of any class or series of the Company's capital stock (or any capital
stock of a subsidiary  of the Company) for any class or series of the  Company's
capital  stock or of any class or series of the Company's  indebtedness  for any
class or series of the Company's  capital stock,  (c) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange  provisions  of such capital stock or the security  being  converted or
exchanged,   (d)  any   declaration  of  a  dividend  in  connection   with  any
stockholder's  rights plan, or the issuance of rights,  stock or other  property
under any  stockholder's  rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend  stock or the stock  issuable  upon  exercise of
such  warrants,  options or other  rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).  Prior
to the termination of any Extension Period,  the Company may further extend such
period,  provided,  that such period together with all such previous and further
         --------
consecutive  extensions  thereof  shall not  exceed 10  consecutive  semi-annual
periods,  or extend  beyond  the  Maturity  Date.  Upon the  termination  of any
Extension Period and upon the payment of all Deferred Interest,  the Company may
commence a new  Extension  Period,  subject to the  foregoing  requirements.  No
interest  or Deferred  Interest  shall be due and  payable  during an  Extension
Period,  except at the end thereof,  but each installment of interest that would
otherwise  have been due and payable  during such  Extension  Period  shall bear
Deferred  Interest.  The Company must give the Trustee notice of its election to
begin such  Extension  Period at least one  Business Day prior to the earlier of
(i) the next succeeding date on which interest on the Debt Securities would have
been payable except for the election to begin such Extension  Period or (ii) the
date such  interest  is  payable,  but in any event not later  than the  related
regular record date.

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

       The Company waives demand, presentment for payment, notice of nonpayment,
notice of protest, and all other notices.

       This  Debt  Security  shall  not be  entitled  to any  benefit  under the
Indenture  hereinafter  referred to and shall not be valid or become  obligatory
for any purpose until the certificate of  authentication  hereon shall have been
signed by or on behalf of the Trustee.

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


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


                                         FIRST BANKS, INC.


                                         By:
                                            ------------------------------------
                                             Name:
                                             Title:
Dated: __________________, 2002


                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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


                                         WILMINGTON TRUST COMPANY,  not  in  its
                                         individual  capacity  but solely as the
                                         Trustee


                                         By:
                                             -----------------------------------
                                                      Authorized Officer
Dated: __________________, 2002


<PAGE>



                          [FORM OF REVERSE OF SECURITY]
                          -----------------------------

       This Debt Security is one of a duly authorized  series of Debt Securities
of the  Company,  all  issued  or to be issued  pursuant  to an  Indenture  (the
"Indenture"),  dated as of April 10, 2002,  duly executed and delivered  between
the Company and Wilmington Trust Company,  as Trustee (the "Trustee"),  to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description  of the  rights,  limitations  of  rights,  obligations,  duties and
immunities  thereunder  of the Trustee,  the Company and the holders of the Debt
Securities  (referred  to herein as the "Debt  Securities")  of which  this Debt
Security  is a part.  The summary of the terms of this Debt  Security  contained
herein does not purport to be complete  and is  qualified  by  reference  to the
Indenture.

       Upon the  occurrence  and  continuation  of a Tax  Event,  an  Investment
Company Event or a Capital  Treatment  Event,  this Debt Security may become due
and payable, in whole but not in part, at any time, within 90 days following the
occurrence  of such Tax Event,  Investment  Company  Event or Capital  Treatment
Event  (the  "Special  Redemption  Date"),  as the case may be,  at the  Special
Redemption  Price.  The  Company  shall also have the right to redeem  this Debt
Security at the option of the Company,  in whole or in part,  on any April 22 or
October 22 on or after April 22, 2007 (a "Redemption  Date"),  at the Redemption
Price.

       Any redemption  pursuant to the preceding paragraph will be made, subject
to the receipt by the Company of prior  approval  from the Board of Governors of
the Federal  Reserve  System (the  "Federal  Reserve")  if then  required  under
applicable capital guidelines or policies of the Federal Reserve,  upon not less
than 30 days' nor more than 60 days'  notice.  If the Debt  Securities  are only
partially redeemed by the Company, the Debt Securities will be redeemed pro rata
or by lot or by any other method utilized by the Trustee.

       "Redemption  Price"  means  100%  of the  principal  amount  of the  Debt
Securities  being  redeemed  plus  accrued  and  unpaid  interest  on such  Debt
Securities  to the  Redemption  Date or, in the case of a redemption  due to the
occurrence of a Special Event,  to the Special  Redemption  Date if such Special
Redemption Date is on or after April 22, 2007.

       "Special  Redemption  Price" means (1) if the Special  Redemption Date is
before April 22, 2007,  the greater of (a) 100% of the  principal  amount of the
Debt Securities being redeemed pursuant to Section 10.02 of the Indenture or (b)
as  determined  by a  Quotation  Agent,  the sum of the  present  values  of the
principal  amount  payable as part of the  Redemption  Price  with  respect to a
redemption  as of April 22, 2007,  together  with the present  value of interest
payments  calculated  at a fixed per annum rate of interest  equal to 9.95% over
the Remaining Life of such Debt Securities, discounted to the Special Redemption
Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 0.50%, plus, in the case of either (a) or (b),
accrued and unpaid  interest on such Debt  Securities to the Special  Redemption
Date and (2) if the Special  Redemption  Date is on or after April 22, 2007, the
Redemption Price for such Special Redemption Date.

       "Comparable  Treasury Issue" means with respect to any Special 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  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 April 22, 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.

       "Comparable  Treasury  Price"  means (a) the  average  of five  Reference
Treasury Dealer Quotations for such Special Redemption Date, after excluding the
highest and lowest such  Reference  Treasury  Dealer  Quotations,  or (b) if the
Quotation  Agent  receives  fewer  than  five  such  Reference  Treasury  Dealer
Quotations, the average of all such Quotations.
<PAGE>

       "Primary  Treasury  Dealer"  means a  primary  United  States  Government
securities dealer in New York City.

       "Quotation  Agent" means  Salomon  Smith Barney Inc. and its  successors;
provided,  however,  that if the foregoing shall cease to be a Primary  Treasury
--------   -------
Dealer, the Company 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 Trustee after  consultation  with
the Company.

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

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

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

       In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing,  the principal of all of the Debt  Securities may be
declared due and payable, and upon such declaration of acceleration shall become
due and payable,  in the manner,  with the effect and subject to the  conditions
provided in the Indenture.

       The Indenture contains provisions permitting the Company and the Trustee,
with the  consent  of the  holders  of not less  than a  majority  in  aggregate
principal  amount  of the  Debt  Securities  at the  time  outstanding  affected
thereby, as specified in the Indenture,  to execute supplemental  indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the  provisions of the Indenture or of any  supplemental  indenture or of
modifying  in any  manner  the  rights of the  holders  of the Debt  Securities;
provided,  however,  that no such  supplemental  indenture  shall,  among  other
--------   -------
things,  without  the  consent  of  the  holders  of  each  Debt  Security  then
outstanding  and  affected  thereby  (i) extend the fixed  maturity  of the Debt
Securities,  or reduce the principal  amount thereof or any  redemption  premium
thereon,  or reduce the rate or extend the time of payment of interest  thereon,
or make the  principal  of, or any  interest or premium on, the Debt  Securities
payable in any coin or currency other than that provided in the Debt Securities,
or impair or affect the right of any holder of Debt Securities to institute suit
for the  payment  thereof,  or (ii)  reduce  the  aforesaid  percentage  of Debt
Securities,   the  holders  of  which  are  required  to  consent  to  any  such
supplemental  indenture.  The Indenture also contains provisions  permitting the
holders of a majority in aggregate  principal  amount of the Debt  Securities at
the time outstanding, on behalf of all of the holders of the Debt Securities, to
waive  any  past default in the performance of any of the covenants contained in
<PAGE>

the Indenture,  or established pursuant to the Indenture,  and its consequences,
except a default in the  payment of the  principal  of or  premium,  if any,  or
interest  on any of the Debt  Securities.  Any such  consent  or  waiver  by the
registered  holder of this Debt  Security  (unless  revoked as  provided  in the
Indenture)  shall be conclusive and binding upon such holder and upon all future
holders  and owners of this Debt  Security  and of any Debt  Security  issued in
exchange  herefor or in place  hereof  (whether by  registration  of transfer or
otherwise),  irrespective  of whether  or not any  notation  of such  consent or
waiver is made upon this Debt Security.

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

       As provided in the  Indenture and subject to certain  limitations  herein
and therein set forth,  this Debt  Security is  transferable  by the  registered
holder hereof on the Debt Security  Register of the Company,  upon  surrender of
this Debt Security for  registration  of transfer at the office or agency of the
Trustee  in  Wilmington,   Delaware  accompanied  by  a  written  instrument  or
instruments of transfer in form  satisfactory to the Company or the Trustee duly
executed  by the  registered  holder  hereof  or  such  holder's  attorney  duly
authorized  in  writing,  and  thereupon  one or more  new  Debt  Securities  of
authorized  denominations  and for the same aggregate  principal  amount will be
issued to the designated  transferee or  transferees.  No service charge will be
made for any such registration of transfer,  but the Company may require payment
of a sum  sufficient to cover any tax or other  governmental  charge  payable in
relation thereto.

       Prior to due  presentment  for  registration  of  transfer  of this  Debt
Security,  the Company, the Trustee, any Authenticating Agent, any paying agent,
any  transfer  agent  and the Debt  Security  registrar  may deem and  treat the
registered  holder hereof as the absolute owner hereof (whether or not this Debt
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon) for the purpose of receiving  payment of or on account of the  principal
hereof and  interest  due hereon and for all other  purposes,  and  neither  the
Company nor the Trustee nor any  Authenticating  Agent nor any paying  agent nor
any  transfer  agent nor any Debt  Security  registrar  shall be affected by any
notice to the contrary.

       No  recourse  shall be had for the  payment  of the  principal  of or the
interest on this Debt Security,  or for any claim based hereon,  or otherwise in
respect  hereof,  or  based  on or in  respect  of the  Indenture,  against  any
incorporator,  stockholder,  officer or director,  past,  present or future,  as
such, of the Company or of any predecessor or successor corporation,  whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise,  all such liability being, by the acceptance
hereof  and as part of the  consideration  for the  issuance  hereof,  expressly
waived and released.

       The Debt  Securities  are Issuable only in registered  certificated  form
without coupons. As provided in the Indenture and subject to certain limitations
herein and  therein  set forth,  Debt  Securities  are  exchangeable  for a like
aggregate  principal  amount  of  Debt  Securities  of  a  different  authorized
denomination, as requested by the holder surrendering the same.

       All terms used in this Debt  Security  that are defined in the  Indenture
shall have the meanings assigned to them in the Indenture.

       THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE  INDENTURE AND THE DEBT
SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.



<PAGE>

                                                                   Edxhibit 4.16





                               GUARANTEE AGREEMENT

                                FIRST BANKS, INC.

                           Dated as of April 10, 2002


<PAGE>
<TABLE>
<CAPTION>



                                TABLE OF CONTENTS

                                                                                                     Page
                                    ARTICLE I
                         DEFINITIONS AND INTERPRETATION

<S>                                                                                                    <C>
SECTION 1.1 Definitions and Interpretation.........................................................    1

                                   ARTICLE II
               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 2.1 Powers and Duties of the Guarantee Trustee.............................................    4
SECTION 2.2 Certain Rights of the Guarantee Trustee................................................    5
SECTION 2.3 Not Responsible for Recitals or Issuance of Guarantee..................................    7
SECTION 2.4 Events of Default; Waiver..............................................................    8
SECTION 2.5 Events of Default; Notice..............................................................    8

                                   ARTICLE III
                              THE GUARANTEE TRUSTEE

SECTION 3.1 The Guarantee Trustee; Eligibility.....................................................    8
SECTION 3.2 Appointment, Removal and Resignation of the Guarantee Trustee..........................    9

                                   ARTICLE IV
                                    GUARANTEE

SECTION 4.1 Guarantee..............................................................................   10
SECTION 4.2 Waiver of Notice and Demand............................................................   10
SECTION 4.3 Obligations Not Affected...............................................................   10
SECTION 4.4 Rights of Holders......................................................................   11
SECTION 4.5 Guarantee of Payment...................................................................   12
SECTION 4.6 Subrogation............................................................................   12
SECTION 4.7 Independent Obligations................................................................   12
SECTION 4.8 Enforcement............................................................................   12

                                    ARTICLE V
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1 Limitation of Transactions.............................................................   13
SECTION 5.2 Ranking................................................................................   13

                                   ARTICLE VI
                                   TERMINATION

SECTION 6.1 Termination............................................................................   14

                                   ARTICLE VII
                                 INDEMNIFICATION

SECTION 7.1 Exculpation............................................................................   14
SECTION 7.2 Indemnification........................................................................   14
SECTION 7.3 Compensation; Reimbursement of Expenses................................................   16


<PAGE>



                                  ARTICLE VIII
                                  MISCELLANEOUS

SECTION 8.1 Successors and Assigns.................................................................   16
SECTION 8.2 Amendments.............................................................................   16
SECTION 8.3 Notices................................................................................   16
SECTION 8.4 Benefit................................................................................   17
SECTION 8.5 Governing Law..........................................................................   17
SECTION 8.6 Counterparts...........................................................................   17

</TABLE>

<PAGE>



                               GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (the "Guarantee"),  dated as of April 10, 2002, is
executed and delivered by First Banks, Inc., a bank holding company incorporated
in Missouri (the "Guarantor"),  and Wilmington Trust Company, a Delaware banking
corporation,  as  trustee  (the  "Guarantee  Trustee"),  for the  benefit of the
Holders (as defined  herein)  from time to time of the  Capital  Securities  (as
defined herein) of First Bank Capital Trust, a Delaware statutory business trust
(the "Issuer").

     WHEREAS,  pursuant to an Amended  and  Restated  Declaration  of Trust (the
"Declaration"),  dated as of April 10, 2002, among the trustees named therein of
the Issuer,  First Banks, Inc., as sponsor, and the Holders from time to time of
undivided  beneficial  interests  in the  assets of the  Issuer,  the  Issuer is
issuing on the date hereof securities, having an aggregate liquidation amount of
up  to  $25,000,000,   designated  the  Floating  Rate  TRUPS(R)  (the  "Capital
Securities"); and

     WHEREAS,  as incentive for the Holders to purchase the Capital  Securities,
the Guarantor desires  irrevocably and  unconditionally  to agree, to the extent
set forth in this  Guarantee,  to pay to the Holders of Capital  Securities  the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.

     NOW,  THEREFORE,  in  consideration  of the  purchase by each Holder of the
Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Holders.

                                    ARTICLE I
                         DEFINITIONS AND INTERPRETATION

SECTION 1.1. Definitions and Interpretation.
             ------------------------------

In this Guarantee, unless the context otherwise requires:

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

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

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

               (d) all references in this Guarantee to Articles and Sections are
          to  Articles  and  Sections  of  this  Guarantee,   unless   otherwise
          specified;

               (e) terms defined in the  Declaration as at the date of execution
          of this Guarantee have the same meanings when used in this  Guarantee,
          unless  otherwise  defined in this  Guarantee  or unless  the  context
          otherwise requires; and

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

          "Beneficiaries"  means any Person to whom the  Issuer is or  hereafter
becomes indebted or liable.

          "Corporate Trust Office" means the office of the Guarantee  Trustee at
which the  corporate  trust  business of the  Guarantee  Trustee  shall,  at any
particular  time,  be  principally  administered,  which  office  at the date of
execution of this Guarantee is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001.

          "Covered Person" means any Holder of Capital Securities.
<PAGE>

          "Debentures" means the junior subordinated  debentures of First Banks,
Inc., designated the Floating Rate Junior Subordinated Debt Securities due 2032,
held by the Institutional Trustee (as defined in the Declaration) of the Issuer.

          "Event of Default" has the meaning set forth in Section 2.4.

          "Guarantee  Payments" means the following  payments or  distributions,
without duplication,  with respect to the Capital Securities,  to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration)  which are required to be paid on such Capital Securities to
the extent the Issuer has funds available in the Property Account (as defined in
the Declaration) therefor at such time, (ii) the Redemption Price (as defined in
the  Indenture)  to the extent the Issuer has funds  available  in the  Property
Account therefor at such time, with respect to any Capital Securities called for
redemption by the Issuer,  (iii) the Special Redemption Price (as defined in the
Indenture) to the extent the Issuer has funds available in the Property  Account
therefor at such time, with respect to Capital  Securities called for redemption
upon the occurrence of a Special Event (as defined in the  Indenture),  and (iv)
upon  a  voluntary  or  involuntary  liquidation,   dissolution,  winding-up  or
termination  of the Issuer (other than in connection  with the  distribution  of
Debentures  to the Holders of the  Capital  Securities  in exchange  therefor as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Capital Securities to the
date of payment,  to the extent the Issuer has funds  available  in the Property
Account  therefor  at such  time,  and (b) the  amount of  assets of the  Issuer
remaining  available for  distribution  to Holders in  liquidation of the Issuer
after  satisfaction  of  liabilities  to  creditors of the Issuer as required by
applicable law (in either case, the "Liquidation Distribution").

          "Guarantee Trustee" means Wilmington Trust Company,  until a Successor
Guarantee Trustee has been appointed and has accepted such appointment  pursuant
to the  terms  of this  Guarantee  and  thereafter  means  each  such  Successor
Guarantee Trustee.

          "Holder"  means any holder,  as registered on the books and records of
the Issuer, of any Capital Securities;  provided,  however, that, in determining
                                        --------   -------
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.

          "Indemnified  Person"  means the Guarantee  Trustee  (including in its
individual  capacity),  any Affiliate of the Guarantee Trustee, or any officers,
directors,   shareholders,   members,  partners,   employees,   representatives,
nominees, custodians or agents of the Guarantee Trustee.

          "Indenture" means the Indenture,  dated as of April 10, 2002,  between
the Guarantor and Wilmington Trust Company,  not in its individual  capacity but
solely as trustee, and any indenture  supplemental thereto pursuant to which the
Debentures  are  to be  issued  to the  Institutional  Trustee  of  the  Issuer.
"Liquidation  Distribution"  has the  meaning  set  forth in the  definition  of
"Guarantee Payments" herein.

          "Majority  in  liquidation  amount of the  Capital  Securities"  means
Holder(s) of outstanding  Capital  Securities,  voting together as a class,  but
separately  from the  holders  of  Common  Securities,  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,
but excluding, the date upon which the voting percentages are determined) of all
Capital Securities then outstanding.

          "Obligations"  means  any  costs,  expenses  or  liabilities  (but not
including liabilities related to taxes) of the Issuer, other than obligations of
the  Issuer to pay to  holders  of any Trust  Securities  the  amounts  due such
holders pursuant to the terms of the Trust Securities.
<PAGE>

          "Officer's   Certificate"   means,  with  respect  to  any  Person,  a
certificate  signed by one  Authorized  Officer of such  Person.  Any  Officer's
Certificate  delivered  with respect to compliance  with a condition or covenant
provided for in this Guarantee shall include:

               (a)  a  statement   that  each  officer   signing  the  Officer's
          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 Officer's
          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.

          "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.

          "Responsible  Officer" means,  with respect to the Guarantee  Trustee,
any officer  within the  Corporate  Trust Office of the  Guarantee  Trustee with
direct  responsibility  for the  administration  of any matters relating to this
Guarantee,  including any vice  president,  any assistant  vice  president,  any
secretary,  any assistant secretary, the treasurer, any assistant treasurer, any
trust officer or other  officer of the  Corporate  Trust Office of the Guarantee
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.

          "Successor  Guarantee  Trustee"  means a successor  Guarantee  Trustee
possessing the qualifications to act as Guarantee Trustee under Section 3.1.

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

                                   ARTICLE II
               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 2.1. Powers and Duties of the Guarantee Trustee.
             ------------------------------------------

               (a) This Guarantee shall be held by the Guarantee Trustee for the
          benefit of the Holders of the Capital  Securities,  and the  Guarantee
          Trustee  shall not  transfer  this  Guarantee  to any Person  except a
          Holder of Capital Securities  exercising his or her rights pursuant to
          Section  4.4(b) or to a Successor  Guarantee  Trustee on acceptance by
          such  Successor  Guarantee  Trustee  of  its  appointment  to  act  as
          Successor  Guarantee  Trustee.  The right,  title and  interest of the
          Guarantee Trustee shall  automatically vest in any Successor Guarantee
          Trustee,  and such  vesting and  cessation of title shall be effective
          whether or not conveyancing documents have been executed and delivered
          pursuant to the appointment of such Successor Guarantee Trustee.

               (b) If an  Event  of  Default  actually  known  to a  Responsible
          Officer of the Guarantee  Trustee has occurred and is continuing,  the
          Guarantee  Trustee shall enforce this Guarantee for the benefit of the
          Holders of the Capital Securities.

               (c) The Guarantee Trustee,  before the occurrence of any Event of
          Default and after the curing or waiving of all Events of Default  that
          may have occurred,  shall undertake to perform only such duties as are
          specifically  set forth in this  Guarantee,  and no implied  covenants
          shall be read into this Guarantee against the Guarantee

<PAGE>

          Trustee.  In case an Event of Default has occurred  (that has not been
          cured or waived pursuant to Section 2.4(b)) and is actually known to a
          Responsible  Officer of the Guarantee  Trustee,  the Guarantee Trustee
          shall  exercise  such of the rights  and  powers  vested in it by this
          Guarantee,  and use the same degree of care and skill in its  exercise
          thereof,  as  a  prudent  person  would  exercise  or  use  under  the
          circumstances in the conduct of his or her own affairs.

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

                    (i)  prior to the  occurrence  of any Event of  Default  and
               after the curing or  waiving  of all  Events of Default  that may
               have occurred:

                         (A) the duties and obligations of the Guarantee Trustee
                    shall be determined solely by the express provisions of this
                    Guarantee,  and the  Guarantee  Trustee  shall not be liable
                    except for the performance of such duties and obligations as
                    are specifically set forth in this Guarantee, and no implied
                    covenants or  obligations  shall be read into this Guarantee
                    against the Guarantee Trustee; and

                         (B) in the  absence  of bad  faith  on the  part of the
                    Guarantee  Trustee,  the Guarantee  Trustee may conclusively
                    rely, as to the truth of the statements and the  correctness
                    of the opinions expressed therein,  upon any certificates or
                    opinions  furnished to the Guarantee  Trustee and conforming
                    to the  requirements of this  Guarantee;  but in the case of
                    any such certificates or opinions furnished to the Guarantee
                    Trustee,  the  Guarantee  Trustee  shall  be under a duty to
                    examine the same to  determine  whether or not on their face
                    they conform to the requirements of this Guarantee;

               (ii) the  Guarantee  Trustee shall not be liable for any error of
          judgment made in good faith by a Responsible  Officer of the Guarantee
          Trustee,  unless it shall be proved that such  Responsible  Officer of
          the  Guarantee  Trustee or the  Guarantee  Trustee  was  negligent  in
          ascertaining the pertinent facts upon which such judgment was made;

               (iii) the  Guarantee  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 written  direction of the Holders of not less than
          a Majority in liquidation amount of the Capital Securities relating to
          the time, method and place of conducting any proceeding for any remedy
          available to the Guarantee  Trustee,  or exercising any trust or power
          conferred upon the Guarantee Trustee under this Guarantee; and

               (iv) no provision of this  Guarantee  shall require the Guarantee
          Trustee to expend or risk its own funds or  otherwise  incur  personal
          financial  liability in the performance of any of its duties or in the
          exercise  of any of its rights or  powers,  if the  Guarantee  Trustee
          shall have reasonable grounds for believing that the repayment of such
          funds  is not  reasonably  assured  to it  under  the  terms  of  this
          Guarantee,  or security and indemnity,  reasonably satisfactory to the
          Guarantee  Trustee,  against such risk or liability is not  reasonably
          assured to it.

SECTION 2.2. Certain Rights of the Guarantee Trustee.
             ---------------------------------------

          (a) Subject to the provisions of Section 2.1:

               (i) The Guarantee  Trustee may  conclusively  rely,  and shall be
          fully  protected  in  acting  or  refraining  from  acting  upon,  any
          resolution,   certificate,  statement,  instrument,  opinion,  report,

<PAGE>

          notice, request,  direction,  consent,  order, bond, debenture,  note,
          other evidence of indebtedness or other paper or document  believed by
          it to be genuine and to have been  signed,  sent or  presented  by the
          proper party or parties.

               (ii) Any direction or act of the Guarantor  contemplated  by this
          Guarantee shall be sufficiently evidenced by an Officer's Certificate.

               (iii) Whenever,  in the  administration  of this  Guarantee,  the
          Guarantee  Trustee shall deem it desirable  that a matter be proved or
          established before taking, suffering or omitting any action hereunder,
          the Guarantee  Trustee  (unless other evidence is herein  specifically
          prescribed) may, in the absence of bad faith on its part,  request and
          conclusively  rely  upon an  Officer's  Certificate  of the  Guarantor
          which,  upon receipt of such request,  shall be promptly  delivered by
          the Guarantor.

               (iv)  The  Guarantee  Trustee  shall  have  no duty to see to any
          recording,  filing or  registration of any instrument or other writing
          (or any rerecording, refiling or reregistration thereof).

               (v)  The  Guarantee  Trustee  may  consult  with  counsel  of its
          selection,  and the advice or opinion of such  counsel with respect to
          legal matters shall be full and complete  authorization and protection
          in respect of any action taken, suffered or omitted by it hereunder in
          good faith and in accordance with such advice or opinion. Such counsel
          may be  counsel  to the  Guarantor  or any of its  Affiliates  and may
          include any of its  employees.  The  Guarantee  Trustee shall have the
          right at any time to seek instructions  concerning the  administration
          of this Guarantee from any court of competent jurisdiction.

               (vi) The  Guarantee  Trustee  shall be  under  no  obligation  to
          exercise any of the rights or powers vested in it by this Guarantee at
          the request or direction of any Holder,  unless such Holder shall have
          provided  to  the  Guarantee  Trustee  such  security  and  indemnity,
          reasonably  satisfactory to the Guarantee Trustee,  against the costs,
          expenses  (including  attorneys' fees and expenses and the expenses of
          the  Guarantee   Trustee's   agents,   nominees  or  custodians)   and
          liabilities  that  might be  incurred  by it in  complying  with  such
          request or direction,  including  such  reasonable  advances as may be
          requested by the Guarantee Trustee;  provided,  however,  that nothing
          contained  in this  Section  2.2(a)(vi)  shall be taken to relieve the
          Guarantee Trustee,  upon the occurrence of an Event of Default, of its
          obligation  to  exercise  the rights  and powers  vested in it by this
          Guarantee.

               (vii)  The  Guarantee  Trustee  shall  not be  bound  to make any
          investigation  into the facts or  matters  stated  in any  resolution,
          certificate,  statement, instrument, opinion, report, notice, request,
          direction,  consent,  order, bond, debenture,  note, other evidence of
          indebtedness or other paper or document, but the Guarantee Trustee, in
          its discretion,  may make such further inquiry or  investigation  into
          such facts or matters as it may see fit.

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

               (ix) Any  action  taken by the  Guarantee  Trustee  or its agents
          hereunder  shall bind the Holders of the Capital  Securities,  and the
          signature  of the  Guarantee  Trustee  or its  agents  alone  shall be
          sufficient  and  effective to perform any such action.  No third party
          shall be  required  to inquire as to the  authority  of the  Guarantee
          Trustee  to so act or as to its  compliance  with any of the terms and
          provisions  of this  Guarantee,  both of which  shall be  conclusively
          evidenced  by the  Guarantee  Trustee's  or its  agent's  taking  such
          action.
<PAGE>

               (x)  Whenever  in  the   administration  of  this  Guarantee  the
          Guarantee Trustee shall deem it desirable to receive instructions with
          respect to  enforcing  any remedy or right or taking any other  action
          hereunder, the Guarantee Trustee (A) may request instructions from the
          Holders of a Majority in liquidation amount of the Capital Securities,
          (B) may  refrain  from  enforcing  such remedy or right or taking such
          other  action  until such  instructions  are received and (C) shall be
          protected in conclusively relying on or acting in accordance with such
          instructions.

               (xi) The  Guarantee  Trustee  shall not be liable  for any action
          taken,  suffered,  or  omitted  to be  taken by it in good  faith  and
          reasonably believed by it to be authorized or within the discretion or
          rights or powers conferred upon it by this Guarantee.

          (b) No provision of this Guarantee  shall be deemed to impose any duty
or obligation  on the  Guarantee  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  Guarantee  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  Guarantee  Trustee shall be
construed to be a duty.

SECTION 2.3. Not Responsible for Recitals or Issuance of Guarantee.
             -----------------------------------------------------

          The  recitals  contained  in this  Guarantee  shall  be  taken  as the
statements  of the  Guarantor,  and the  Guarantee  Trustee  does not assume any
responsibility   for  their   correctness.   The  Guarantee   Trustee  makes  no
representation as to the validity or sufficiency of this Guarantee.

SECTION 2.4. Events of Default; Waiver.
             -------------------------

          (a) An Event of  Default  under  this  Guarantee  will  occur upon the
failure of the  Guarantor  to perform  any of its  payment or other  obligations
hereunder.

          (b) The  Holders of a Majority  in  liquidation  amount of the Capital
Securities may, voting or consenting as a class, on behalf of the Holders of all
of the Capital Securities, waive any past Event of Default and its consequences.
Upon such waiver,  any such Event of Default shall cease to exist,  and shall be
deemed to have been  cured,  for every  purpose of this  Guarantee,  but no such
waiver shall extend to any  subsequent  or other  default or Event of Default or
impair any right consequent thereon.

SECTION 2.5. Events of Default; Notice.
             -------------------------

          (a) The Guarantee  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  Capital  Securities,  notices of all Events of Default  actually
known to a Responsible  Officer of the Guarantee  Trustee,  unless such defaults
have been cured before the giving of such notice,  provided,  however,  that the
Guarantee  Trustee shall be protected in withholding  such notice if and so long
as a Responsible  Officer of the Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of the Capital
Securities.

          (b) The Guarantee  Trustee shall not be charged with  knowledge of any
Event of Default unless the Guarantee Trustee shall have received written notice
thereof  from  the  Guarantor  or a  Holder  of  the  Capital  Securities,  or a
Responsible  Officer of the Guarantee Trustee charged with the administration of
this Guarantee shall have actual knowledge thereof.
<PAGE>

                                   ARTICLE III
                              THE GUARANTEE TRUSTEE

SECTION 3.1. The Guarantee Trustee; Eligibility.
             ----------------------------------

          (a) There shall at all times be a Guarantee Trustee which shall:

                    (i) not be an Affiliate of the Guarantor; and

                    (ii) 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 Person  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,   pursuant  to  law  or  to  the  requirements  of  the
               supervising or examining  authority  referred to above, then, for
               the purposes of this Section 3.1(a)(ii), 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  Guarantee  Trustee  shall  cease  to be
          eligible to so act under Section 3.1(a),  the Guarantee  Trustee shall
          immediately  resign in the  manner  and with the  effect  set forth in
          Section 3.2(c).

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

SECTION 3.2. Appointment, Removal and Resignation of the Guarantee Trustee.
             -------------------------------------------------------------

               (a)  Subject to Section  3.2(b),  the  Guarantee  Trustee  may be
          appointed or removed without cause at any time by the Guarantor except
          during an Event of Default.

               (b) The Guarantee Trustee shall not be removed in accordance with
          Section 3.2(a) until a Successor  Guarantee Trustee has been appointed
          and has accepted such  appointment by written  instrument  executed by
          such Successor Guarantee Trustee and delivered to the Guarantor.

               (c) The Guarantee  Trustee  appointed to office shall hold office
          until a Successor Guarantee Trustee shall have been appointed or until
          its  removal or  resignation.  The  Guarantee  Trustee may resign from
          office  (without  need  for  prior  or  subsequent  accounting)  by an
          instrument in writing executed by the Guarantee  Trustee and delivered
          to the  Guarantor,  which  resignation  shall not take effect  until a
          Successor  Guarantee  Trustee has been appointed and has accepted such
          appointment  by an  instrument in writing  executed by such  Successor
          Guarantee  Trustee and  delivered to the  Guarantor  and the resigning
          Guarantee Trustee.

               (d) If no Successor  Guarantee  Trustee shall have been appointed
          and  accepted  appointment  as provided in this  Section 3.2 within 60
          days after  delivery of an instrument of removal or  resignation,  the
          Guarantee Trustee resigning or being removed may petition any court of
          competent  jurisdiction  for  appointment  of  a  Successor  Guarantee
          Trustee.  Such court may thereupon,  after prescribing such notice, if
          any, as it may deem proper, appoint a Successor Guarantee Trustee.

               (e) No  Guarantee  Trustee  shall  be  liable  for  the  acts  or
          omissions to act of any Successor Guarantee Trustee.

               (f) Upon  termination of this Guarantee or removal or resignation
          of the Guarantee  Trustee  pursuant to this Section 3.2, the Guarantor
          shall pay to the Guarantee  Trustee all amounts owing to the Guarantee
          Trustee  under  Sections  7.2  and  7.3  accrued  to the  date of such
          termination, removal or resignation.



<PAGE>


                                   ARTICLE IV
                                    GUARANTEE
SECTION 4.1. Guarantee.
             ---------

               (a) The Guarantor  irrevocably and unconditionally  agrees to pay
          in full to the Holders the Guarantee Payments (without  duplication of
          amounts  theretofore paid by the Issuer),  as and when due, regardless
          of any defense (except as defense of payment by the Issuer),  right of
          set-off  or  counterclaim  that the  Issuer  may have or  assert.  The
          Guarantor's obligation to make a Guarantee Payment may be satisfied by
          direct payment of the required amounts by the Guarantor to the Holders
          or by causing the Issuer to pay such amounts to the Holders.

               (b) The  Guarantor  hereby  also  agrees  to  assume  any and all
          Obligations of the Issuer and in the event any such  Obligation is not
          so assumed,  subject to the terms and conditions hereof, the Guarantor
          hereby irrevocably and unconditionally  guarantees to each Beneficiary
          the full payment,  when and as due, of any and all Obligations to such
          Beneficiaries.  This Guarantee is intended to be for the Beneficiaries
          who have received notice hereof.

SECTION 4.2. Waiver of Notice and Demand.
             ---------------------------

          The Guarantor hereby waives notice of acceptance of this Guarantee and
of any  liability  to which it  applies or may  apply,  presentment,  demand for
payment, any right to require a proceeding first against the Issuer or any other
Person before proceeding against the Guarantor,  protest,  notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.

SECTION 4.3. Obligations Not Affected.
             ------------------------

         The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee shall in no way be affected or impaired by reason of the
happening from time to time of any of the following:

               (a) the release or waiver,  by operation of law or otherwise,  of
          the  performance or observance by the Issuer of any express or implied
          agreement,  covenant,  term  or  condition  relating  to  the  Capital
          Securities to be performed or observed by the Issuer;

               (b) the extension of time for the payment by the Issuer of all or
          any portion of the Distributions, Redemption Price, Special Redemption
          Price,  Liquidation  Distribution  or any other sums payable under the
          terms  of the  Capital  Securities  or the  extension  of time for the
          performance  of any  other  obligation  under,  arising  out of, or in
          connection  with, the Capital  Securities  (other than an extension of
          time for the payment of the Distributions,  Redemption Price,  Special
          Redemption Price,  Liquidation Distribution or other sums payable that
          results  from the  extension  of any  interest  payment  period on the
          Debentures  or any  extension of the maturity  date of the  Debentures
          permitted by the Indenture);

               (c) any failure, omission, delay or lack of diligence on the part
          of the Holders to enforce,  assert or exercise  any right,  privilege,
          power or remedy  conferred on the Holders pursuant to the terms of the
          Capital  Securities,  or any action on the part of the Issuer granting
          indulgence or extension of any kind;

               (d) the voluntary or involuntary liquidation,  dissolution,  sale
          of any collateral,  receivership,  insolvency,  bankruptcy, assignment
          for the benefit of creditors, reorganization, arrangement, composition
          or  readjustment of debt of, or other similar  proceedings  affecting,
          the Issuer or any of the assets of the Issuer;

               (e) any  invalidity  of, or defect or deficiency  in, the Capital
          Securities;

               (f) the  settlement or compromise  of any  obligation  guaranteed
          hereby or hereby incurred; or


<PAGE>

               (g)  any  other  circumstance  whatsoever  that  might  otherwise
          constitute a legal or  equitable  discharge or defense of a guarantor,
          it being the intent of this  Section 4.3 that the  obligations  of the
          Guarantor  hereunder shall be absolute and unconditional under any and
          all circumstances. There shall be no obligation of the Holders to give
          notice to, or obtain  consent of, the  Guarantor  with  respect to the
          happening of any of the foregoing.

SECTION 4.4. Rights of Holders.
             -----------------

               (a) The  Holders  of a  Majority  in  liquidation  amount  of the
          Capital Securities have the right to direct the time, method and place
          of conducting any proceeding for any remedy available to the Guarantee
          Trustee in respect of this  Guarantee or to direct the exercise of any
          trust or  power  conferred  upon  the  Guarantee  Trustee  under  this
          Guarantee;  provided,  however, that (subject to Sections 2.1 and 2.2)
          the  Guarantee  Trustee  shall have the right to decline to follow any
          such  direction if the  Guarantee  Trustee  shall  determine  that the
          actions so directed  would be unjustly  prejudicial to the Holders not
          taking  part in  such  direction  or if the  Guarantee  Trustee  being
          advised  by  counsel  determines  that the  action  or  proceeding  so
          directed may not lawfully be taken or if the Guarantee 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  proceeding  so  directed  would
          involve the Guarantee Trustee in personal liability.

               (b) Any  Holder  of  Capital  Securities  may  institute  a legal
          proceeding  directly  against the  Guarantor to enforce the  Guarantee
          Trustee's  rights under this  Guarantee,  without first  instituting a
          legal  proceeding  against the Issuer,  the  Guarantee  Trustee or any
          other Person. The Guarantor waives any right or remedy to require that
          any such action be brought  first  against the Issuer,  the  Guarantee
          Trustee or any other Person before so proceeding  directly against the
          Guarantor.

SECTION 4.5. Guarantee of Payment.
             --------------------

          This Guarantee creates a guarantee of payment and not of collection.

SECTION 4.6. Subrogation.
             -----------

          The  Guarantor  shall  be  subrogated  to all (if any)  rights  of the
Holders of Capital  Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Guarantee;  provided,  however, that
the Guarantor shall not (except to the extent required by applicable  provisions
of law) be entitled to enforce or exercise  any right that it may acquire by way
of subrogation or any indemnity,  reimbursement or other agreement, in all cases
as a result of payment under this Guarantee, if, after giving effect to any such
payment,  any amounts  are due and unpaid  under this  Guarantee.  If any amount
shall be paid to the  Guarantor  in  violation of the  preceding  sentence,  the
Guarantor  agrees to hold such  amount in trust for the  Holders and to pay over
such amount to the Holders.

SECTION 4.7. Independent Obligations
             -----------------------

          The  Guarantor   acknowledges  that  its  obligations   hereunder  are
independent  of the  obligations  of the  Issuer  with  respect  to the  Capital
Securities  and that the  Guarantor  shall be liable as principal  and as debtor
hereunder to make  Guarantee  Payments  pursuant to the terms of this  Guarantee
notwithstanding  the  occurrence  of any event  referred to in  subsections  (a)
through (g), inclusive, of Section 4.3 hereof.

SECTION 4.8. Enforcement.
             -----------

          A Beneficiary may enforce the  Obligations of the Guarantor  contained
in Section 4.1(b) directly  against the Guarantor,  and the Guarantor waives any
right or remedy to require that any action be brought  against the Issuer or any
other person or entity before proceeding against the Guarantor.
<PAGE>

          The  Guarantor  shall  be  subrogated  to all  rights  (if any) of any
Beneficiary   against  the  Issuer  in  respect  of  any  amounts  paid  to  the
Beneficiaries by the Guarantor under this Guarantee; provided, however, that the
Guarantor shall not (except to the extent  required by applicable  provisions of
law) be entitled to enforce or exercise any rights that it may acquire by way of
subrogation or any indemnity,  reimbursement or other agreement, in all cases as
a result of payment  under  this  Guarantee,  if,  after  giving  effect to such
payment, any amounts are due and unpaid under this Guarantee.

                                    ARTICLE V
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1. Limitation of Transactions.
             --------------------------

          So long as any Capital  Securities  remain  outstanding,  if (a) there
shall have  occurred and be  continuing an Event of Default or (b) the Guarantor
shall have selected an Extension  Period as provided in the Declaration and such
period, or any extension thereof,  shall have commenced and be continuing,  then
the Guarantor may not (x) declare or pay any dividends or  distributions  on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the  Guarantor's  capital  stock or (y)  make any  payment  of  principal  of or
interest  or  premium,  if any,  on or  repay,  repurchase  or  redeem  any debt
securities of the Guarantor  that rank pari passu in all respects with or junior
in interest to the  Debentures  (other than (i) payments  under this  Guarantee,
(ii) repurchases,  redemptions or other  acquisitions of shares of capital stock
of the Guarantor (A) in connection with any employment contract, benefit plan or
other  similar  arrangement  with or for the  benefit of one or more  employees,
officers,   directors,  or  consultants,  (B)  in  connection  with  a  dividend
reinvestment  or stockholder  stock purchase plan or (C) in connection  with the
issuance of capital stock of the Guarantor (or  securities  convertible  into or
exercisable  for  such  capital  stock),  as  consideration  in  an  acquisition
transaction  entered into prior to the occurrence of the Event of Default or the
applicable  Extension Period, (iii) as a result of any exchange or conversion of
any class or series of the Guarantor's  capital stock (or any capital stock of a
subsidiary of the Guarantor) for any class or series of the Guarantor's  capital
stock or of any class or series of the Guarantor's indebtedness for any class or
series  of the  Guarantor's  capital  stock,  (iv) the  purchase  of  fractional
interests in shares of the Guarantor's  capital stock pursuant to the conversion
or exchange  provisions of such capital stock or the security being converted or
exchanged,   (v)  any   declaration  of  a  dividend  in  connection   with  any
stockholder's  rights plan, or the issuance of rights,  stock or other  property
under any  stockholder's  rights plan, or the redemption or repurchase of rights
pursuant thereto, or (vi) any dividend in the form of stock,  warrants,  options
or other rights where the dividend  stock or the stock issuable upon exercise of
such  warrants,  options or other  rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).

SECTION 5.2. Ranking.
             -------

          This  Guarantee  will  constitute  an  unsecured   obligation  of  the
Guarantor  and will  rank  subordinate  and  junior in right of  payment  to all
present and future  Senior  Indebtedness  (as defined in the  Indenture)  of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees
to the  foregoing  provisions  of this  Guarantee  and the other terms set forth
herein.

          The right of the  Guarantor  to  participate  in any  distribution  of
assets of any of its  subsidiaries  upon any such  subsidiary's  liquidation  or
reorganization  or otherwise is subject to the prior claims of creditors of that
subsidiary,  except to the extent the  Guarantor  may itself be  recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee  will  be  effectively   subordinated   to  all  existing  and  future
liabilities of the Guarantor's  subsidiaries,  and claimants should look only to
the assets of the Guarantor for payments  thereunder.  This  Guarantee  does not
limit the  incurrence  or issuance  of other  secured or  unsecured  debt of the
Guarantor,  including Senior Indebtedness of the Guarantor,  under any indenture
or agreement that the Guarantor may enter into in the future or otherwise.



<PAGE>


                                   ARTICLE VI
                                   TERMINATION

SECTION 6.1. Termination.
             -----------

          This Guarantee shall  terminate as to the Capital  Securities (i) upon
full payment of the Redemption  Price or the Special  Redemption  Price,  as the
case  may  be,  of all  Capital  Securities  then  outstanding,  (ii)  upon  the
distribution  of all of the  Debentures  to the  Holders  of all of the  Capital
Securities or (iii) upon full payment of the amounts  payable in accordance with
the Declaration upon dissolution of the Issuer.  This Guarantee will continue to
be  effective  or will be  reinstated,  as the case  may be,  if at any time any
Holder of Capital  Securities  must  restore  payment of any sums paid under the
Capital Securities or under this Guarantee.

                                   ARTICLE VII
                                 INDEMNIFICATION

SECTION 7.1. Exculpation.
             -----------

               (a)  No  Indemnified  Person  shall  be  liable,  responsible  or
          accountable  in damages or otherwise  to the  Guarantor or any Covered
          Person for any loss,  damage or claim incurred by reason of any act or
          omission of such  Indemnified  Person in good faith in accordance with
          this Guarantee and in a manner that such Indemnified Person reasonably
          believed  to be within the scope of the  authority  conferred  on such
          Indemnified  Person  by  this  Guarantee  or by  law,  except  that an
          Indemnified  Person shall be liable for any such loss, damage or claim
          incurred by reason of such Indemnified  Person's negligence or willful
          misconduct with respect to such acts or omissions.

               (b) An Indemnified  Person shall be fully protected in relying in
          good faith upon the  records of the Issuer or the  Guarantor  and upon
          such  information,  opinions,  reports or statements  presented to the
          Issuer or the  Guarantor  by any Person as to matters the  Indemnified
          Person reasonably believes are within such other Person's professional
          or expert competence and who, if selected by such Indemnified  Person,
          has been selected with  reasonable  care by such  Indemnified  Person,
          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 Capital Securities might properly be paid.

SECTION 7.2. Indemnification.
             ---------------

               (a) The Guarantor  agrees to indemnify  each  Indemnified  Person
          for, and to hold each Indemnified Person harmless against, any and all
          loss, liability,  damage, claim or expense incurred without negligence
          or willful misconduct on the part of the Indemnified  Person,  arising
          out of or in connection with the acceptance or  administration  of the
          trust or trusts hereunder,  including but not limited to the costs and
          expenses  (including  reasonable  legal  fees  and  expenses)  of  the
          Indemnified  Person defending itself against,  or  investigating,  any
          claim or liability in connection  with the exercise or  performance of
          any of the  Indemnified  Person's  powers  or  duties  hereunder.  The
          obligation to indemnify as set forth in this Section 7.2 shall survive
          the   resignation  or  removal  of  the  Guarantee   Trustee  and  the
          termination of this Guarantee.

               (b) Promptly  after receipt by an  Indemnified  Person under this
          Section  7.2  of  notice  of the  commencement  of  any  action,  such
          Indemnified  Person will, if a claim in respect  thereof is to be made
          against the Guarantor  under this Section 7.2, notify the Guarantor in
          writing of the commencement  thereof; but the failure so to notify the
          Guarantor  (i) will not relieve the  Guarantor  from  liability  under
          paragraph  (a) above unless and to the extent that the  Guarantor  did
          not  otherwise  learn of such action and such  failure  results in the
          forfeiture  by the  Guarantor of  substantial  rights and defenses and
          (ii)  will  not,  in  any  event,   relieve  the  Guarantor  from  any
          obligations to any Indemnified  Person other than the  indemnification

<PAGE>

          obligation  provided in paragraph (a) above.  The  Guarantor  shall be
          entitled  to  appoint  counsel  of  the  Guarantor's   choice  at  the
          Guarantor's  expense to represent the Indemnified Person in any action
          for which indemnification is sought (in which case the Guarantor shall
          not  thereafter  be  responsible  for the  fees  and  expenses  of any
          separate counsel retained by the Indemnified  Person or Persons except
          as set forth  below);  provided,  however,  that such counsel shall be
                                 --------   -------
          satisfactory   to  the   Indemnified   Person.   Notwithstanding   the
          Guarantor's  election to appoint  counsel to represent the Indemnified
          Person in any action,  the Indemnified  Person shall have the right to
          employ separate counsel  (including local counsel),  and the Guarantor
          shall bear the  reasonable  fees,  costs and expenses of such separate
          counsel,  if (i)  the  use of  counsel  chosen  by  the  Guarantor  to
          represent  the  Indemnified  Person would  present such counsel with a
          conflict of interest,  (ii) the actual or potential  defendants in, or
          targets of, any such action  include both the  Indemnified  Person and
          the  Guarantor  and  the  Indemnified  Person  shall  have  reasonably
          concluded  that  there may be legal  defenses  available  to it and/or
          other  Indemnified  Persons which are different  from or additional to
          those  available to the Guarantor,  (iii) the Guarantor shall not have
          employed counsel  satisfactory to the Indemnified  Person to represent
          the  Indemnified  Person within a reasonable  time after notice of the
          institution of such action or (iv) the Guarantor  shall  authorize the
          Indemnified  Person to employ  separate  counsel at the expense of the
          Guarantor.  The Guarantor will not,  without the prior written consent
          of the  Indemnified  Persons,  settle or  compromise or consent to the
          entry of any judgment with respect to any pending or threatened claim,
          action,  suit or  proceeding  in respect of which  indemnification  or
          contribution may be sought  hereunder  (whether or not the Indemnified
          Persons  are  actual or  potential  parties  to such  claim or action)
          unless   such   settlement,   compromise   or  consent   includes   an
          unconditional  release of each  Indemnified  Person from all liability
          arising out of such claim, action, suit or proceeding.

SECTION 7.3. Compensation; Reimbursement of Expenses.
             ---------------------------------------

         The Guarantor agrees:

               (a) to pay to the  Guarantee  Trustee  from  time  to  time  such
          compensation for all services  rendered by it hereunder as the parties
          shall  agree to from  time to time  (which  compensation  shall not be
          limited by any  provision  of law in regard to the  compensation  of a
          trustee of an express  trust);  and (b) except as otherwise  expressly
          provided herein,  to reimburse the Guarantee  Trustee upon request for
          all reasonable  expenses,  disbursements and advances incurred or made
          by it in accordance  with any provision of this  Guarantee  (including
          the reasonable  compensation and the expenses and disbursements of its
          agents and counsel), except any such expense,  disbursement or advance
          as may be  attributable to its negligence or willful  misconduct.  The
          provisions  of this  Section  7.3 shall  survive  the  resignation  or
          removal  of  the  Guarantee   Trustee  and  the  termination  of  this
          Guarantee.

                                  ARTICLE VIII
                                  MISCELLANEOUS

SECTION 8.1. Successors and Assigns.
             ----------------------

          All guarantees and agreements  contained in this Guarantee  shall bind
the  successors,   assigns,  receivers,  trustees  and  representatives  of  the
Guarantor  and  shall  inure  to the  benefit  of  the  Holders  of the  Capital
Securities   then   outstanding.   Except  in  connection  with  any  merger  or
consolidation of the Guarantor with or into another entity or any sale, transfer
or lease of the Guarantor's assets to another entity, in each case to the extent
permitted  under the  Indenture,  the  Guarantor  may not  assign  its rights or
delegate its obligations  under this Guarantee without the prior approval of the
Holders  of not less  than a  Majority  in  liquidation  amount  of the  Capital
Securities.

SECTION 8.2. Amendments.
             ----------

          Except with  respect to any changes that do not  adversely  affect the
rights of Holders of the Capital  Securities  in any material  respect (in which
case no consent of Holders will be required), this Guarantee may be amended only

<PAGE>

with  the  prior  approval  of the  Holders  of not  less  than  a  Majority  in
liquidation amount of the Capital Securities.  The provisions of the Declaration
with  respect  to  amendments  thereof  shall  apply  equally  with  respect  to
amendments of the Guarantee.

SECTION 8.3. Notices.
             -------

          All notices  provided for in this Guarantee 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 Guarantee Trustee, at the Guarantee Trustee's
          mailing  address  set  forth  below  (or  such  other  address  as the
          Guarantee  Trustee  may give  notice of to the  Holders of the Capital
          Securities):

                             Wilmington Trust Company
                             Rodney Square North
                             1100 North Market Street
                             Wilmington, Delaware 19890-0001
                             Attention: Corporate Trust Administration
                             Telecopy: 302-651-8882
                             Telephone: 302-651-1000

               (b) If given to the Guarantor, at the Guarantor's mailing address
          set forth  below (or such  other  address  as the  Guarantor  may give
          notice  of to  the  Holders  of  the  Capital  Securities  and  to the
          Guarantee Trustee):

                             First Banks, Inc.
                             600 James S. McDonnell Blvd., Mail Code #014
                             Hazelwood, MO 63042
                             Attention: Allen H. Blake
                             Telecopy: (314) 592-6621
                             Telephone: (314) 592-6601

               (c) If given to any  Holder  of the  Capital  Securities,  at the
          address set forth on the books and records of the Issuer.

          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 8.4. Benefit.
             -------

          This Guarantee is solely for the benefit of the Holders of the Capital
Securities and, subject to Section 2.1(a),  is not separately  transferable from
the Capital Securities.

SECTION 8.5. Governing Law.
             -------------

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

SECTION 8.6. Counterparts.
             ------------

          This Guarantee may contain more than one  counterpart of the signature
page and  this Guarantee may be executed by the affixing of the signature of the

<PAGE>

Guarantor and the Guarantee Trustee 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.

               THIS  GUARANTEE  is  executed  as of the day and year first above
          written.

                                      FIRST BANKS, INC.,
                                         as Guarantor


                                      By:  /S/  Allen H. Blake
                                           -------------------------------------
                                         Name:  Allen H. Blake
                                         Title: President and Chief Operating
                                                Officer


                                      WILMINGTON TRUST COMPANY, as
                                         Guarantee Trustee


                                      By:  /s/  Anita E. Dallago
                                          --------------------------------------
                                         Name:  Anita E. Dallago
                                         Title: Senior Financial Services
                                                Officer

<PAGE>


                                                                    Exhibit 4.17















                        AMENDED AND RESTATED DECLARATION

                                    OF TRUST

                            FIRST BANK CAPITAL TRUST

                           Dated as of April 10, 2002


<PAGE>

<TABLE>
<CAPTION>


                                TABLE OF CONTENTS
                                                                                                     Page
                    ARTICLE I INTERPRETATION AND DEFINITIONS

<S>                                                                                                    <C>
SECTION 1.1.Definitions............................................................................    2

                            ARTICLE II - ORGANIZATION

SECTION 2.1. Name .................................................................................    9
SECTION 2.2. Office................................................................................    9
SECTION 2.3. Purpose...............................................................................    9
SECTION 2.4. Authority.............................................................................    9
SECTION 2.5. Title to Property of the Trust........................................................   10
SECTION 2.6. Powers and Duties of the Trustees and the Administrators..............................   10
SECTION 2.7. Prohibition of Actions by the Trust and the Trustees..................................   15
SECTION 2.8. Powers and Duties of the Institutional Trustee .......................................   15
SECTION 2.9. Certain Duties and Responsibilities of the Trustees and the Administrators............   17
SECTION 2.10.Certain Rights of Institutional Trustee...............................................   19
SECTION 2.11.Delaware Trustee......................................................................   21
SECTION 2.12.Execution of Documents................................................................   21
SECTION 2.13.Not Responsible for Recitals or Issuance of Securities................................   21
SECTION 2.14.Duration of Trust.....................................................................   22
SECTION 2.15.Mergers...............................................................................   22

                              ARTICLE III - SPONSOR

SECTION 3.1.Sponsor's Purchase of Common Securities................................................   24
SECTION 3.2 Responsibilities of the Sponsor........................................................   24

                    ARTICLE IV - TRUSTEES AND ADMINISTRATORS

SECTION 4.1  Number of Trustees....................................................................   24
SECTION 4.2  Delaware Trustee......................................................................   25
SECTION 4.3  Institutional Trustee; Eligibility....................................................   25
SECTION 4.4  Certain Qualifications of the Delaware Trustee Generally..............................   25
SECTION 4.5  Administrators........................................................................   26
SECTION 4.6  Delaware Trustee .....................................................................   26
SECTION 4.7  Appointment, Removal and Resignation of the Trustees and the Administrators...........   26
SECTION 4.8  Vacancies Among Trustees..............................................................   28
SECTION 4.9  Effect of Vacancies...................................................................   28
SECTION 4.10 Meetings of the Trustees and the Administrators.......................................   28
SECTION 4.11 Delegation of Power...................................................................   29
SECTION 4.12 Merger, Conversion, Consolidation or Succession to Business...........................   29

                           ARTICLE V - DISTRIBUTIONS

SECTION 5.1  Distributions.........................................................................   29

                       ARTICLE VI - ISSUANCE OF SECURITIES

SECTION 6.1  General Provisions Regarding Securities...............................................   30
SECTION 6.2  Paying Agent, Transfer Agent, Calculation Agent and Registrar.........................   31
SECTION 6.3  Form and Dating.......................................................................   31
SECTION 6.4  Mutilated, Destroyed, Lost or Stolen Certificates.....................................   32
SECTION 6.5  Temporary Securities..................................................................   32
SECTION 6.6  Cancellation..........................................................................   32
SECTION 6.7  Rights of Holders; Waivers of Past Defaults...........................................   33

               ARTICLE VII - DISSOLUTION AND TERMINATION OF TRUST

SECTION 7.1  Dissolution and Termination of Trust..................................................   35

                      ARTICLE VIII - TRANSFER OF INTERESTS

SECTION 8.1  General...............................................................................   36
SECTION 8.2  Transfer Procedures and Restrictions..................................................   37
SECTION 8.3  Deemed Security Holders...............................................................   39

         ARTICLE IX - LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 9.1  Liability.............................................................................   40
SECTION 9.2  Exculpation...........................................................................   40
SECTION 9.3  Fiduciary Duty........................................................................   40
SECTION 9.4  Indemnification.......................................................................   41
SECTION 9.5  Outside Businesses....................................................................   44
SECTION 9.6  Compensation; Fee.....................................................................   45
<PAGE>

                             ARTICLE X - ACCOUNTING

SECTION 10.1 Fiscal Year ..........................................................................   45
SECTION 10.2 Certain Accounting Matters............................................................   45
SECTION 10.3 Banking...............................................................................   46
SECTION 10.4 Withholding...........................................................................   46

                      ARTICLE XI - AMENDMENTS AND MEETINGS

SECTION 11.1 Amendments ...........................................................................   47
SECTION 11.2 Meetings of the Holders of the Securities; Action by Written Consent..................   49

   ARTICLE XII - REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE

SECTION 12.1 Representations and Warranties of Institutional Trustee...............................   50
SECTION 12.2 Representations and Warranties of Delaware Trustee....................................   51

                          ARTICLE XIII - MISCELLANEOUS

SECTION 13.1 Notices...............................................................................   52
SECTION 13.2 Governing Law.........................................................................   53
SECTION 13.3 Submission to Jurisdiction............................................................   53
SECTION 13.4 Intention of the Parties..............................................................   54
SECTION 13.5 Headings..............................................................................   54
SECTION 13.6 Successors and Assigns................................................................   54
SECTION 13.7 Partial Enforceability................................................................   54
SECTION 13.8 Counterparts..........................................................................   54

                              ANNEXES AND EXHIBITS

ANNEX I            Terms of Floating Rate TRUPS(R)and Floating Rate Common Securities

EXHIBIT A-1         Form of Capital Securities Certificate
EXHIBIT A-2         Form of Common Security Certificate
EXHIBIT B           Form of Transferee Certificate to be Executed by Transferees Other than QIBs
EXHIBIT C           Form of Transferor Certificate to be Executed for QIBs

</TABLE>

<PAGE>









                    AMENDED AND RESTATED DECLARATION OF TRUST

                                       OF

                            FIRST BANK CAPITAL TRUST

                                 April 10, 2002
<PAGE>

         AMENDED AND RESTATED DECLARATION OF TRUST (this  "Declaration"),  dated
and  effective as of April 10, 2002,  by the Trustees (as defined  herein),  the
Administrators  (as defined  herein),  the  Sponsor (as defined  herein) and the
holders from time to time of undivided beneficial interests in the assets of the
Trust (as defined herein) to be issued pursuant to this Declaration.

         WHEREAS,  certain of the Trustees,  the  Administrators and the Sponsor
established First Bank Capital Trust (the "Trust"),  a statutory  business trust
under the Business Trust Act (as defined  herein),  pursuant to a Declaration of
Trust,  dated  as  of  March  25,  2002  (the  "Original  Declaration"),  and  a
Certificate  of Trust filed with the Secretary of State of the State of Delaware
on  March  25,  2002,  for the sole  purpose  of  issuing  and  selling  certain
securities  representing  undivided  beneficial  interests  in the assets of the
Trust and investing the proceeds thereof in certain  debentures of the Debenture
Issuer (as defined herein) in connection with the MM Community  Funding III, Ltd
transaction;

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

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

         NOW,  THEREFORE,  it being  the  intention  of the  parties  hereto  to
continue the Trust as a statutory  business  trust under the Business  Trust Act
and that this Declaration constitutes the governing instrument of such statutory
business trust,  the Trustees  declare that all assets  contributed to the Trust
will be held in trust for the benefit of the holders,  from time to time, of the
securities  representing  undivided  beneficial  interests  in the assets of the
Trust issued hereunder,  subject to the provisions of this Declaration,  and, in
consideration  of the  mutual  covenants  contained  herein  and other  good and
valuable  consideration,  the  receipt  of which  is  hereby  acknowledged,  the
parties, intending to be legally bound hereby, amend and restate in its entirety
the Original Declaration and agree as follows:


<PAGE>



                                    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 or elsewhere herein have the respective meanings assigned to them
in this Section 1.1 or, if not defined in this Section 1.1 or elsewhere  herein,
in the Indenture;

         (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 (as defined  herein) 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.

         "Additional Interest" has the meaning set forth in Section 3.06 of the
Indenture.

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

         "Administrators"  means each of Allen H.  Blake and Lisa K.  Vansickle,
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.

         "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  enters 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  appoints a  receiver,  liquidator,  assignee,  custodian,  trustee,
sequestrator or similar  official of such Person or for any substantial  part of
its property,  or orders the winding-up or liquidation of its affairs,  and such
decree,  appointment or order remains  unstayed and in effect for a period of 90
consecutive days; or

         (b) such  Person  commences  a  voluntary  case  under  any  applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, consents
to the entry of an order for relief in an  involuntary  case under any such law,
or  consents  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 makes any general
assignment for the benefit of creditors,  or fails generally to pay its debts as
they become due.
<PAGE>

         "Business Day" means any day other than  Saturday,  Sunday or any other
day on which banking institutions in Wilmington,  Delaware, New York City or St.
Louis,  Missouri are  permitted or required by any  applicable  law or executive
order  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.

         "Calculation  Agent" has the meaning  set forth in Section  1.01 of the
Indenture.

         "Capital Securities" has the meaning set forth in Section 6.1(a).

         "Capital   Security   Certificate"   means  a  definitive   Certificate
registered  in  the  name  of  the  Holder   representing  a  Capital   Security
substantially in the form of Exhibit A-1.

         "Capital  Treatment  Event" has the meaning set forth in paragraph 4(a)
of Annex I.

         "Certificate" means any certificate evidencing Securities.

         "Certificate  of Trust" means the  certificate  of trust filed with the
Secretary  of State of the State of  Delaware  with  respect  to the  Trust,  as
amended and restated from time to time.

         "Closing Date" has the meaning set forth in the Placement Agreement.

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

         "Commission" means the Securities and Exchange Commission.

         "Common Securities" has the meaning set forth in Section 6.1(a)."Common
Security Certificate" means a definitive  Certificate  registered in the name of
the Holder  representing a Common Security  substantially in the form of Exhibit
A-2.

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

         "Comparable Treasury Issue" has the meaning set forth in paragraph 4(a)
of Annex I.

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

         "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 shall at all times be
located in the United States and at the date of execution of this Declaration is
located at Rodney Square North, 1100 North Market Street,  Wilmington,  Delaware
19890-0001, Attention: Corporate Trust Administration.

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

         "Covered  Person"  means:  (a) any  Administrator,  officer,  director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's  Affiliates;  and (b) any Holder of  Securities.  "Debenture
Issuer"  means  First  Banks,  Inc.,  a bank  holding  company  incorporated  in
Missouri,  in its  capacity  as issuer of the  Debentures  under the  Indenture.
"Debenture   Trustee"  means  Wilmington  Trust  Company,   a  Delaware  banking
corporation,  not in its  individual  capacity  but solely as trustee  under the
Indenture until a successor is appointed  thereunder,  and thereafter means such
successor trustee.

         "Debentures"   means  the  Floating  Rate  Junior   Subordinated   Debt
Securities due 2032 to be issued by the Debenture Issuer under the Indenture.
<PAGE>

         "Deferred  Interest"  means any interest on the  Debentures  that would
have been overdue and unpaid for more than one Distribution Payment Date but for
the  imposition of an Extension  Period,  and the interest that shall accrue (to
the extent that the payment of such  interest  is legally  enforceable)  on such
interest at the Coupon Rate in effect for each such Extension Period, compounded
semi-annually from the date on which such Deferred Interest would otherwise have
been due and payable until paid or made available for payment.

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

         "Delaware Trustee" has the meaning set forth in Section 4.2.

         "Direct Action" has the meaning set forth in Section 2.8(e).

         "Distribution" means a distribution payable to Holders of Securities in
accordance with Section 5.1.

         "Distribution Payment Date" has the meaning set forth in paragraph 2(e)
of Annex I.

         "Event  of  Default"  means the  occurrence  of an  Indenture  Event of
Default.

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

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

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

         "Fiduciary  Indemnified  Person"  shall mean each of the  Institutional
Trustee (including in its individual capacity),  the Delaware Trustee (including
in its individual  capacity),  any Affiliate of the Institutional Trustee or the
Delaware Trustee, and any officers, directors, shareholders,  members, partners,
employees, representatives,  custodians, nominees or agents of the Institutional
Trustee or the Delaware Trustee.

         "Fiscal Year" has the meaning set forth in Section 10.1

         "Guarantee" means the Guarantee Agreement,  dated as of April 10, 2002,
of the Sponsor in respect of the Capital Securities.

         "Holder"  means a Person in whose  name a  Certificate  representing  a
Security  is  registered  on the  register  maintained  by or on  behalf  of the
Registrar,  such  Person  being a  beneficial  owner  within the  meaning of the
Business Trust Act.

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

         "Indenture" means the Indenture,  dated as of April 10, 2002, among the
Debenture  Issuer and the  Debenture  Trustee,  and 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.

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

         "Interest"  means any interest  due on the  Debentures,  including  any
Deferred  Interest and  Defaulted  Interest (as each such term is defined in the
Indenture).
<PAGE>

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

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

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

         "Legal Action" has the meaning set forth in Section 2.8(e).

         "LIBOR"  means the London  Interbank  Offered Rate for  six-month  U.S.
Dollar  deposits in Europe as determined by the  Calculation  Agent according to
paragraph 2(b) of Annex I.

         "LIBOR  Banking Day" has the meaning set forth in paragraph  2(b)(1) of
Annex I.

         "LIBOR Business Day" has the meaning set forth in paragraph  2(b)(1) of
Annex I.

         "LIBOR  Determination  Date" has the  meaning  set  forth in  paragraph
2(b)(1) of Annex I.

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

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

         "Majority in  liquidation  amount of the  Securities"  means Holders 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.

         "Officers'   Certificate"   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 in this Declaration shall include:

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

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

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

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

         "Paying Agent" has the meaning set forth in Section 6.2.

         "Payment Amount" has the meaning set forth in Section 5.1.

         "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.
<PAGE>

         "Placement  Agreement"  means the Placement  Agreement  relating to the
offering and sale of Capital Securities.

         "PORTAL" has the meaning set forth in Section 2.6(a)(i).

         "Primary  Treasury  Dealer" has the meaning set forth in paragraph 4(a)
of Annex I.

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

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

         "QIB" means a  "qualified  institutional  buyer" as defined  under Rule
144A.

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

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

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

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

         "Registrar" has the meaning set forth in Section 6.2.

         "Reference Treasury Dealer" has the meaning set forth in paragraph 4(a)
of Annex I. "Reference  Treasury Dealer Quotations" has the meaning set forth in
paragraph 4(a) of Annex I.

         "Relevant Trustee" has the meaning set forth in Section 4.7(a).

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

         "Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional  Trustee with
direct responsibility for the administration of this Declaration,  including any
vice-president,  any  assistant  vice-president,  any  secretary,  any assistant
secretary,  the treasurer,  any assistant treasurer,  any trust officer or other
officer of the 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  Securities  Legend"  has the  meaning set forth in Section
8.2(c).

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

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

         "Rule 3a-7" means Rule 3a-7 under the Investment Company Act.

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

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

         "Sponsor"  means First Banks,  Inc.,  a bank holding  company that is a
U.S.  Person  incorporated  in Missouri,  or any  successor  entity in a merger,
consolidation or amalgamation  that is a U.S. Person, in its capacity as sponsor
of the Trust.

         "Successor  Delaware  Trustee"  has the  meaning  set forth in  Section
4.7(e).

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

         "Successor  Institutional Trustee" has the meaning set forth in Section
4.7(b).

         "Successor Securities" has the meaning set forth in Section 2.15(b).

         "Super  Majority" has the meaning set forth in paragraph  5(b) of Annex
I.

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

         "10%  in  liquidation  amount  of  the  Securities"  means  Holders  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.

         "Transfer Agent" has the meaning set forth in Section 6.2.

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

         "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).

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

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

         "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.

         "U.S.  Person"  means a United  States  Person as  defined  in  Section
7701(a)(30) of the Code.

                                   ARTICLE II

                                  ORGANIZATION

         SECTION 2.1.  Name.  The Trust is named "First Bank Capital  Trust," as
                       ----
such  name may be  modified  from time to time by the  Administrators  following
written notice to the  Institutional  Trustee and the Holders of the Securities.
The Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Administrators.

         SECTION 2.2. Office.  The address of the principal office of the Trust,
                      ------
which shall be in a State of the United  States or the District of Columbia,  is
600 James S.  McDonnell  Blvd.,  Mail Code  #014,  Hazelwood,  MO 63042.  On ten
Business  Days' written notice to the  Institutional  Trustee and the Holders of
the Securities, the Administrators may designate another principal office, which
shall be in a State of the United States or the District of Columbia.

         SECTION 2.3. Purpose. The exclusive purposes and functions of the Trust
                      -------
are (a) to issue  and  sell the  Securities  representing  undivided  beneficial
interests in the assets of the Trust, (b) to invest the gross proceeds from such
sale in the Debentures and (c) except as otherwise  limited herein, to engage in
only those other  activities  incidental  thereto  that are deemed  necessary or
advisable by the Institutional  Trustee,  including,  without limitation,  those
activities  specified  in this  Declaration.  The Trust shall not borrow  money,
issue debt or reinvest  proceeds  derived  from  investments,  pledge any of its
assets,  or otherwise  undertake (or permit to be undertaken)  any activity that
would cause the Trust not to be classified  for United States federal income tax
purposes as a grantor trust.

         SECTION  2.4.  Authority.  Except  as  specifically  provided  in  this
                        ---------
Declaration,  the  Institutional  Trustee  shall  have  exclusive  and  complete
authority to carry out the  purposes of the Trust.  An action taken by a Trustee
on behalf  of the Trust and in  accordance  with  such  Trustee's  powers  shall
constitute the act of and serve to bind the Trust.  In dealing with the Trustees
acting on behalf of the Trust,  no Person  shall be required to inquire into the
authority of the Trustees to bind the Trust.  Persons dealing with the Trust are
entitled to rely  conclusively on the power and authority of the Trustees as set
forth in this Declaration.  The Administrators shall have only those ministerial
duties set forth herein with respect to accomplishing  the purposes of the Trust
and are not intended to be trustees or fiduciaries  with respect to the Trust or
the Holders.  The  Institutional  Trustee shall have the right, but shall not be
obligated except as provided in Section 2.6, to perform those duties assigned to
the Administrators.

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

         SECTION 2.6. Powers and Duties of the Trustees and the  Administrators.
                      ---------------------------------------------------------

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

               (i) Each Administrator  shall have the power, duty and authority,
          and is hereby  authorized,  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,
               deliver and perform on behalf of the Trust,  such  agreements  as
               may be necessary or desirable in connection with the purposes and
               function  of the  Trust,  including  agreements  with the  Paying
               Agent, a Debenture  subscription  agreement between the Trust and
               the  Sponsor  and  a  Common  Securities  subscription  agreement
               between the Trust and the Sponsor;

                    (C)  ensuring   compliance   with  the  Securities  Act  and
               applicable state securities or blue sky laws;
<PAGE>

                    (D) if and at such time  determined  by the  Sponsor  at the
               request  of the  Holders,  assisting  in the  designation  of the
               Capital  Securities for trading in the Private Offering,  Resales
               and Trading through the Automatic  Linkages  ("PORTAL") system if
               available;

                    (E) 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,  including
               notice of any notice  received from the  Debenture  Issuer of its
               election  to defer  payments of  interest  on the  Debentures  by
               extending the interest payment period under the Indenture;

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

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

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

                    (I) unless otherwise determined by the Holders of a Majority
               in liquidation  amount of the Securities or as otherwise required
               by the  Business  Trust  Act,  to  execute on behalf of the Trust
               (either  acting  alone  or  together  with  any  or  all  of  the
               Administrators)  any documents that the  Administrators  have the
               power to execute pursuant to this Declaration;

                    (J) the taking of any action  incidental to the foregoing as
               the Sponsor or an  Administrator  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);

                    (K) to  establish a record date with  respect to all actions
               to be taken  hereunder that require a record date be established,
               including   Distributions,   voting   rights,   redemptions   and
               exchanges,  and to  issue  relevant  notices  to the  Holders  of
               Capital  Securities  and Holders of Common  Securities as to such
               actions and applicable record dates;

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

                    (M) to  negotiate  the  terms  of,  and  the  execution  and
               delivery of, the  Placement  Agreement  providing for the sale of
               the Capital Securities;

                    (N) to employ or otherwise engage employees, agents (who may
               be designated as officers  with titles),  managers,  contractors,
               advisors,   attorneys   and   consultants   and  pay   reasonable
               compensation for such services;

                    (O) to incur  expenses  that are  necessary or incidental to
               carry out any of the purposes of the Trust;

                    (P) to give the certificate required by ss. 314(a)(4) of the
               Trust  Indenture  Act  to  the   Institutional   Trustee,   which
               certificate may be executed by an Administrator; and

                    (Q) to take all action that may be necessary or  appropriate
               for the  preservation  and the  continuation of the Trust's valid
               existence,  rights,  franchises  and  privileges  as a  statutory
               business  trust under the laws of each  jurisdiction  (other than
               the State of  Delaware)  in which such  existence is necessary to
               protect  the  limited  liability  of the  Holders of the  Capital
               Securities  or to enable  the Trust to effect  the  purposes  for
               which the Trust was created.
<PAGE>

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

                    (A) the establishment of the Property Account;

                    (B) the receipt of the Debentures;

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

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

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

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

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

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

                    (I) after any Event of Default  (of which the  Institutional
               Trustee has  knowledge (as provided in Section  2.10(m)  hereof))
               (provided,  that such Event of Default is not by or with  respect
                --------
               to  the  Institutional   Trustee),   the  taking  of  any  action
               incidental to the foregoing as the Institutional Trustee may from
               time to time  determine  is necessary or advisable to give effect
               to the terms of this  Declaration  and protect and  conserve  the
               Trust   Property   for  the  benefit  of  the  Holders   (without
               consideration  of the effect of any such action on any particular
               Holder);

                    (J) to take all action that may be necessary or  appropriate
               for the  preservation  and the  continuation of the Trust's valid
               existence,  rights,  franchises  and  privileges  as a  statutory
               business trust under the laws of the State of Delaware to protect
               the limited liability of the Holders of the Capital Securities or
               to enable  the Trust to effect the  purposes  for which the Trust
               was created; and

                    (K) to undertake  any actions set forth in ss. 317(a) of the
               Trust Indenture Act.

               (iii)  The  Institutional   Trustee  shall  have  the  power  and
          authority,  and is  hereby  authorized,  to act on behalf of the Trust
          with  respect  to  any  of  the  duties,  liabilities,  powers  or the
          authority of the Administrators set forth in Section  2.6(a)(i)(E) and
          (F)  herein  but  shall  not  have a duty to do any  such  act  unless
          specifically  requested to do so in writing by the Sponsor,  and shall
          then be fully  protected in acting  pursuant to such written  request;
          and  in  the  event  of  a   conflict   between   the  action  of  the
          Administrators and the action of the Institutional Trustee, the action
          of the Institutional Trustee shall prevail.
<PAGE>

         (b) So long as this  Declaration  remains in effect,  the Trust (or the
Trustees or  Administrators  acting on behalf of the Trust) shall not  undertake
any business,  activities or transaction  except as expressly provided herein or
contemplated hereby. In particular,  neither the Trustees nor the Administrators
may cause the Trust to (i) acquire any  investments  or engage in any activities
not  authorized by this  Declaration,  (ii) sell,  assign,  transfer,  exchange,
mortgage,  pledge,  set-off or otherwise dispose of any of the Trust Property or
interests  therein,  including to Holders,  except as expressly provided herein,
(iii) take any  action  that  would  cause (or in the case of the  Institutional
Trustee, to the actual knowledge of a Responsible Officer would cause) the Trust
to fail or cease to  qualify as a "grantor  trust"  for  United  States  federal
income tax purposes, (iv) incur any indebtedness for borrowed money or issue any
other  debt 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 subject to reimbursement  under
Section  9.6(a),  defend  all  claims  and  demands  of all  Persons at any time
claiming  any lien on any of the Trust  Property  adverse to the interest of the
Trust or the Holders in their capacity as Holders.

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

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

               (ii) the determination of the States in which to take appropriate
          action to  qualify  or  register  for sale all or part of the  Capital
          Securities and the  determination of any and all such acts, other than
          actions  which  must be taken by or on  behalf of the  Trust,  and the
          advisement  of and direction to the Trustees of actions they must take
          on behalf of the Trust,  and the  preparation for execution and filing
          of any documents to be executed and filed by the Trust or on behalf of
          the Trust,  as the 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; and

               (iii) 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  and the  Holders of a Majority  in
liquidation  amount of the Common  Securities  are  authorized  and  directed to
conduct  the affairs of the Trust and to operate the Trust so that (i) the Trust
will not be deemed to be an "investment company" required to be registered under
the Investment  Company Act (in the case of the  Institutional  Trustee,  to the
actual knowledge of a Responsible Officer),  and (ii) the Trust will not fail to
be  classified  as  a  grantor  trust  for  United  States  federal  income  tax
purposes(in the case of the Institutional  Trustee, to the actual knowledge of a
Responsible  Officer) and (iii) the Trust will not take any action  inconsistent
with the treatment of the Debentures as indebtedness of the Debenture Issuer for
United  States  federal  income tax purposes  (in the case of the  Institutional
Trustee, to the actual knowledge of a Responsible  Officer). In this connection,
the Institutional  Trustee,  the Administrators and the Holders of a Majority in
liquidation  amount of the Common  Securities are authorized to take any action,
not inconsistent with applicable laws or this Declaration,  as amended from time
to time, that each of the Institutional  Trustee,  the  Administrators  and such
Holders  determine in their  discretion  to be  necessary or desirable  for such
purposes,  even if such action adversely affects the interests of the Holders of
the Capital Securities.

         (e)  All  expenses  incurred  by the  Administrators  or  the  Trustees
pursuant  to this  Section  2.6  shall be  reimbursed  by the  Sponsor,  and the
Trustees shall have no obligations with respect to such expenses.

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

         (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 in
accordance with this Declaration.

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

         SECTION  2.7.  Prohibition  of Actions  by the Trust and the  Trustees.
                        -------------------------------------------------------

         The  Trust   shall  not,   and  the   Institutional   Trustee  and  the
Administrators  shall not, and the Administrators  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  and the
Administrators shall not cause the Trust to:

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

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

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

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

         (e)  possess  any power or  otherwise  act in such a way as to vary the
Trust Property or the terms of the Securities;

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

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

         SECTION  2.8.   Powers  and  Duties  of  the   Institutional   Trustee.
                         ------------------------------------------------------

         (a) The  legal  title to the  Debentures  shall be owned by and held of
record in the name of the Institutional  Trustee in trust for the benefit of the
Trust.  The  right,  title and  interest  of the  Institutional  Trustee  to the
Debentures  shall  vest  automatically  in  each  Person  who may  hereafter  be
appointed as Institutional  Trustee in accordance with Section 4.7. 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.
<PAGE>

         (c) The Institutional Trustee shall:

               (i)  establish  and  maintain a segregated  non-interest  bearing
          trust  account  (the  "Property  Account")  in the  United  States (as
          defined in Treasury  Regulations section  301.7701-7),  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
          5.1.  Funds in the Property  Account  shall be held  uninvested  until
          disbursed in accordance with this Declaration;

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

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

         (d) The Institutional Trustee 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) The  Institutional  Trustee  may  bring or  defend,  pay,  collect,
compromise,  arbitrate,  resort to legal  action with  respect to, or  otherwise
adjust claims or demands of or against, the Trust (a "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 on the  Debentures  on the date such interest or principal
is otherwise  payable (or in the case of redemption,  on the  redemption  date),
then a Holder of the Capital  Securities may directly institute a proceeding for
enforcement  of payment to such  Holder of the  principal  of or interest on the
Debentures having a principal amount equal to the aggregate  liquidation  amount
of the Capital  Securities  of such  Holder (a "Direct  Action") on or after the
respective due date specified in the Debentures.  In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of the Capital Securities to the extent of any payment
made by the  Debenture  Issuer to such Holder of the Capital  Securities in such
Direct Action;  provided,  however,  that a Holder of the Common  Securities may
                --------   -------
exercise such right of  subrogation  only if no 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 the Securities pursuant
          to the terms of the Securities and this  Declaration  (including Annex
          I); or

               (ii) a Successor Institutional Trustee has been appointed and has
          accepted that appointment in accordance with Section 4.7.

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

         (h) The  Institutional  Trustee  must  exercise the powers set forth in
this Section 2.8 in a manner that is consistent  with the purposes and functions
of the Trust set out in Section 2.3,  and the  Institutional  Trustee  shall not
take any action that is  inconsistent  with the  purposes  and  functions of the
Trust set out in Section 2.3.

         SECTION 2.9.  Certain Duties and  Responsibilities  of the Trustees and
                       ---------------------------------------------------------
the Administrators.
------------------

         (a) The  Institutional  Trustee,  before the occurrence of any Event of
Default  (of which the  Institutional  Trustee  has  knowledge  (as  provided in
Section 2.10(m)  hereof)) 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 (of
which the  Institutional  Trustee has knowledge (as provided in Section  2.10(m)
hereof)),  has occurred  (that has not been cured or waived  pursuant to Section
6.7),  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  any  Trustee or
Administrator  to expend or risk its own funds or otherwise  incur any financial
liability in the performance of any of its duties hereunder,  or in the exercise
of any of its  rights  or  powers,  if it  shall  have  reasonable  grounds  for
believing that repayment of such funds or adequate indemnity  satisfactory to it
against such risk or liability is not  reasonably  assured to it. Whether or not
therein expressly so provided,  every provision of this Declaration  relating to
the  conduct or  affecting  the  liability  of or  affording  protection  to the
Trustees  or the  Administrators  shall be  subject  to the  provisions  of this
Article.  Nothing in this  Declaration  shall be  construed to release a Trustee
from liability for its own negligent  action,  its own negligent failure to act,
or its own willful misconduct. Nothing in this Declaration shall be construed to
release an Administrator  from liability for its own gross negligent action, its
own gross negligent failure to act, or its own willful misconduct. To the extent
that,  at law or in  equity,  a  Trustee  or an  Administrator  has  duties  and
liabilities  relating  to  the  Trust  or  to  the  Holders,   such  Trustee  or
Administrator  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 the  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
the Trustees.

         (c) All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities  shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds  from the Trust  Property to enable the  Institutional  Trustee or a
Paying Agent to make payments in accordance with the terms hereof.  Each Holder,
by its acceptance of a Security,  agrees that it will look solely to the revenue
and  proceeds  from the Trust  Property  to the  extent  legally  available  for
distribution   to  it  as  herein   provided  and  that  the  Trustees  and  the
Administrators  are not personally liable to it for any amount  distributable in
respect of any Security or for any other  liability in respect of any  Security.
This Section  2.9(c) does not limit the liability of the Trustees  expressly set
forth  elsewhere  in this  Declaration  or,  in the  case  of the  Institutional
Trustee, in the Trust Indenture Act.

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

               (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
          in  writing  with the  Sponsor;  and money  held by the  Institutional
          Trustee need not be  segregated  from other funds held by it except in
          relation  to the  Property  Account  maintained  by the  Institutional
          Trustee  pursuant  to  Section  2.8(c)(i)  and  except  to the  extent
          otherwise required by law; and

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

         SECTION 2.10. Certain Rights of Institutional  Trustee.  Subject to the
                       ----------------------------------------
provisions of Section 2.9:

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

         (b) if  (i) in  performing  its  duties  under  this  Declaration,  the
Institutional  Trustee is  required  to decide  between  alternative  courses of
action,  (ii) in  construing  any of the  provisions  of this  Declaration,  the
Institutional  Trustee finds the same ambiguous or  inconsistent  with any other
provisions contained herein, or (iii) the Institutional Trustee is unsure of the
application of any provision of this Declaration,  then, except as to any matter
as to which the  Holders of Capital  Securities  are  entitled to vote under the
terms of this Declaration, the Institutional Trustee may deliver a notice to the
Sponsor  requesting the Sponsor's 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 negligence or
willful misconduct;

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

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

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

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

         (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
Common Securities and the Capital  Securities,  which  instructions may be given
only by the Holders of the same  proportion in liquidation  amount of the Common
Securities  and the  Capital  Securities  as would be  entitled  to  direct  the
Institutional  Trustee under the terms of the Common  Securities and the Capital
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) the Institutional Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible  Officer of the Institutional  Trustee has
actual  knowledge of such event or the  Institutional  Trustee  receives written
notice of such event from any Holder, except with respect to an Event of Default
pursuant to Sections 5.01(a) or 5.01(b) of the Indenture (other than an Event of
Default  resulting  from the  default in the payment of  Additional  Interest or
premium, if any, if the Institutional  Trustee does not have actual knowledge or
written notice that such payment is due and payable), of which the Institutional
Trustee shall be deemed to have knowledge;

         (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

<PAGE>

and effective to perform any such action and no third party shall be required to
inquire as to the authority of the Institutional  Trustee to so act or as to its
compliance  with any of the terms and  provisions of this  Declaration,  both of
which shall be  conclusively  evidenced  by the  Institutional  Trustee's or its
agent's taking such action; and

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

         SECTION 2.11. Delaware Trustee.  Notwithstanding any other provision of
                       ----------------
this  Declaration  other than Section 4.2, 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 may be required under the  Business
Trust  Act).  Except as set forth in Section  4.2,  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 2.12. Execution of Documents. 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 and  deliver on
behalf of the Trust any documents, agreements, instruments  or certificates that
the  Trustees  or  the  Administrators,  as  the case may be, have the power and
authority to execute pursuant to Section 2.6.

         SECTION  2.13.  Not    Responsible    for   Recitals   or  Issuance  of
                ----------------------------------------------------------------
Securities.
----------

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

         SECTION 2.14. Duration of Trust. The Trust, unless dissolved pursuant
                       -----------------
to  the  provisions of  Article VII hereof, shall have existence for thirty-five
(35) years from the Closing Date.

         SECTION 2.15. Mergers.
                       -------

         (a) The Trust may not consolidate,  amalgamate,  merge with or into, or
be  replaced  by,  or  convey,  transfer  or lease  its  properties  and  assets
substantially  as an  entirety to any  corporation  or other  Person,  except as
described in this Section  2.15 and except with respect to the  distribution  of
Debentures  to Holders of  Securities  pursuant  to  Section  7.1(a)(iv)  of the
Declaration or Section 4 of Annex I.

         (b) The  Trust  may,  with the  consent  of the  Administrators  (which
consent  will not be  unreasonably  withheld)  and  without  the  consent of the
Institutional  Trustee,  the  Delaware  Trustee or the  Holders  of the  Capital
Securities,  consolidate,  amalgamate, merge with or into, or be replaced by, or
convey,  transfer  or  lease  its  properties  and  assets  as  an  entirety  or
substantially  as an entirety to 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:

                    (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;
<PAGE>

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

               (iii)  the  Capital   Securities  or  any  Successor   Securities
          (excluding any securities  substituted for the Common  Securities) are
          listed or quoted, or any Successor Securities will be listed or quoted
          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,  replacement,
          conveyance,  transfer or lease does not cause the  Capital  Securities
          (including   any  Successor   Securities)  to  be  downgraded  by  any
          nationally recognized statistical rating organization,  if the Capital
          Securities are then rated;

               (v)  such  merger,  consolidation,   amalgamation,   replacement,
          conveyance,  transfer or lease 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,
          replacement,  conveyance,  transfer or lease, the Trust has received a
          written opinion of a nationally recognized  independent counsel to the
          Trust experienced in such matters to the effect that:

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

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

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

               (viii) the Sponsor  guarantees the  obligations of such Successor
          Entity under the Successor  Securities to the same extent  provided by
          the Guarantee, the Debentures and this Declaration; and

               (ix)   prior  to  such   merger,   consolidation,   amalgamation,
          replacement,  conveyance, transfer or lease, the Institutional Trustee
          shall have received an Officers' Certificate of the Administrators and
          an  opinion  of  counsel,  each  to the  effect  that  all  conditions
          precedent  of  this  paragraph  (b)  to  such  transaction  have  been
          satisfied.
<PAGE>

         (c) Notwithstanding  Section 2.15(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 be  replaced  by, or convey,
transfer or lease its properties and assets as an entirety or  substantially  as
an  entirety  to, any other  Person or permit any other  Person to  consolidate,
amalgamate,   merge  with  or  into,  or  replace  it  if  such   consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or Successor  Entity to be  classified  as other than a grantor  trust for
United States federal income tax purposes.

                                   ARTICLE III

                                     SPONSOR

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

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

         (a) to  determine  the  States in which to take  appropriate  action to
qualify or register for sale of 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;

         (b) to prepare for filing and request the  Administrators  to cause the
filing by the Trust,  as may be  appropriate,  of an  application  to the PORTAL
system,  for  listing  or  quotation  upon  notice of  issuance  of any  Capital
Securities,  as  requested  by the  Holders  of not  less  than  a  Majority  in
liquidation amount of the Capital Securities; and

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

                                   ARTICLE IV

                           TRUSTEES AND ADMINISTRATORS

         SECTION 4.1. Number of Trustees. The number of Trustees initially shall
                      ------------------
be two, and:

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

         (b) after the  issuance of any  Securities,  the number of Trustees
may be increased or decreased by vote of the Holder of a Majority in liquidation
amount of the Common  Securities voting as a class at a meeting of the Holder of
the Common Securities; provided, however, that there shall be a Delaware Trustee
                       --------  -------
if required by Section  4.2;  and there shall always be one Trustee who shall be
the Institutional  Trustee,  and such Trustee may also serve as Delaware Trustee
if it meets the applicable  requirements,  in which case Section 2.11 shall have
no application to such entity in its capacity as Institutional Trustee.

         SECTION 4.2. Delaware Trustee.  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
<PAGE>

         (b) if not a natural  person,  an entity which is  organized  under the
laws of the United States or any State thereof or the District of Columbia,  has
its principal  place of business in the State of Delaware,  and otherwise  meets
the requirements of applicable law, including ss.3807 of the Business Trust Act.

         SECTION 4.3. 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;

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

               (iii) be a banking corporation organized and doing business under
          the laws of the United  States of  America or any State  thereof or of
          the  District of Columbia and  authorized  under such laws to exercise
          corporate  trust powers,  having a combined  capital and surplus of at
          least  fifty  million  U.S.  dollars  ($50,000,000),  and  subject  to
          supervision or  examination by federal,  State or District of Columbia
          authority. If such corporation publishes reports of condition at least
          annually, pursuant to law or to the requirements of the supervising or
          examining  authority  referred to above, then for the purposes of this
          Section  4.3(a)(iii),   the  combined  capital  and  surplus  of  such
          corporation  shall be deemed to be its combined capital and surplus as
          set forth in its most recent report of condition so published.

         (b) If at any time the Institutional Trustee shall cease to be eligible
to so act under Section  4.3(a),  the  Institutional  Trustee shall  immediately
resign in the manner and with the effect set forth in Section 4.7.

         (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 this Declaration.

         (d)  The  initial  Institutional  Trustee  shall  be  Wilmington  Trust
Company.

         SECTION 4.4. Certain Qualifications of the Delaware Trustee Generally.
                      --------------------------------------------------------
The Delaware Trustee shall be a U.S. Person and 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 4.5. Administrators. Each Administrator shall be a U.S. Person.
                      --------------
There  shall  at  all  times be  at least  one   Administrator.  Except where  a
requirement  for  action  by a  specific  number of Administrators  is expressly
set forth in this  Declaration  and except with respect to any action the taking
of  which  is  the  subject  of a  meeting  of  the  Administrators,  any action
required or permitted to be  taken  by  the  Administrators  may  be  taken  by,
and any power of the Administrators may be exercised by, or with the consent of,
any one such Administrator acting alone.

         SECTION 4.6. Initial Delaware Trustee.  The  initial  Delaware  Trustee
                      ------------------------
shall be Wilmington Trust Company.

        SECTION 4.7. Appointment, Removal and Resignation of  the  Trustees  and
                     -----------------------------------------------------------
the Administrators.
--- --------------

         (a) No resignation  or removal of any Trustee (the "Relevant  Trustee")
and no appointment of a successor  Trustee pursuant to this Article shall become
effective  until the  acceptance  of  appointment  by the  successor  Trustee in
accordance with the applicable requirements of this Section 4.7.

         (b)  Subject to Section  4.7(a),  a Relevant  Trustee may resign at any
time by giving  written  notice  thereof to the Holders of the Securities and by
appointing  a  successor   Relevant   Trustee.   Upon  the  resignation  of  the
Institutional  Trustee,  the Institutional  Trustee shall appoint a successor by

<PAGE>

requesting  from at least three  Persons  meeting the  eligibility  requirements
their expenses and charges to serve as the successor  Institutional Trustee on a
form provided by the Administrators,  and selecting the Person who agrees to the
lowest  expense and charges  (the  "Successor  Institutional  Trustee").  If the
instrument  of acceptance by the  successor  Relevant  Trustee  required by this
Section 4.7 shall not have been delivered to the Relevant Trustee within 60 days
after the giving of such notice of  resignation or delivery of the instrument of
removal,  the Relevant  Trustee may petition,  at the expense of the Trust,  any
federal,  State or District of Columbia court of competent  jurisdiction for the
appointment of a successor  Relevant  Trustee.  Such court may thereupon,  after
prescribing  such  notice,  if any,  as it may deem  proper,  appoint a Relevant
Trustee. The Institutional  Trustee shall have no liability for the selection of
such successor pursuant to this Section 4.7.

         (c) Unless an Event of Default shall have  occurred and be  continuing,
any Trustee may be removed at any time by an act of the Holders of a Majority in
liquidation amount of the Common Securities. If any Trustee shall be so removed,
the  Holders of the Common  Securities,  by act of the  Holders of a Majority in
liquidation  amount of the Common Securities  delivered to the Relevant Trustee,
shall promptly appoint a successor Relevant Trustee,  and such successor Trustee
shall comply with the applicable  requirements  of this Section 4.7. If an Event
of Default shall have occurred and be continuing,  the Institutional  Trustee or
the Delaware Trustee,  or both of them, may be removed by the act of the Holders
of a Majority in liquidation amount of the Capital Securities,  delivered to the
Relevant Trustee (in its individual capacity and on behalf of the Trust). If any
Trustee shall be so removed,  the Holders of Capital  Securities,  by act of the
Holders of a Majority  in  liquidation  amount of the  Capital  Securities  then
outstanding  delivered  to  the  Relevant  Trustee,  shall  promptly  appoint  a
successor Relevant Trustee or Trustees,  and such successor Trustee shall comply
with the applicable  requirements of this Section 4.7. If no successor  Relevant
Trustee shall have been so appointed by the Holders of a Majority in liquidation
amount of the Capital Securities and accepted appointment in the manner required
by this Section 4.7 within 30 days after  delivery of an  instrument of removal,
the Relevant  Trustee or any Holder who has been a Holder of the  Securities for
at least six months may, on behalf of himself and all others similarly situated,
petition  any  federal,  State  or  District  of  Columbia  court  of  competent
jurisdiction for the appointment of a successor Relevant Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a successor Relevant Trustee or Trustees.

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

         (e)  Notwithstanding  the  foregoing  or any  other  provision  of this
Declaration,  in the event a Delaware Trustee who is a natural person dies or is
adjudged by a court to have become  incompetent  or  incapacitated,  the vacancy
created  by  such  death,  incompetence  or  incapacity  may  be  filled  by the
Institutional  Trustee  following  the  procedures in this Section 4.7 (with the
successor  being a  Person  who  satisfies  the  eligibility  requirement  for a
Delaware  Trustee  set  forth  in this  Declaration)  (the  "Successor  Delaware
Trustee").

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

<PAGE>

Relevant Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Securities and the Trust
subject to the payment of all unpaid  fees,  expenses  and  indemnities  of such
retiring Relevant Trustee.

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

         (h) The Holders of the Capital Securities will have no right to vote to
appoint,  remove or replace the  Administrators,  which voting rights are vested
exclusively in the Holders of the Common Securities.

         (i) Any  successor  Delaware  Trustee  shall file an  amendment  to the
Certificate  of Trust  with the  Secretary  of  State of the  State of  Delaware
identifying the name and principal place of business of such Delaware Trustee in
the State of Delaware.

         SECTION 4.8. Vacancies Among Trustees. If  a  Trustee  ceases  to  hold
                      ------------------------
office for any reason and the number of  Trustees  is not  reduced  pursuant  to
Section 4.1, or if the number of Trustees is increased  pursuant to Section 4.1,
a vacancy shall occur. A resolution  certifying the existence of such vacancy by
the Trustees or, if there are more than two, a majority of the Trustees shall be
conclusive  evidence of the  existence  of such  vacancy.  The vacancy  shall be
filled with a Trustee appointed in accordance with Section 4.7.

         SECTION 4.9. 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 or terminate this Declaration.  Whenever a vacancy in the number
of Trustees  shall occur,  until such vacancy is filled by the  appointment of a
Trustee in accordance with Section 4.7, 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 4.10. Meetings of the Trustees and the Administrators. Meetings
                       -----------------------------------------------
of the Trustees or the  Administrators  shall be held from time to time upon the
call of any Trustee or  Administrator,  as applicable.  Regular  meetings of the
Trustees and the  Administrators,  respectively,  may be in person in the United
States or by telephone,  at a place (if applicable) and time fixed by resolution
of the Trustees or the  Administrators,  as applicable.  Notice of any in-person
meetings  of the  Trustees  or the  Administrators  shall be hand  delivered  or
otherwise  delivered in writing  (including  by  facsimile,  with a hard copy by
overnight  courier)  not less than 48 hours before such  meeting.  Notice of any
telephonic  meetings of the  Trustees  or the  Administrators  or any  committee
thereof shall be hand delivered or otherwise  delivered in writing (including by
facsimile,  with a hard copy by overnight courier) not less than 24 hours before
a  meeting.  Notices  shall  contain a brief  statement  of the time,  place and
anticipated  purposes  of the  meeting.  The  presence  (whether in person or by
telephone)  of a Trustee or an  Administrator,  as the case may be, at a meeting
shall constitute a waiver of notice of such meeting except where a Trustee or an
Administrator,  as the case may be, attends a meeting for the express purpose of
objecting to the  transaction of any activity on the ground that the meeting has
not  been  lawfully  called  or  convened.  Unless  provided  otherwise  in this
Declaration,  any action of the Trustees or the Administrators,  as the case may
be,  may be taken at a meeting  by vote of a  majority  of the  Trustees  or the
Administrators  present (whether in person or by telephone) and eligible to vote
with respect to such matter;  provided, that, in the case of the Administrators,
                              --------
a Quorum is present,  or without a meeting by the unanimous  written  consent of
the Trustees or the Administrators, as the case may be. Meetings of the Trustees
and the Administrators together shall be held from time to time upon the call of
any Trustee or Administrator.

         SECTION 4.11. Delegation of Power.
                       -------------------

         (a) Any Trustee or any Administrator, as the case may be, may, by power
of attorney consistent with applicable law, delegate to any other natural person
over the age of 21 that is a U.S.  Person  his or her power for the  purpose  of
executing any documents,  instruments or other writings  contemplated in Section
2.6.
<PAGE>

         (b) The Trustees shall have power to delegate from time to time to such
of their number or to any officer of the Trust that is a U.S. Person,  the doing
of such things and the execution of such instruments or other writings either in
the name of the Trust or the names of the  Trustees or otherwise as the Trustees
may  deem  expedient,  to  the  extent  such  delegation  is not  prohibited  by
applicable law or contrary to the provisions of the Trust, as set forth herein.

         SECTION 4.12. Merger,  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 and, provided,  further, that such Person shall file an amendment to the
             --------   -------
Certificate  of Trust with the  Secretary  of State of the State of  Delaware as
contemplated in Section 4.7(i).

                                    ARTICLE V

                                  DISTRIBUTIONS

         SECTION 5.1. Distributions. Holders   shall  receive  Distributions  in
                      -------------
accordance  with the  applicable  terms  of the  relevant  Holder's  Securities.
Distributions  shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their  respective  terms. If and
to the extent that the Debenture  Issuer makes a payment of interest  (including
any Additional Interest or Deferred Interest) 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 in the Property  Account for that purpose,  to make a
distribution (a "Distribution") of the Payment Amount to Holders.

                                   ARTICLE VI

                             ISSUANCE OF SECURITIES

         SECTION 6.1. General Provisions Regarding Securities.
                      ---------------------------------------

         (a) The Administrators shall on behalf of the Trust issue one series of
capital  securities,  evidenced by a  certificate  substantially  in the form of
Exhibit A-1,  representing  undivided  beneficial interests in the assets of the
Trust  and  having  such  terms  as are  set  forth  in  Annex  I (the  "Capital
Securities"),  and one series of common  securities,  evidenced by a certificate
substantially  in the form of Exhibit  A-2,  representing  undivided  beneficial
interests  in the assets of the Trust and 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.  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 facsimile or manual signature
of any  Administrator.  In case any  Administrator  of the Trust who shall  have
signed any of the  Securities  shall cease to be such  Administrator  before the
Certificates  so signed  shall be  delivered  by the  Trust,  such  Certificates
nevertheless may be delivered as though the person who signed such  Certificates
had not ceased to be such Administrator. Any Certificate may be signed on behalf
of the  Trust by such  person  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

<PAGE>

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 been
authenticated under this Declaration.  Upon written order of the Trust signed by
one  Administrator,  the  Institutional  Trustee shall  authenticate the Capital
Securities  for  original  issue.  The  Institutional  Trustee  may  appoint  an
authenticating  agent  that  is  a  U.S.  Person  acceptable  to  the  Trust  to
authenticate  the  Capital  Securities.   A  Common  Security  need  not  be  so
authenticated and shall be valid upon execution by one or more Administrators.

         (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,  and each  Holder  thereof  shall be  entitled  to the  benefits
provided by this Declaration.

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

         SECTION 6.2. Paying Agent,  Transfer  Agent,   Calculation   Agent  and
                      ----------------------------------------------------------
Registrar.
----------

         (a) The Trust shall  maintain  in  Wilmington,  Delaware,  an office or
agency where the Securities  may be presented for payment (the "Paying  Agent"),
and an office or agency where  Securities may be presented for  registration  of
transfer or exchange (the "Transfer Agent"). The Trust shall keep or cause to be
kept at such  office  or  agency  a  register  for the  purpose  of  registering
Securities and transfers and exchanges of  Securities,  such register to be held
by a registrar  (the  "Registrar").  The  Administrators  may appoint the Paying
Agent,  the  Registrar  and the  Transfer  Agent,  and may  appoint  one or more
additional Paying Agents, 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 or co-Transfer  Agent. The  Administrators may change
any Paying Agent,  Transfer  Agent or Registrar at any time without prior notice
to any Holder. The Administrators shall notify the Institutional  Trustee of the
name and address of any Paying Agent,  Transfer  Agent and Registrar not a party
to  this   Declaration.   The   Administrators   hereby  initially  appoint  the
Institutional  Trustee to act as Paying Agent,  Transfer Agent and Registrar for
the Capital  Securities and the Common Securities at its Corporate Trust Office.
The Institutional  Trustee or any of its Affiliates in the United States may act
as Paying Agent, Transfer Agent or Registrar.

         (b) The Trust  shall also  appoint a  Calculation  Agent,  which  shall
determine the Coupon Rate in accordance  with the terms of the  Securities.  The
Trust initially appoints the Institutional Trustee as Calculation Agent.

         SECTION 6.3. Form and Dating.
                      ---------------

         (a) The Capital Securities and the Institutional  Trustee's certificate
of authentication thereon shall be substantially in the form of Exhibit A-1, and
the Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby  incorporated in and expressly made a part of this  Declaration.
Certificates may be typed, printed,  lithographed or engraved or may be produced
in any other  manner  as is  reasonably  acceptable  to the  Administrators,  as
conclusively  evidenced by their  execution  thereof.  The  Securities  may have
letters, numbers,  notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange rule, agreements to
which the Trust is subject, if any, or usage (provided,  that any such notation,
                                              --------
legend or endorsement is in a form acceptable to the Sponsor).  The Trust at the
direction of the Sponsor  shall furnish any such legend not contained in Exhibit
A-1 to the  Institutional  Trustee in writing.  Each Capital  Security  shall be
dated the date of its authentication. The terms and provisions of the Securities
set forth in Annex I and the forms of  Securities  set forth in Exhibits A-1 and
A-2 are part of the terms of this Declaration and to the extent applicable,  the

<PAGE>

Institutional Trustee, the Delaware Trustee, the Administrators and the Sponsor,
by their  execution and delivery of this  Declaration,  expressly  agree to such
terms and provisions and to be bound thereby.  Capital Securities will be issued
only in blocks having a stated liquidation amount of not less than $100,000.

         (b) The  Capital  Securities  are being  offered  and sold by the Trust
pursuant to the Placement  Agreement in definitive form,  registered in the name
of the  Holder  thereof,  without  coupons  and with the  Restricted  Securities
Legend.

         SECTION 6.4. 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  its  satisfaction  of  the
destruction, loss or theft of any Certificate; and

         (b) there shall be delivered to the Registrar,  the  Administrators and
the Institutional  Trustee such security or indemnity as may be required by them
to keep  each of them  harmless;  then,  in the  absence  of  notice  that  such
Certificate shall have been acquired by a 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  6.4, 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.

         SECTION 6.5. Temporary Securities.  Until   definitive  Securities  are
                      --------------------
ready for  delivery,  the  Administrators  may  prepare  and, in the case of the
Capital  Securities,  the Institutional  Trustee shall  authenticate,  temporary
Securities.  Temporary  Securities  shall be substantially in form of definitive
Securities but may have variations that the Administrators  consider appropriate
for temporary  Securities.  Without unreasonable delay, the Administrators shall
prepare and, in the case of the Capital  Securities,  the Institutional  Trustee
shall authenticate definitive Securities in exchange for temporary Securities.

         SECTION 6.6. Cancellation. The  Administrators  at any time may deliver
                      ------------
Securities to the Institutional  Trustee for  cancellation.  The Registrar shall
forward  to the  Institutional  Trustee  any  Securities  surrendered  to it for
registration of transfer, redemption or payment. The Institutional Trustee shall
promptly  cancel  all  Securities  surrendered  for  registration  of  transfer,
payment,  replacement  or  cancellation  and  shall  dispose  of  such  canceled
Securities as the  Administrators  direct.  The Administrators may not issue new
Securities to replace Securities that have been paid or that have been delivered
to the Institutional Trustee for cancellation.

         SECTION 6.7. Rights of Holders; Waivers of Past Defaults.
                      -------------------------------------------

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

         (b) For so long as any Capital Securities remain outstanding,  if, upon
an Indenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding  Debentures fail to declare
the principal of all of the  Debentures to be immediately  due and payable,  the
Holders  of not less  than a  Majority  in  liquidation  amount  of the  Capital
Securities then  outstanding  shall have the right to make such declaration by a
notice in writing to the  Institutional  Trustee,  the Sponsor and the Debenture
Trustee.
<PAGE>

         (c) At any time after a declaration of acceleration with respect to the
Debentures  has been made and  before a judgment  or decree  for  payment of the
money  due has  been  obtained  by the  Debenture  Trustee  as  provided  in the
Indenture, if the Institutional Trustee, subject to the provisions hereof, fails
to annul any such  declaration  and waive such default,  the Holders of not less
than a Majority  in  liquidation  amount of the Capital  Securities,  by written
notice to the Institutional  Trustee, the Sponsor and the Debenture Trustee, may
rescind and annul such declaration and its consequences if:

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

               (A)  all  overdue   installments   of  interest  on  all  of  the
          Debentures;

               (B) any accrued Deferred Interest on all of the Debentures;

               (C) the  principal of (and  premium,  if any, on) any  Debentures
          that  have  become  due  otherwise   than  by  such   declaration   of
          acceleration  and interest and Deferred  Interest  thereon at the rate
          borne by the Debentures; and

               (D) all sums paid or advanced by the Debenture  Trustee under the
          Indenture  and  the  reasonable  compensation,   documented  expenses,
          disbursements   and  advances  of  the   Debenture   Trustee  and  the
          Institutional Trustee, their agents and counsel; and

          (ii) all Events of Default with respect to the Debentures,  other than
     the  non-payment  of the  principal of the  Debentures  that has become due
     solely by such  acceleration,  have been  cured or  waived as  provided  in
     Section 5.07 of the Indenture.

         (d) The  Holders of not less than a Majority in  liquidation  amount of
the  Capital  Securities  may,  on  behalf  of the  Holders  of all the  Capital
Securities,  waive any past  default  or Event of  Default,  except a default or
Event of Default in the payment of principal or interest (unless such default or
Event  of  Default  has  been  cured  and a sum  sufficient  to pay all  matured
installments  of interest and principal due otherwise than by  acceleration  has
been deposited  with the Debenture  Trustee) or a default or Event of Default in
respect of a covenant or provision  that under the Indenture  cannot be modified
or amended without the consent of the holder of each outstanding  Debenture.  No
such  rescission  shall  affect  any  subsequent  default  or  impair  any right
consequent thereon.

         (e)  Upon  receipt  by the  Institutional  Trustee  of  written  notice
declaring such an acceleration,  or rescission and annulment thereof, by Holders
of any part of the Capital  Securities,  a record date shall be established  for
determining  Holders of outstanding  Capital Securities entitled to join in such
notice,  which  record  date  shall be at the close of  business  on the day the
Institutional  Trustee receives such notice. The Holders on such record date, or
their duly designated proxies, and only such Persons,  shall be entitled to join
in such notice,  whether or not such Holders  remain  Holders  after such record
date; provided, that, unless such declaration of acceleration, or rescission and
      --------
annulment,  as the case may be,  shall have  become  effective  by virtue of the
requisite  percentage  having  joined in such notice prior to the day that is 90
days after such record date,  such notice of  declaration  of  acceleration,  or
rescission and annulment,  as the case may be, shall  automatically  and without
further  action by any Holder be canceled and of no further  effect.  Nothing in
this  paragraph  shall  prevent a Holder,  or a proxy of a Holder,  from giving,
after  expiration of such 90-day period,  a new written notice of declaration of
acceleration,  or rescission and annulment thereof,  as the case may be, that is
identical to a written notice that has been canceled  pursuant to the proviso to
the preceding  sentence,  in which event a new record date shall be  established
pursuant to the provisions of this Section 6.7.
<PAGE>

         (f) Except as  otherwise  provided in this  Section 6.7, the Holders of
not less than a Majority in liquidation amount of the Capital Securities may, on
behalf of the Holders of all the Capital  Securities,  waive any past default or
Event of Default and its  consequences.  Upon such  waiver,  any such default or
Event of  Default  shall  cease to exist,  and any  default  or Event of Default
arising  therefrom shall be deemed to have been cured, for every purpose of this
Declaration,  but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.

                                   ARTICLE VII

                      DISSOLUTION AND TERMINATION OF TRUST

SECTION 7.1. Dissolution and Termination of Trust.
             ------------------------------------

         (a) The Trust shall dissolve on the first to occur of :

               (i) unless earlier  dissolved,  on April 22, 2037, the expiration
          of the term of the Trust;

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

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

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

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

         (b) As soon as is practicable after the occurrence of an event referred
to in Section 7.1(a),  and after satisfaction of liabilities to creditors of the
Trust as required by  applicable  law,  including  Section  3808 of the Business
Trust  Act,  and  subject  to the terms set forth in Annex I, the  Institutional
Trustee shall terminate the Trust by filing a certificate of  cancellation  with
the Secretary of State of the State of Delaware.

         (c) The  provisions  of Section  2.9 and  Article IX shall  survive the
termination of the Trust.


<PAGE>



                                  ARTICLE VIII

                              TRANSFER OF INTERESTS

        SECTION 8.1. General.
                     -------

         (a) Where Capital  Securities  are  presented to the  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 transfers and exchanges,  the
Trust shall  issue and the  Institutional  Trustee  shall  authenticate  Capital
Securities at the Registrar's request.

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

         (c) Capital Securities may only be transferred, in whole or in part, in
accordance  with the terms and conditions set forth in this  Declaration  and in
the  terms  of the  Capital  Securities.  To the  fullest  extent  permitted  by
applicable  law, any transfer or purported  transfer of any Security not made in
accordance with this Declaration shall be null and void and will be deemed to be
of no legal effect  whatsoever and any such transferee shall be deemed not to be
the holder of such Capital Securities for any purpose, including but not limited
to the receipt of Distributions on such Capital Securities,  and such transferee
shall be deemed to have no interest whatsoever in such Capital Securities.

         (d) The Registrar shall provide for the  registration of Securities and
of transfers of Securities,  which will be effected without charge but only upon
payment (with such indemnity as the Registrar may require) in respect of any tax
or other  governmental  charges  that may be imposed  in  relation  to it.  Upon
surrender for  registration of transfer of any  Securities,  the Registrar shall
cause one or more new  Securities  to be  issued  in the name of the  designated
transferee or transferees. Any Security issued upon any registration of transfer
or exchange  pursuant to the terms of this  Declaration  shall evidence the same
Security and shall be entitled to the same benefits  under this  Declaration  as
the Security  surrendered upon such registration of transfer or exchange.  Every
Security  surrendered  for  registration  of transfer  shall be accompanied by a
written  instrument of transfer in form similar to Exhibits B and C satisfactory
to the  Registrar  duly  executed by the Holder or such  Holder's  attorney duly
authorized in writing.  Each Security  surrendered for  registration of transfer
shall be  canceled  by the  Institutional  Trustee  pursuant  to Section  6.6. 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) Neither the Trust nor the Registrar shall be required (i) to issue,
register the transfer of, or exchange any Securities  during a period  beginning
at the opening of business 15 days before the day of any selection of Securities
for redemption and ending at the close of business on the earliest date on which
the relevant notice of redemption is deemed to have been given to all Holders of
the  Securities to be redeemed,  or (ii) to register the transfer or exchange of
any  Security  so  selected  for  redemption  in whole or in  part,  except  the
unredeemed portion of any Security being redeemed in part.

         SECTION 8.2. Transfer Procedures and Restrictions.
                      ------------------------------------

         (a) The Capital Securities shall bear the Restricted  Securities Legend
(as defined below),  which shall not be removed 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 the Securities Act or that such  Securities are not  "restricted"  within the
meaning  of  Rule  144  under  the  Securities   Act.  Upon  provision  of  such

<PAGE>

satisfactory  evidence,  the Institutional  Trustee, at the written direction of
the Trust,  shall  authenticate and deliver Capital  Securities that do not bear
the Restricted Securities Legend.

         (b) When  Capital  Securities  are  presented to the  Registrar  (x) to
register  the  transfer of such  Capital  Securities,  or (y) to  exchange  such
Capital  Securities  for an equal number of Capital  Securities  represented  by
different  Certificates,  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 Capital Securities surrendered for registration
     --------  -------
of transfer  or exchange  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 (i) if such Capital  Securities  are being  transferred to a QIB,
accompanied  by a certificate of the  transferor  substantially  in the form set
forth  as  Exhibit  C  hereto  or (ii)  if such  Capital  Securities  are  being
transferred  otherwise  than  to a  QIB,  accompanied  by a  certificate  of the
transferee substantially in the form set forth as Exhibit B hereto.

         (c) Except as permitted by Section 8.2(a),  each Capital Security 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 OR ANY OTHER
APPLICABLE   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 ONLY
(A) TO THE  DEBENTURE  ISSUER OR THE TRUST,  (B) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"),  TO A PERSON THE HOLDER  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,  (C) PURSUANT
TO AN EXEMPTION FROM REGISTRATION TO AN "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 AN
"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 (D)  PURSUANT  TO  ANOTHER  AVAILABLE  EXEMPTION  FROM  THE
REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT,  SUBJECT  TO THE  DEBENTURE
ISSUER'S  AND THE  TRUST'S  RIGHT  PRIOR TO ANY  SUCH  OFFER,  SALE OR  TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION  AND/OR  OTHER  INFORMATION   SATISFACTORY  TO  EACH  OF  THEM  IN
ACCORDANCE  WITH THE AMENDED AND RESTATED  DECLARATION OF TRUST, A COPY OF WHICH
MAY BE  OBTAINED  FROM THE  DEBENTURE  ISSUER OR THE  TRUST.  THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE  HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

         THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS
AND  WARRANTS  THAT IT WILL NOT ENGAGE IN HEDGING  TRANSACTIONS  INVOLVING  THIS
SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

         THE HOLDER OF THIS  SECURITY  BY ITS  ACCEPTANCE  HEREOF  ALSO  AGREES,
REPRESENTS  AND  WARRANTS  THAT  IT  IS  NOT  AN  EMPLOYEE  BENEFIT,  INDIVIDUAL
RETIREMENT  ACCOUNT  OR  OTHER  PLAN OR  ARRANGEMENT  SUBJECT  TO TITLE I OF THE
EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR

<PAGE>

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

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

         THIS  SECURITY  WILL BE ISSUED  AND MAY BE  TRANSFERRED  ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN
EXCESS  THEREOF.  ANY  ATTEMPTED  TRANSFER OF THIS  SECURITY IN A BLOCK HAVING A
LIQUIDATION  AMOUNT OF LESS THAN  $100,000  SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE
THE HOLDER OF THIS SECURITY FOR ANY PURPOSE,  INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY,  AND SUCH PURPORTED  TRANSFEREE SHALL
BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

         (d) Capital  Securities  may only be  transferred  in minimum blocks of
$100,000 aggregate  liquidation amount (100 Capital Securities) and multiples of
$1,000 in excess  thereof.  Any  attempted  transfer of Capital  Securities in a
block  having an aggregate  liquidation  amount of less than  $100,000  shall be
deemed  to be  void  and of no  legal  effect  whatsoever.  Any  such  purported
transferee shall be deemed not to be a Holder of such Capital Securities for any
purpose,  including,  but not limited to, the receipt of  Distributions  on such
Capital  Securities,  and such purported  transferee  shall be deemed to have no
interest whatsoever in such Capital Securities.

         SECTION 8.3. Deemed Security  Holders.  The Trust, the  Administrators,
                      ------------------------
the Trustees,  the Paying Agent,  the Transfer  Agent or the Registrar may treat
the Person in whose name any  Certificate  shall be  registered on the books and
records  of  the  Trust  as the  sole  holder  of  such  Certificate  and of the
Securities   represented   by  such   Certificate   for  purposes  of  receiving
Distributions and for all other purposes whatsoever and, accordingly,  shall not
be bound to  recognize  any  equitable  or other  claim to or  interest  in such
Certificate or in the Securities  represented by such Certificate on the part of
any Person,  whether or not the Trust,  the  Administrators,  the Trustees,  the
Paying Agent,  the Transfer  Agent or the  Registrar  shall have actual or other
notice thereof.


<PAGE>



                                   ARTICLE IX

                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

         SECTION 9.1. Liability.
                      ---------

         (a) Except as expressly  set forth in this  Declaration,  the Guarantee
and the terms of the Securities, the Sponsor shall not be:

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

               (ii)  required  to pay  to the  Trust  or to  any  Holder  of the
          Securities anydeficit 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 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,   except  as  otherwise
specifically set forth herein.

         SECTION 9.2. Exculpation.
                      -----------

         (a) No Indemnified  Person shall be liable,  responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss,  damage
or claim incurred by reason of any act or omission  performed or omitted by such
Indemnified  Person in good  faith on  behalf of the Trust and in a manner  such
Indemnified  Person reasonably  believed to be within the scope of the authority
conferred on such Indemnified  Person by this Declaration or by law, except that
an Indemnified Person (other than an Administrator) 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 and except that an
Administrator  shall be liable for any such loss,  damage or claim  incurred  by
reason of such  Administrator'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 9.3. Fiduciary Duty.
                      --------------

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

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

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

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

         SECTION 9.4. Indemnification.
                      ---------------

        (a)   (i) The Sponsor shall  indemnify,  to the fullest 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
     such Person is or was an  Indemnified  Person against  expenses  (including
     attorneys'  fees  and  expenses),  judgments,  fines  and  amounts  paid in
     settlement  actually and  reasonably  incurred by such Person in connection
     with such action, suit or proceeding if such Person acted in good faith and
     in a manner such Person 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 such 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  such  Person
     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 such conduct was unlawful.

          (ii) The Sponsor shall  indemnify,  to the fullest 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 such Person is or was an Indemnified  Person against expenses
     (including  attorneys' fees and expenses) actually and reasonably  incurred
     by such Person in connection  with the defense or settlement of such action
     or suit if such  Person  acted in good  faith and in a manner  such  Person
     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 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 9.4(a),  or in defense of any claim,  issue or matter therein,
     such Person shall be indemnified,  to the fullest extent  permitted by law,
     against  expenses  (including  attorneys'  fees and expenses)  actually and
     reasonably incurred by such Person in connection therewith.
<PAGE>

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

          (v) To the  fullest  extent  permitted  by  law,  expenses  (including
     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 9.4(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  such  Person is not  entitled  to be  indemnified  by the
     Sponsor  as  authorized  in  this  Section  9.4(a).   Notwithstanding   the
     foregoing,  no advance shall be made by the Sponsor if a  determination  is
     reasonably  and  promptly  made  (1) in the case of a  Company  Indemnified
     Person  (A) by  the  Administrators  by a  majority  vote  of a  Quorum  of
     disinterested  Administrators,  (B) 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 (C) by the Common
     Security  Holder of the  Trust,  that,  based  upon the facts  known to the
     Administrators,  counsel  or the  Common  Security  Holder at the time such
     determination is made, such  Indemnified  Person acted in bad faith or in a
     manner that such Person either believed to be opposed to or did not believe
     to be in the best interests of the Trust,  or, with respect to any criminal
     proceeding,  that such Indemnified  Person believed or had reasonable cause
     to believe  such  conduct was  unlawful,  or (2) in the case of a Fiduciary
     Indemnified Person, by independent legal counsel in a written opinion that,
     based upon the facts known to the counsel at the time such determination is
     made, such  Indemnified  Person acted in bad faith or in a manner that such
     Indemnified  Person either  believed to be opposed to or did not believe to
     be in the best  interests  of the Trust,  or, with  respect to any criminal
     proceeding,  that such Indemnified  Person believed or had reasonable cause
     to believe such conduct was unlawful. In no event shall any advance be made
     (i) to a Company  Indemnified Person in instances where the Administrators,
     independent   legal  counsel  or  the  Common  Security  Holder  reasonably
     determine that such Person deliberately  breached such Person's duty to the
     Trust or its Common or  Capital  Security  Holders  or (ii) to a  Fiduciary
     Indemnified  Person in instances where  independent  legal counsel promptly
     and   reasonably   determines  in  a  written   opinion  that  such  Person
     deliberately  breached  such  Person's  duty to the Trust or its  Common or
     Capital Security Holders.

         (b) The Sponsor shall  indemnify,  to the fullest  extent  permitted by
applicable  law,  each  Indemnified  Person  from and  against any and all loss,
damage, liability, tax (other than taxes based on the income of such Indemnified
Person),  penalty, expense or claim of any kind or nature whatsoever incurred by
such Indemnified Person arising out of or in connection with or by reason of the
creation,  administration or termination of the Trust, or any act or omission of
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 authority
conferred  on such  Indemnified  Person  by  this  Declaration,  except  that no
Indemnified  Person shall be entitled to be  indemnified in respect of any loss,
damage,  liability,  tax, penalty, expense or claim incurred by such Indemnified
Person by reason of negligence or willful  misconduct  with respect to such acts
or omissions.

         (c) The  indemnification  and  advancement of expenses  provided by, or
granted  pursuant  to, the other  paragraphs  of this  Section  9.4 shall not be

<PAGE>

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 such Person's  official
capacity and as to action in another  capacity  while  holding such office.  All
rights to indemnification  under this Section 9.4 shall be deemed to be provided
by a contract between the Sponsor and each Indemnified Person who serves in such
capacity  at any time  while  this  Section  9.4 is in  effect.  Any  repeal  or
modification of this Section 9.4 shall not affect any rights or obligations then
existing.

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

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

         (f) The  indemnification  and  advancement of expenses  provided by, or
granted  pursuant to, this Section 9.4 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.

         (g) The provisions of this Section 9.4 shall survive the termination of
this  Declaration  or the earlier  resignation  or removal of the  Institutional
Trustee. The obligations of the Sponsor under this Section 9.4 to compensate and
indemnify  the  Trustees and to pay or  reimburse  the  Trustees  for  expenses,
disbursements and advances shall constitute additional  indebtedness  hereunder.
Such  additional  indebtedness  shall be  secured by a lien prior to that of the
Securities  upon all  property  and funds held or  collected  by the Trustees as
such,  except  funds held in trust for the benefit of the holders of  particular
Capital  Securities,  provided,  that the  Sponsor  is the  holder of the Common
                      --------
Securities.

         SECTION 9.5. Outside Businesses.  Any Covered Person, the Sponsor,  the
                      ------------------
Delaware Trustee and the  Institutional  Trustee (subject to Section 4.3(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.  None of any Covered Person, the Sponsor,  the Delaware Trustee or the
Institutional Trustee shall be obligated to present any particular investment or
other  opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust,  could be taken by the Trust, and any Covered Person,
the Sponsor,  the Delaware Trustee and the Institutional  Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity.  Any
Covered Person, the Delaware Trustee and the Institutional Trustee 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.


<PAGE>



         SECTION 9.6. Compensation; Fee.
                      -----------------

         (a)       The Sponsor agrees:

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

                         (ii) except as otherwise  expressly provided herein, to
                    reimburse  the  Trustees  upon  request for all  reasonable,
                    documented 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   attributable   to  their   negligence  or  willful
                    misconduct.

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

                                    ARTICLE X

                                   ACCOUNTING

         SECTION 10.1.  Fiscal Year.  he fiscal year (the "Fiscal  Year") of the
                        -----------
Trust shall be the calendar  year, or such other yearas is required by the Code.

         SECTION 10.2.  Certain Accounting Matters.
                        --------------------------

         (a) At all times during the existence of the Trust, the  Administrators
shall  keep,  or cause to be kept at the  principal  office  of the Trust in the
United  States,  as  defined  for  purposes  of  Treasury   Regulations  section
301.7701-7, full books of account, records and supporting documents, which shall
reflect in reasonable detail each transaction of the Trust. The books of account
shall be  maintained on the accrual  method of  accounting,  in accordance  with
generally accepted accounting principles, consistently applied.

         (b) The  Administrators  shall either (i) cause each Form 10-K and Form
10-Q prepared by the Sponsor and filed with the  Commission  in accordance  with
the Exchange Act to be  delivered to each Holder of  Securities,  within 90 days
after the  filing of each Form 10-K and  within 30 days after the filing of each
Form 10-Q or (ii) cause to be prepared at the  principal  office of the Trust in
the United  States,  as defined for  purposes of  Treasury  Regulations  section
301.7701-7,  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  Form 1099 or such other annual United States
federal income tax information  statement required by the Code,  containing such
information  with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations.  Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrators shall endeavor
to deliver all such statements  within 30 days after the end of each Fiscal Year
of the Trust.

         (d) The  Administrators  shall cause to be duly  prepared in the United
States, as defined for purposes of Treasury Regulations section 301.7701-7,  and
filed an annual United States  federal  income tax return on a Form 1041 or such

<PAGE>

other form  required  by United  States  federal  income tax law,  and any other
annual income tax returns required to be filed by the  Administrators  on behalf
of the Trust with any state or local taxing authority.

         (e) So  long  as  the  only  Holder  of the  Capital  Securities  is MM
Community Funding III, Ltd, the Administrators  will cause the Sponsor's reports
on Form FR Y-9C,  FR Y-9LP and FR Y-6 to be  delivered  to the  Holder  promptly
following their filing with the Federal Reserve.

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

         SECTION  10.4.  Withholding.  The  Institutional  Trustee or any Paying
                         -----------
Agent and the  Administrators  shall  comply with all  withholding  requirements
under United States federal,  state and local law. The Institutional  Trustee or
any  Paying  Agent  shall  request,   and  each  Holder  shall  provide  to  the
Institutional  Trustee or any Paying Agent,  such forms or  certificates  as are
necessary to establish an exemption from withholding with respect to the Holder,
and any  representations  and  forms as shall  reasonably  be  requested  by the
Institutional Trustee or any Paying Agent to assist it in determining the extent
of, and in fulfilling,  its withholding  obligations.  The Administrators  shall
file required forms with applicable  jurisdictions and, unless an exemption from
withholding is properly  established by a Holder,  shall remit amounts  withheld
with respect to the Holder to applicable  jurisdictions.  To the extent that the
Institutional  Trustee or any Paying  Agent is required to withhold and pay over
any amounts to any authority with respect to distributions or allocations to any
Holder,  the amount  withheld shall be deemed to be a Distribution to the Holder
in the amount of the withholding.  In the event of any claimed  overwithholding,
Holders shall be limited to an action  against the applicable  jurisdiction.  If
the amount  required to be withheld was not withheld  from actual  Distributions
made,  the  Institutional  Trustee  or any Paying  Agent may  reduce  subsequent
Distributions by the amount of such withholding.

                                   ARTICLE XI

                             AMENDMENTS AND MEETINGS

         SECTION 11.1. Amendments.
                       ----------

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

               (i) the Institutional Trustee,

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

               (iii)  if the  amendment  affects  the  rights,  powers,  duties,
          obligations or immunities of the  Administrators,  the Administrators,
          and

               (iv) the  Holders  of a  Majority  in  liquidation  amount of the
          Common Securities.

         (b)  Notwithstanding  any  other  provision  of  this  Article  XI,  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 that all  conditions  precedent to the execution
               and delivery of such amendment have been satisfied; or
<PAGE>

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

                    (A) cause the Trust to cease 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;

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

                    (D)  cause  the  Debenture  Issuer  to be unable to treat an
               amount equal to the Liquidation Amount of the Debentures as "Tier
               1 Capital" for purposes of the capital adequacy guidelines of the
               Federal Reserve.

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

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

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

         (f) The rights of the  Holders  of the  Capital  Securities  and Common
Securities,  as applicable,  under Article IV 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  or
Common Securities, as applicable.

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

                    (i) cure any ambiguity;

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

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

                    (iv)  modify,  eliminate  or add to any  provision  of  this
               Declaration  to such  extent as may be  necessary  or  desirable,
               including,  without limitation,  to ensure that the Trust will be
               classified  for United States  federal income tax purposes at all
               times as a grantor  trust and will not be required to register as
               an Investment Company under the Investment Company Act (including
               without  limitation  to conform to any change in Rule 3a-5,  Rule
               3a-7 or any other  applicable  rule under the Investment  Company
               Act or written change in interpretation or application thereof by
               any  legislative  body,  court,  government  agency or regulatory
               authority)  which  amendment  does  not have a  material  adverse
               effect on the right,  preferences or privileges of the Holders of
               Securities;

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

         SECTION  11.2.  Meetings  of the Holders of the  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 not
less than 10% in liquidation amount of such class of Securities.  Such direction
shall  be given  by  delivering  to the  Administrators  one or more  calls in a
writing  stating  that the  signing  Holders  of the  Securities  wish to call a

<PAGE>

meeting and indicating the general or specific  purpose for which the meeting is
to be called.  Any Holders of the Securities  calling a meeting shall specify in
writing the  Certificates  held by the Holders of the Securities  exercising the
right  to  call  a  meeting  and  only  those  Securities  represented  by  such
Certificates  shall be counted for purposes of determining  whether the required
percentage set forth in the second sentence of this paragraph has been met.

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

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

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

                    (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  the
               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; provided,
                                                                       --------
               however,  that each  meeting  shall be  conducted  in the  United
               -------
               States (as that term is defined in Treasury  Regulations  section
               301.7701-7).

                                   ARTICLE XII

                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
                              AND DELAWARE TRUSTEE

         SECTION 12.1.  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:

         (a) the  Institutional  Trustee  is a banking  corporation  with  trust
powers, duly organized,  validly existing and in good standing under the laws of
the State of Delaware with trust power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of, this Declaration;

         (b) the Institutional  Trustee has a combined capital and surplus of at
least fifty million U.S. dollars ($50,000,000);

         (c) the Institutional  Trustee is not an affiliate of the Sponsor,  nor
does the Institutional  Trustee offer or provide credit or credit enhancement to
the Trust;

         (d)  the  execution,  delivery  and  performance  by the  Institutional
Trustee of this Declaration has been duly authorized by all necessary  corporate
action on the part of the Institutional  Trustee. This Declaration has been duly
executed and  delivered by the  Institutional  Trustee,  and under  Delaware law
(excluding  any  securities  laws)  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 and the  discretion of the court  (regardless  of
whether considered in a proceeding in equity or at law);

         (e) 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

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

         SECTION 12.2.  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) if it is  not a  natural  person,  the  Delaware  Trustee  is  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware;  (b)  if it is not a  natural  person,  the  execution,  delivery  and
performance by the Delaware Trustee of this Declaration has been duly authorized

<PAGE>

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

         (c)  if it  is  not a  natural  person,  the  execution,  delivery  and
performance of this  Declaration by the Delaware  Trustee does not conflict with
or constitute a breach of the charter or by-laws of the Delaware Trustee;

         (d) it has trust power and  authority  to execute and  deliver,  and to
carry out and perform its obligations under the terms of, this Declaration;

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

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

                                  ARTICLE XIII

                                  MISCELLANEOUS

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

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

                        First Bank Capital Trust
                        c/o First Banks, Inc.
                        600 James S. McDonnell Blvd., Mail Code #014
                        Hazelwood, MO 63042
                        Attention: Allen H. Blake
                        Telecopy: (314) 592-6621
                        Telephone: (314) 592-6601

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

                        Wilmington Trust Company
                        Rodney Square North
                        1100 North Market Street
                        Wilmington, Delaware 19890-0001
                        Attention: Corporate Trust Administration
                        Telecopy: (302) 651-8882
                        Telephone: (302) 651-1000
<PAGE>

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

                        Wilmington Trust Company
                        Rodney Square North
                        1100 North Market Street
                        Wilmington, Delaware 19890-0001
                        Attention: Corporate Trust Administration
                        Telecopy: (302) 651-8882
                        Telephone: (302) 651-1000

         (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):

                        First Banks, Inc.
                        600 James S. McDonnell Blvd., Mail Code #014
                        Hazelwood, MO 63042
                        Attention: Allen H. Blake
                        Telecopy: (314) 592-6621
                        Telephone: (314) 592-6601

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

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

         SECTION  13.2.  Governing  Law.  This  Declaration  and the  rights and
                         --------------
obligations  of the parties  hereunder  shall be governed by and  interpreted in
accordance with the law of the State of Delaware and all rights, obligations 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.

         SECTION 13.3. Submission to Jurisdiction.
                       --------------------------

         (a)  Each of the  parties  hereto  agrees  that  any  suit,  action  or
proceeding  arising out of or based upon this  Declaration,  or the transactions
contemplated  hereby, may be instituted in any of the courts of the State of New
York and the United States District Courts,  in each case located in the Borough
of Manhattan,  City and State of New York,  and further  agrees to submit to the
jurisdiction  of any competent  court in the place of its corporate  domicile in
respect of actions  brought  against it as a defendant.  In addition,  each such
party irrevocably  waives, to the fullest extent permitted by law, any objection
which it may now or  hereafter  have to the  laying of the  venue of such  suit,
action or proceeding  brought in any such court and irrevocably waives any claim
that any such  suit,  action or  proceeding  brought  in any such court has been
brought in an inconvenient  forum and  irrevocably  waives any right to which it
may be entitled on account of its place of corporate  domicile.  Each such party
hereby  irrevocably  waives  any and all  right to  trial  by jury in any  legal
proceeding  arising out of or relating to this  Declaration or the  transactions
contemplated  hereby.  Each  such  party  agrees  that  final  judgment  in  any
proceedings  brought in such a court shall be conclusive and binding upon it and
may be  enforced  in any court to the  jurisdiction  of which it is subject by a
suit upon such judgment.

         (b)  Each  of the  Sponsor  and the  Holder  of the  Common  Securities
irrevocably consents to the service of process on it in any such suit, action or
proceeding  in any such court by the mailing  thereof by registered or certified
mail, postage prepaid, to it at its address given in or pursuant to Section 13.1
hereof.
<PAGE>

         (c) To the extent  permitted by law,  nothing  herein  contained  shall
preclude  any party from  effecting  service of process in any lawful  manner or
from bringing any suit,  action or proceeding in respect of this  Declaration in
any other state, country or place.

         SECTION  13.4.  Intention  of the Parties.  It is the  intention of the
                         -------------------------
parties hereto that the Trust be classified for United States federal income tax
purposes  as a  grantor  trust.  The  provisions  of this  Declaration  shall be
interpreted to further this intention of the parties.

         SECTION 13.5.  Headings.  Headings  contained in this  Declaration  are
                        --------
inserted for convenience of reference only and do not affect the  interpretation
of this Declaration or any provision hereof.

         SECTION 13.6. Successors and Assigns.  Whenever in this Declaration any
                       ----------------------
of the parties  hereto is named or referred  to, the  successors  and assigns of
such party shall be deemed to be included,  and all covenants and  agreements in
this  Declaration  by the Sponsor and the  Trustees  shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.

         SECTION  13.7.  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 13.8. 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.


<PAGE>



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

                                            WILMINGTON TRUST COMPANY,
                                                 as Delaware Trustee

                                            By: /s/ Anita E. Dallago
                                               ---------------------------------
                                            Name:   Anita E. Dallago
                                            Title   Senior Financial Services
                                                    Officer

                                            WILMINGTON TRUST COMPANY,
                                                 as Institutional Trustee

                                            By: /s/ Anita E. Dallago
                                               ---------------------------------
                                            Name:   Anita E. Dallago
                                            Title   Senior Financial Services
                                                    Officer

                                            FIRST BANKS, INC.
                                                 as Sponsor

                                            By: /s/Allen H. Blake
                                               ---------------------------------
                                            Name:  Allen H. Blake
                                            Title: President and Chief Operating
                                                   Officer

                                            By: /s/ Allen H. Blake
                                               ---------------------------------
                                                 Administrator

                                            By: /s/ Lisa K. Vansickle
                                               ---------------------------------
                                                 Administrator


<PAGE>


                                     ANNEX I

                                    TERMS OF
                           FLOATING RATE TRUPS(R) AND
                         FLOATING RATE COMMON SECURITIES

         Pursuant  to Section 6.1 of the Amended  and  Restated  Declaration  of
Trust,  dated  as of  April  10,  2002  (as  amended  from  time  to  time,  the
"Declaration"), the designation, rights, privileges,  restrictions,  preferences
and  other  terms  and  provisions  of the  Capital  Securities  and the  Common
Securities are set out below (each  capitalized term used but not defined herein
has the meaning set forth in the Declaration):

         1.  Designation and Number.
             ----------------------

         (a) Capital Securities. 25,000 Capital Securities of First Bank Capital
Trust (the "Trust"), with an aggregate stated liquidation amount with respect to
the  assets of the Trust of Twenty  Five  Million  Dollars  ($25,000,000)  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 the "Floating Rate TRUPS(R)" (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.  774 Common Securities of the Trust (the "Common
Securities") will be evidenced by Common Security Certificates  substantially in
the form of Exhibit A-2 to the  Declaration,  with such  changes  and  additions
thereto or deletions  therefrom as may be required by ordinary usage,  custom or
practice. In the absence of an Event of Default, the Common Securities will have
an aggregate stated  liquidation  amount with respect to the assets of the Trust
of  Seven  Hundred  Seventy  Four  Thousand  Dollars  ($774,000)  and  a  stated
liquidation  amount with respect to the assets of the Trust of $1,000 per Common
Security.

         2. Distributions.
            -------------

         (a)  Distributions  payable  on  each  Security  will be  payable  at a
variable per annum rate of interest,  reset  semi-annually,  equal to LIBOR,  as
determined  on  the  LIBOR   Determination   Date  immediately   preceding  each
Distribution  Payment  Date,  plus  3.875%  (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;  provided,
                                                                       --------
that the applicable  Coupon Rate may not exceed 11.00% through the  Distribution
Payment Date in April 2007. Except as set forth below in respect of an Extension
Period,  Distributions in arrears for more than one semi-annual period will bear
interest thereon compounded semi-annually at the applicable Coupon Rate for each
such  semi-annual  period (to the extent  permitted by applicable law). The term
"Distributions" as used herein includes cash distributions,  any such compounded
distributions  and any  Additional  Interest  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 in the Property  Account
therefor.  The amount of A-I-2  Distributions  payable  for any  period  will be
computed for any full semi-annual  Distribution period on the basis of a 360-day
year and the actual number of days elapsed in the relevant  Distribution period;
provided,  however,  that  upon the  occurrence  of a Special  Event  redemption
--------   -------
pursuant  to  paragraph  4(a)  below  the  amounts  payable   pursuant  to  this
Declaration  shall be  calculated  as set  forth in the  definition  of  Special
Redemption Price.

         (b) LIBOR shall be  determined by the  Calculation  Agent in accordance
with the following provisions:

               (1) On the second LIBOR Business Day (provided,  that on such day
                                                     --------
          commercial banks are open for business  (including dealings in foreign
          currency  deposits) in London (a "LIBOR Banking  Day"),  and otherwise

<PAGE>

          the next  preceding  LIBOR  Business Day that is also a LIBOR  Banking
          Day) prior to May 1 and November 1 (except,  with respect to the first
          interest payment period,  on April 8, 2002),  (each such day, a "LIBOR
          Determination  Date"),  LIBOR shall equal the rate, as obtained by the
          Calculation Agent for six-month U.S. Dollar deposits in Europe,  which
          appears on Telerate Page 3750 (as defined in the  International  Swaps
          and  Derivatives  Association,  Inc.  1991  Interest Rate and Currency
          Exchange  Definitions) or such other page as may replace such Telerate
          Page 3750, as of 11:00 a.m. (London time) on such LIBOR  Determination
          Date, as reported by Bloomberg  Financial  Markets  Commodities  News;
          provided,  however,  that in the case of the  first  interest  payment
          --------   -------
          period,  LIBOR  will be  interpolated  from LIBOR for  six-month  U.S.
          Dollar  deposits  in Europe  and LIBOR for  seven  month  U.S.  Dollar
          deposits in Europe on a  straight-line  basis.  "LIBOR  Business  Day"
          means  any day that is not a  Saturday,  Sunday  or other day on which
          commercial  banking  institutions in New York, New York or Wilmington,
          Delaware are  authorized or obligated by law or executive  order to be
          closed.  If  such  rate  is  superseded  on  Telerate  Page  3750 by a
          corrected  rate  before  12:00  noon  (London  time) on the same LIBOR
          Determination  Date, the corrected rate as so substituted  will be the
          applicable LIBOR for that LIBOR Determination Date.

               (2) If,  on any  LIBOR  Determination  Date,  such  rate does not
          appear  on  Telerate  Page 3750 as  reported  by  Bloomberg  Financial
          Markets  Commodities  News or such  other  page  as may  replace  such
          Telerate  Page  3750,  the  Calculation   Agent  shall  determine  the
          arithmetic  mean of the offered  quotations of the Reference Banks (as
          defined  below) to leading  banks in the London  Interbank  market for
          six-month U.S. Dollar  deposits in Europe (in an amount  determined by
          the  Calculation  Agent) by reference to requests for quotations as of
          approximately 11:00 a.m. (London time) on the LIBOR Determination Date
          made by the Calculation Agent to the Reference Banks. If, on any LIBOR
          Determination  Date, at least two of the Reference  Banks provide such
          quotations,  LIBOR shall equal the arithmetic mean of such quotations.
          If, on any LIBOR Determination Date, only one or none of the Reference
          Banks  provide  such a  quotation,  LIBOR  shall be  deemed  to be the
          arithmetic  mean of the offered  quotations  that at least two leading
          banks in the City of New York (as selected by the  Calculation  Agent)
          A-I-3  are  quoting  on the  relevant  LIBOR  Determination  Date  for
          six-month U.S. Dollar deposits in Europe at  approximately  11:00 a.m.
          (London time) (in an amount  determined by the Calculation  Agent). As
          used  herein,  "Reference  Banks" means four major banks in the London
          interbank market selected by the Calculation Agent.

               (3) If the  Calculation  Agent  is  required  but  is  unable  to
          determine  a rate in  accordance  with at least one of the  procedures
          provided  above,  LIBOR shall be LIBOR in effect on the previous LIBOR
          Determination  Date  (whether or not LIBOR for such period was in fact
          determined on such LIBOR Determination Date).

         (c) All percentages  resulting from any  calculations on the Securities
will be  rounded,  if  necessary,  to the nearest  one  hundred-thousandth  of a
percentage point, with five  one-millionths of a percentage point rounded upward
(e.g.,  9.876545% (or .09876545)  being rounded to 9.87655% (or .0987655)),  and
all dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward).

         (d) On each LIBOR  Determination  Date,  the  Calculation  Agent  shall
notify,  in writing,  the Sponsor and the Paying Agent of the applicable  Coupon
Rate in effect for the related  Distribution  payment  period.  The  Calculation
Agent  shall,  upon the  request of the Holder of any  Securities,  provide  the
Coupon Rate then in effect.  All calculations  made by the Calculation  Agent in
the absence of manifest  error shall be conclusive  for all purposes and binding
on the  Sponsor  and the Holders of the  Securities.  The Paying  Agent shall be
entitled  to rely on  information  received  from the  Calculation  Agent or the
Sponsor as to the Coupon Rate. The Sponsor shall, from time to time, provide any
necessary  information  to the  Paying  Agent  relating  to any  original  issue
discount  and  interest  on the  Securities  that is included in any payment and
reportable for taxable income calculation purposes.

         (e)  Distributions  on the Securities  will be cumulative,  will accrue
from the date of original issuance, and will be payable, subject to extension of

<PAGE>

Distribution  payment periods as described  herein,  semi-annually in arrears on
April 22 and October 22 of each year,  commencing  on October 22, 2002 (each,  a
"Distribution  Payment  Date").  The  Debenture  Issuer has the right  under the
Indenture  to defer  payments of interest on the  Debentures  by  extending  the
interest payment period for up to 10 consecutive  semi-annual  periods (each, an
"Extension Period") at any time and from time to time on the Debentures, subject
to the conditions  described  below,  during which Extension  Period no interest
shall be due and payable  (except any  Additional  Interest  that may be due and
payable).  During any Extension Period,  interest will continue to accrue on the
Debentures,  and interest on such accrued  interest  (such accrued  interest and
interest  thereon  referred to herein as "Deferred  Interest") will accrue at an
annual rate equal to the Coupon Rate in effect for each such  Extension  Period,
compounded  semi-annually  from the date such Deferred  Interest would have been
payable were it not for the Extension Period, to the extent permitted by law. No
Extension  Period may end on a date other than a  Distribution  Payment Date. At
the end of any  such  Extension  Period,  the  Debenture  Issuer  shall  pay all
Deferred Interest then accrued and unpaid on the Debentures;  provided, however,
                                                              --------  -------
that no  Extension  Period may extend  beyond the  Maturity  Date and  provided,
                                                                       --------
further,  that, during any A-I-4 such Extension Period, the Debenture Issuer may
-------
not (i) declare or pay any dividends or distributions  on, or redeem,  purchase,
acquire,  or make a  liquidation  payment with respect to, any of the  Debenture
Issuer's  capital  stock or (ii) make any payment of principal of or interest or
premium,  if any, on or repay,  repurchase or redeem any debt  securities of the
Debenture Issuer that rank pari passu in all respects with or junior in interest
to the Debentures (other than (a) repurchases, redemptions or other acquisitions
of shares of capital  stock of the Debenture  Issuer (A) in connection  with any
employment  contract,  benefit plan or other similar arrangement with or for the
benefit of one or more employees,  officers,  directors or  consultants,  (B) in
connection with a dividend  reinvestment  or stockholder  stock purchase plan or
(C) in connection with the issuance of capital stock of the Debenture Issuer (or
securities   convertible  into  or  exercisable  for  such  capital  stock),  as
consideration in an acquisition transaction entered into prior to the applicable
Extension Period,  (b) as a result of any exchange or conversion of any class or
series  of the  Debenture  Issuer's  capital  stock (or any  capital  stock of a
subsidiary  of the  Debenture  Issuer) for any class or series of the  Debenture
Issuer's  capital  stock or of any  class or series  of the  Debenture  Issuer's
indebtedness  for any class or series of the Debenture  Issuer's  capital stock,
(c) the purchase of  fractional  interests in shares of the  Debenture  Issuer's
capital stock pursuant to the conversion or exchange  provisions of such capital
stock or the security  being  converted or exchanged,  (d) any  declaration of a
dividend in connection  with any  stockholder's  rights plan, or the issuance of
rights,  stock or other  property  under any  stockholder's  rights plan, or the
redemption or repurchase of rights pursuant thereto,  or (e) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock  issuable upon exercise of such  warrants,  options or other rights is the
same stock as that on which the  dividend is being paid or ranks pari passu with
or junior to such stock).  Prior to the termination of any Extension Period, the
Debenture  Issuer may further  extend such  period,  provided,  that such period
                                                     --------
together with all such previous and further consecutive extensions thereof shall
not exceed 10  consecutive  semi-annual  periods,  or extend beyond the Maturity
Date. Upon the  termination of any Extension  Period and upon the payment of all
Deferred  Interest,  the Debenture  Issuer may commence a new Extension  Period,
subject to the foregoing requirements. No interest or Deferred Interest shall be
due and payable during an Extension Period,  except at the end thereof, but each
installment  of interest that would  otherwise  have been due and payable during
such  Extension  Period  shall bear  Deferred  Interest.  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
Securities  as they  appear on the books and  records of the Trust on the record
date  immediately  preceding such date.  Distributions on the Securities must be
paid on the dates payable  (after giving effect to any Extension  Period) to the
extent that the Trust has funds available for the payment of such  distributions
in  the  Property  Account  of  the  Trust.  The  Trust's  funds  available  for
Distribution  to the  Holders of the  Securities  will be  limited  to  payments
received from the Debenture  Issuer.  The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

         (f)  Distributions  on the  Securities  will be payable to the  Holders
thereof as they appear on the books and records of the Registrar on the relevant
record dates. The relevant record dates shall be selected by the Administrators,
which dates shall be 15 days before the relevant  payment  dates.  Distributions
payable on any Securities that are not punctually paid on A-I-5 any Distribution
Payment  Date,  as a result  of the  Debenture  Issuer  having  failed to make a

<PAGE>

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 payment date.

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

         3.  Liquidation  Distribution  Upon  Dissolution.  In the  event of the
             --------------------------------------------
voluntary or involuntary liquidation,  dissolution, winding-up or termination of
the Trust (each, a "Liquidation")  other than in connection with a redemption of
the Debentures, the Holders of the Securities will be entitled to receive out of
the assets of the Trust available for distribution to Holders of the Securities,
after  satisfaction  of liabilities to creditors of the Trust (to the extent not
satisfied by the Debenture Issuer),  distributions equal to the aggregate of the
stated  liquidation  amount of $1,000  per  Security  plus  accrued  and  unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless in connection with such Liquidation, the Debentures in an
aggregate  stated  principal  amount equal to the aggregate  stated  liquidation
amount of such  Securities,  with an interest  rate equal to the 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 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, shall be
distributed on a Pro Rata basis to the Holders of the Securities in exchange for
such Securities.

         The  Sponsor,  as the Holder of all of the Common  Securities,  has the
right at any time to dissolve the Trust (including  without  limitation upon the
occurrence of a Tax Event,  an Investment  Company Event or a Capital  Treatment
Event),  subject to the receipt by the Debenture  Issuer of prior  approval from
the Board of Governors of the Federal Reserve System (the "Federal Reserve"), if
then required  under  applicable  capital  guidelines or policies of the Federal
Reserve and, after  satisfaction of liabilities to creditors of the Trust, cause
the  Debentures to be distributed to the Holders of the Securities on a Pro Rata
basis in accordance with the aggregate stated liquidation amount thereof.

         The Trust shall  dissolve on the first to occur of (i) April 22,  2037,
the expiration of the term of the Trust, (ii) 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 Guarantee, as the case may be) the filing of
a  certificate  of  dissolution  of the  Sponsor or upon the  revocation  of the
charter of A-I-6 the  Sponsor  and the  expiration  of 90 days after the date of
revocation without a reinstatement thereof, (iv) 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 described
above, (v) the entry of a decree of a judicial dissolution of the Sponsor or the
Trust, or (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.  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  Institutional  Trustee of the Trust as  expeditiously as such
Trustee  determines  to be  possible  by  distributing,  after  satisfaction  of
liabilities  to  creditors  of the Trust as provided by  applicable  law, to the
Holders of the Securities,  the Debentures on a Pro Rata basis to the extent not
satisfied by the Debenture Issuer, unless such distribution is determined by the
Institutional  Trustee not to be practical,  in which event such Holders will be

<PAGE>

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

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

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

         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) any certificates  representing the Capital Securities 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  (and until such  certificates  are so
surrendered,  no payments of interest or  principal  shall be made to Holders of
Securities in respect of any payments due and payable under the  Debentures) and
(iii) all rights of Holders of  Securities  under the Capital  Securities or the
Common Securities, as applicable,  shall cease, except the right of such Holders
to  receive   Debentures  upon  surrender  of  certificates   representing  such
Securities.

         4.   Redemption and Distribution.
              ---------------------------

         (a) The Debentures will mature on April 22, 2032. The Debentures may be
redeemed  by the  Debenture  Issuer,  in whole or in  part,  on any  April 22 or
October 22 on or after April 22, 2007, at the  Redemption  Price,  upon not less
than 30 nor  more  than 60  days'  notice  to  Holders  of such  Debentures.  In
addition,  upon the occurrence and  continuation  of a Tax Event,  an Investment
Company Event or a Capital  Treatment  Event,  the Debentures may be redeemed by
the  Debenture  Issuer  in whole  but not in part,  at any time  within  90 days
following the occurrence of such Tax Event,  Investment Company Event or Capital
Treatment  Event,  as the case may be (the "Special  Redemption  Date"),  at the
Special Redemption Price, upon not less than 30 nor more than 60 days' notice to
Holders of the Debentures so long as such Tax Event, Investment Company Event or
Capital  Treatment  Event, as the case may be, is continuing.  In each case, the
right of the  Debenture  Issuer to  redeem  the  Debentures  is  subject  to the
Debenture  Issuer having  received prior approval from the Federal  Reserve,  if
then required  under  applicable  capital  guidelines or policies of the Federal
Reserve.

         "Tax Event" means the receipt by the Debenture  Issuer and the Trust of
an opinion of  counsel  experienced  in such  matters to the effect  that,  as a
result  of any  amendment  to or change  (including  any  announced  prospective
change) in the laws or any  regulations  thereunder  of the United States or any
political  subdivision or taxing authority thereof or therein, or as a result of
any official administrative  pronouncement (including any private letter ruling,
technical advice memorandum,  regulatory  procedure,  notice or announcement)(an
"Administrative Action") or judicial decision interpreting or applying such laws
or  regulations,  regardless of whether such  Administrative  Action or judicial
decision is issued to or in connection with a proceeding involving the Debenture
Issuer  or the Trust and  whether  or not  subject  to review or  appeal,  which
amendment, clarification,  change, Administrative Action or decision is enacted,
promulgated or announced, in each case on or after the date of original issuance
of the Debentures,  there is more than an insubstantial risk that: (i) the Trust
is,  or will be within 90 days of the date of such  opinion,  subject  to United

<PAGE>

States  federal  income tax with  respect to income  received  or accrued on the
Debentures;  (ii) interest  payable by the Debenture Issuer on the Debentures is
not, or within 90 days of the date of such opinion,  will not be,  deductible by
the Debenture  Issuer, in whole or in part, for United States federal income tax
purposes;  or (iii)  the Trust is, or will be within 90 days of the date of such
opinion,  subject to more than a de  minimis  amount of other  taxes  (including
withholding taxes), duties, assessments or other governmental charges.

         "Investment  Company  Event" means the receipt by the Debenture  Issuer
and the Trust of an opinion of counsel experienced in such matters to the effect
that,  as a  result  of a change  in law or  regulation  or  written  change  in
interpretation  or  application  of law or regulation by any  legislative  body,
court,  governmental  agency  or  regulatory  authority,  there is more  than an
insubstantial  risk  that the  Trust is or,  within  90 days of the date of such
opinion  will be,  considered  an  "investment  company"  that is required to be
registered under the Investment  Company Act, which change or prospective change
becomes effective or would become effective, as the case may be, on or after the
date of the original issuance of the Debentures.

         "Capital Treatment Event" means the receipt by the Debenture Issuer and
the Trust of an  opinion of counsel  experienced  in such  matters to the effect
that,  as a result  of any  amendment  to,  or change  in,  the  laws,  rules or
regulations  of the  United  States  or any  political  subdivision  thereof  or
therein,  or as the result of any official or  administrative  pronouncement  or
action or decision  interpreting  or applying such laws,  rules or  regulations,
which  amendment  or  change  is  effective  or which  pronouncement,  action or
decision  is  announced  on or  after  the  date  of  original  issuance  of the
Debentures,  there is more than an insubstantial  risk that the Debenture Issuer
will not,  within 90 days of the date of such  opinion,  be entitled to treat an
amount equal to the aggregate  Liquidation  Amount of the Capital  Securities as
"Tier 1 Capital"  (or the then  equivalent  thereof) for purposes of the capital
adequacy  guidelines  of  the  Federal  Reserve  (or  any  successor  regulatory
authority with jurisdiction over bank holding companies),  as then in effect and
applicable to the Debenture Issuer; provided,  however, that the distribution of
                                    --------   -------
the Debentures in connection  with the Liquidation of the Trust by the Debenture
Issuer shall not in and of itself  constitute a Capital  Treatment  Event unless
such  Liquidation  shall  have  occurred  in  connection  with a Tax Event or an
Investment Company Event.

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

         "Redemption Price" means 100% of the principal amount of the Debentures
being  redeemed  plus  accrued  and unpaid  interest on such  Debentures  to the
Redemption  Date or,  in the case of a  redemption  due to the  occurrence  of a
Special Event, to the Special Redemption Date if such Special Redemption Date is
on or after April 22, 2007.

         "Special  Redemption Price" means (1) if the Special Redemption Date is
before April 22, 2007,  the greater of (a) 100% of the  principal  amount of the
Debentures  being redeemed  pursuant to Section 10.02 of the Indenture or (b) as
determined by a Quotation  Agent, the sum of the present values of the principal
amount payable as part of the  Redemption  Price with respect to a redemption as
of April  22,  2007,  together  with the  present  value  of  interest  payments
calculated  at a fixed  per  annum  rate of  interest  equal to  9.95%  over the
Remaining Life of such Debentures,  discounted to the Special Redemption Date on
a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 0.50%, plus, in the case of either (a) or (b), accrued
and unpaid interest on such Debentures to the Special Redemption Date and (2) if
the Special  Redemption Date is on or after April 22, 2007, the Redemption Price
for such Special Redemption Date.

         "Comparable   Treasury   Issue"  means  with  respect  to  any  Special
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  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
April 22,  2007,  the two most  closely  corresponding  United  States  Treasury

<PAGE>

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.

         "Comparable  Treasury  Price"  means (a) the average of five  Reference
Treasury Dealer Quotations for such Special Redemption Date, after excluding the
highest and lowest such  Reference  Treasury  Dealer  Quotations,  or (b) if the
Quotation  Agent  obtains  fewer  than  five  such  Reference   Treasury  Dealer
Quotations, the average of all such Quotations.

         "Primary  Treasury  Dealer" means a primary  United  States  Government
securities dealer in New York City.

         "Quotation  Agent" means Salomon Smith Barney Inc. and its  successors;
provided,  however,  that if the foregoing shall cease to be a Primary  Treasury
--------   -------
Dealer, the Debenture Issuer shall substitute  therefor another Primary Treasury
Dealer.

         "Redemption  Date" means the date fixed for the  redemption  of Capital
Securities,  which  shall be any April 22 or  October  22 on or after  April 22,
2007.

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

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

         "Remaining Life" means,  with respect to any Debentures the period from
the Special Redemption Date for such Debentures to April 22, 2007.

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

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

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

         (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 semi-annual  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 the
          Debentures in exchange for, the Securities (a "Redemption/Distribution
          Notice")  will be  given  by the  Trust  by mail  to  each  Holder  of
          Securities to be redeemed or exchanged not fewer than 30 nor more than
          60 days  before  the date fixed for  redemption  or  exchange  thereof
          which,  in the  case of a  redemption,  will  be the  date  fixed  for
          redemption of the  Debentures.  For purposes of the calculation of the
          date of  redemption  or  exchange  and the dates on which  notices are
          given  pursuant to this  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 addressed to
          the  Holders of such  Securities  at the  address of each such  Holder
          appearing on the books and records of the Registrar.  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.

               (iii) If the  Securities are to be redeemed and the Trust gives a
          Redemption/Distribution Notice, which notice may only be issued if the
          Debentures  are  redeemed as set out in this  Section 4 (which  notice
          will be irrevocable),  then, provided,  that the Institutional Trustee
                                       --------
          has a  sufficient  amount  of  cash in  connection  with  the  related
          redemption or maturity of the Debentures,  the  Institutional  Trustee
          will  pay  the  relevant  Redemption  Price  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  Debenture  Issuer  as  guarantor
          pursuant  to the  Guarantee,  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 the Capital  Securities issued by the Trust in part, the
          Trust shall not be required to (i) issue,  register the transfer of or
          exchange  any  Security  during a period  beginning  at the opening of
          business 15 days before any  selection  for  redemption of the Capital
          Securities and ending at the close of business on the earliest date on
          which the relevant  notice of  redemption is deemed to have been given
          to all  Holders of the  Capital  Securities  to be so redeemed or (ii)
          register  the  transfer  of or  exchange  any  Capital  Securities  so
          selected  for  redemption,  in  whole  or  in  part,  except  for  the
          unredeemed portion of any Capital Securities being redeemed in part.

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

               (v)  Subject to the  foregoing  and  applicable  law  (including,
          without  limitation,  United  States  federal  securities  laws),  and
          provided, that the acquiror is not the Holder of the Common Securities
          --------
          or  the  obligor  under  the  Indenture,  the  Sponsor  or  any of its
          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 not less
than 10% in liquidation amount of the Capital Securities.

         (b)  Subject to the  requirements  of  obtaining  a tax  opinion by the
Institutional Trustee in certain circumstances set forth in the last sentence of
this paragraph,  the Holders of a Majority in liquidation  amount of the Capital
Securities,  voting  separately  as a class,  have the right to direct the time,
method,  and place of conducting any proceeding for any remedy  available to the
Institutional  Trustee,  or  exercising  any trust or power  conferred  upon the
Institutional  Trustee under the Declaration,  including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) exercise the remedies
available  under the Indenture as the holder of the  Debentures,  (ii) waive any
past default that is waivable under the  Indenture,  (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and  payable  or (iv)  consent on behalf of all the  Holders of the  Capital
Securities to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required;  provided, however, that, where
                                                  --------  -------
a consent or action under the Indenture  would require the consent or act of the
holders of greater than a simple  majority in principal  amount of Debentures (a
"Super Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written  direction of the Holders of not less
than the proportion in liquidation amount of the Capital Securities  outstanding
which the relevant Super Majority  represents of the aggregate  principal amount
of the Debentures outstanding. If the Institutional Trustee fails to enforce its
rights  under the  Debentures  after the  Holders of a Majority  in  liquidation
amount of such Capital Securities have so directed the Institutional Trustee, to
the fullest  extent  permitted  by law, a Holder of the Capital  Securities  may
institute a legal  proceeding  directly  against the Debenture Issuer to enforce
the   Institutional   Trustee's  rights  under  the  Debentures   without  first
instituting any legal proceeding against the Institutional  Trustee or any other
person or entity.  Notwithstanding  the  foregoing,  if an Event of Default  has
occurred and is continuing and such event is  attributable to the failure of the
Debenture  Issuer to pay interest or principal on the Debentures on the date the
interest or principal is payable (or in the case of  redemption,  the redemption
date), then a Holder of record of the Capital  Securities may directly institute
a proceeding for  enforcement  of payment,  on or after the respective due dates
specified  in the  Debentures,  to such Holder  directly of the  principal of or
interest on the  Debentures  having an aggregate  principal  amount equal to the
aggregate  liquidation  amount of the Capital  Securities  of such  Holder.  The
Institutional  Trustee shall notify all Holders of the Capital Securities of any
default  actually  known  to  the  Institutional  Trustee  with  respect  to the
Debentures  unless (x) such  default  has been cured prior to the giving of such
notice  or (y) the  Institutional  Trustee  determines  in good  faith  that the
withholding  of such notice is in the  interest  of the Holders of such  Capital
Securities,  except where the default  relates to the payment of principal of or
interest on any of the  Debentures.  Such notice shall state that such Indenture
Event of Default also  constitutes  an Event of Default  hereunder.  Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy, the Institutional Trustee shall not take any of the actions described in
clause (i), (ii) or (iii) above unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that, as a result of such action, the Trust
will not be classified  as other than a grantor trust for United States  federal
income tax purposes.

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

<PAGE>

amendment,  modification or termination as directed by a Majority in liquidation
amount of the Securities voting together as a single class;  provided,  however,
                                                             --------   -------
that where a consent  under the  Indenture  would require the consent of a Super
Majority,  the  Institutional  Trustee may only give such consent at the written
direction of the Holders of not less than the proportion in  liquidation  amount
of such 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 written directions
of the Holders of the Securities unless the  Institutional  Trustee has obtained
an opinion of tax counsel to the effect that,  as a result of such  action,  the
Trust will not be  classified  as other than a grantor  trust for United  States
federal income tax purposes.

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

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

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

         6.   Voting Rights - Common Securities.
             ---------------------------------

         (a) Except as provided under 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 IV of the Declaration, to vote to appoint, remove or replace any
Administrators.

         (c) Subject to Section 6.7 of the Declaration and only after each Event
of Default  (if any) with  respect to the  Capital  Securities  has been  cured,
waived or otherwise  eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common  Securities,  voting  separately as a class,  may direct the time,
method,  and place of conducting any proceeding for any remedy  available to the
Institutional  Trustee,  or  exercising  any trust or power  conferred  upon the
Institutional  Trustee under the Declaration,  including (i) directing the time,
method,  place of  conducting  any  proceeding  for any remedy  available to the
Debenture  Trustee,  or exercising any trust or power conferred on the Debenture
Trustee  with respect to the  Debentures,  (ii) waiving any past default and its
consequences  that are waivable  under the  Indenture,  or (iii)  exercising 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

<PAGE>

may only give such  consent or take such action at the written  direction of the
Holders  of not less than 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 clause  (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,  to the
fullest  extent  permitted  by law  any  Holder  of the  Common  Securities  may
institute  a legal  proceeding  directly  against  any  Person  to  enforce  the
Institutional Trustee's rights under the Declaration,  without first instituting
a legal proceeding against the Institutional Trustee or any other Person.

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

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

         7.    Amendments to Declaration and Indenture.
               ---------------------------------------

         (a)  In  addition  to  any  requirements  under  Section  11.1  of  the
Declaration,  if any proposed amendment to the Declaration  provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers,  preferences or special rights of the Securities,  whether by way of
amendment to the Declaration or otherwise, or (ii) the Liquidation of the Trust,
other than as described in Section 7.1 of the  Declaration,  then the Holders of
outstanding  Securities,  voting together as a single class, will be entitled to
vote on such  amendment or proposal and such  amendment or proposal shall not be
effective except with the approval of the Holders of not less than a Majority in
liquidation amount of the Securities affected thereby; provided, however, if any
                                                       --------  -------
amendment  or proposal  referred to in clause (i) above would  adversely  affect
only  the  Capital  Securities  or only the  Common  Securities,  then  only the
affected  class will be entitled to vote on such  amendment or proposal and such
amendment  or proposal  shall not be  effective  except  with the  approval of a
Majority in liquidation amount of such class of Securities.

         (b) In the event the consent of the Institutional Trustee as the holder
of the Debentures is required under the Indenture with respect to any amendment,
modification   or   termination  of  the  Indenture  or  the   Debentures,   the
Institutional  Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification, or termination as directed by
a Majority in liquidation  amount of the 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
written  direction of the Holders of not less than the proportion in liquidation
amount of the Securities  which the relevant  Super  Majority  represents of the
aggregate principal amount of the Debentures outstanding.

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

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

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

         9. Ranking.  The Capital  Securities  rank pari passu with, and payment
            -------
thereon shall be made Pro Rata with, the Common Securities except that, where an
Event of Default has  occurred and is  continuing,  the rights of Holders of the
Common  Securities  to  receive  payment  of  Distributions  and  payments  upon
liquidation,  redemption  and  otherwise are  subordinated  to the rights of the
Holders  of the  Capital  Securities  with the  result  that no  payment  of any
Distribution  on, or  Redemption  Price 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 the payment in full in cash of all  Distributions on, or the
Redemption Price of, the Capital Securities then due and payable.

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

         11. No Preemptive  Rights. The Holders of the Securities shall have no,
             -- ------------------
and the  issuance of the  Securities  is not subject to,  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  Guarantee,  and the
Indenture to a Holder  without  charge on written  request to the Sponsor at its
principal place of business.


<PAGE>



                                   EXHIBIT A-1

                      FORM OF CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS OR ANY OTHER
APPLICABLE   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 ONLY
(A) TO THE  DEBENTURE  ISSUER OR THE TRUST,  (B) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"),  TO A PERSON THE HOLDER  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,  (C) PURSUANT
TO AN EXEMPTION FROM REGISTRATION TO AN "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 AN
"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 (D)  PURSUANT  TO  ANOTHER  AVAILABLE  EXEMPTION  FROM  THE
REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT,  SUBJECT  TO THE  DEBENTURE
ISSUER'S  AND THE  TRUST'S  RIGHT  PRIOR TO ANY  SUCH  OFFER,  SALE OR  TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION  AND/OR  OTHER  INFORMATION   SATISFACTORY  TO  EACH  OF  THEM  IN
ACCORDANCE  WITH THE AMENDED AND RESTATED  DECLARATION OF TRUST, A COPY OF WHICH
MAY BE  OBTAINED  FROM THE  DEBENTURE  ISSUER OR THE  TRUST.  THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE  HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

         THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS
AND  WARRANTS  THAT IT WILL NOT ENGAGE IN HEDGING  TRANSACTIONS  INVOLVING  THIS
SECURITY UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

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

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

         THIS  SECURITY  WILL BE ISSUED  AND MAY BE  TRANSFERRED  ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN
EXCESS  THEREOF.  ANY  ATTEMPTED  TRANSFER OF THIS  SECURITY IN A BLOCK HAVING A
LIQUIDATION  AMOUNT OF LESS THAN  $100,000  SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE
THE HOLDER OF THIS SECURITY FOR ANY PURPOSE,  INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS SECURITY,  AND SUCH PURPORTED  TRANSFEREE SHALL
BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.


<PAGE>



       Certificate Number [_____]       Number of Capital Securities [_____]

                             CUSIP NO [___________]

                    Certificate Evidencing Capital Securities

                                       of

                            FIRST BANK CAPITAL TRUST

                             Floating Rate TRUPS(R)

                (liquidation amount $1,000 per Capital Security)

         First Bank Capital Trust, 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  25,000  capital
securities  of the Trust  representing  undivided  beneficial  interests  in the
assets of the Trust,  designated the Floating Rate TRUPS(R)  (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
Capital   Securities   represented  hereby  are  issued  pursuant  to,  and  the
designation, rights, privileges,  restrictions,  preferences and other terms and
provisions  of the Capital  Securities  shall in all respects be subject to, the
provisions of the Amended and Restated  Declaration of Trust of the Trust, dated
as of  April  10,  2002,  among  Allen  H.  Blake  and  Lisa  K.  Vansickle,  as
Administrators,  Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company,  as  Institutional  Trustee,  First Banks,  Inc.,  as Sponsor,  and the
holders from time to time of undivided beneficial interests in the assets of the
Trust,  including the designation of the terms of the Capital  Securities as set
forth in Annex I to 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  Guarantee  to the extent  provided  therein.  The Sponsor  will
provide a copy of the  Declaration,  the  Guarantee,  and the  Indenture  to the
Holder without charge upon written request to the Sponsor at its principal place
of business.

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

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

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



<PAGE>



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

                            FIRST BANK CAPITAL TRUST


                            By:______________________________
                                Name:
                                Title: Administrator

                            Dated:___________________________


                          CERTIFICATE OF AUTHENTICATION

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

                            WILMINGTON TRUST COMPANY,
                            not in its individual capacity but solely as
                            the Institutional Trustee



                            By:______________________________
                                         Authorized Officer

                            Dated:___________________________


<PAGE>



                          [FORM OF REVERSE OF SECURITY]

         Distributions  payable on each  Capital  Security  will be payable at a
variable per annum rate of  interest,  reset  semi-annually,  equal to LIBOR (as
defined  in the  Declaration)  plus  3.875%  (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
(provided,  that the  applicable  Coupon Rate may not exceed 11.00%  through the
 --------
Distribution  Payment Date in April 2007).  Except as set forth below in respect
of an Extension  Period,  Distributions in arrears for more than one semi-annual
period will bear interest  thereon  compounded  semi-annually  at the applicable
Coupon  Rate for each  such  semi-annual  period  (to the  extent  permitted  by
applicable  law).  The  term   "Distributions"  as  used  herein  includes  cash
distributions,  any such compounded  distributions  and any Additional  Interest
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 in the Property Account therefor.  The amount of Distributions payable
for any period will be computed for any full semi-annual  Distribution period on
the  basis of a  360-day  year and the  actual  number  of days  elapsed  in the
relevant Distribution period.

         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  semi-annually in arrears on April 22 and October 22 of each
year,  commencing on October 22, 2002 (each, a "Distribution Payment Date"). The
Debenture Issuer has the right under the Indenture to defer payments of interest
on  the  Debentures  by  extending  the  interest  payment  period  for up to 10
consecutive  semi-annual  periods (each, an "Extension  Period") at any time and
from time to time on the Debentures,  subject to the conditions described below,
during which  Extension  Period no interest shall be due and payable (except any
Additional  Interest that may be due and payable).  During any Extension Period,
interest will continue to accrue on the Debentures, and interest on such accrued
interest  (such  accrued  interest  and interest  thereon  referred to herein as
"Deferred  Interest")  will accrue at an annual rate equal to the Coupon Rate in
effect for each such Extension Period,  compounded  semi-annually  from the date
such  Deferred  Interest  would have been payable were it not for the  Extension
Period,  to the extent  permitted by law. No Extension  Period may end on a date
other than a Distribution Payment Date. At the end of any such Extension Period,
the Debenture Issuer shall pay all Deferred  Interest then accrued and unpaid on
the Debentures;  provided,  however,  that no Extension Period may extend beyond
                 --------   -------
the  Maturity  Date.  Prior to the  termination  of any  Extension  Period,  the
Debenture  Issuer may further  extend such  period,  provided,  that such period
                                                     --------
together with all such previous and further consecutive extensions thereof shall
not exceed 10  consecutive  semi-annual  periods,  or extend beyond the Maturity
Date. Upon the  termination of any Extension  Period and upon the payment of all
Deferred  Interest,  the Debenture  Issuer may commence a new Extension  Period,
subject to the foregoing requirements. No interest or Deferred Interest shall be
due and payable during an Extension Period,  except at the end thereof, but each
installment  of interest that would  otherwise  have been due and payable during
such  Extension  Period  shall bear  Deferred  Interest.  If  Distributions  are
deferred,  the  Distributions  due  shall be paid on the date  that the  related
Extension  Period  terminates to Holders of the Securities as they appear on the
books and records of the Trust on the record  date  immediately  preceding  such
date.  Distributions  on the Securities must be paid on the dates payable (after
giving  effect to any  Extension  Period) to the extent that the Trust has funds
available for the payment of such  distributions  in the Property Account of the
Trust.  The  Trust's  funds  available  for  Distribution  to the Holders of the
Securities will be limited to payments received from the Debenture  Issuer.  The
payment of  Distributions  out of moneys held by the Trust is  guaranteed by the
Guarantor pursuant to the Guarantee.

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


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


                          Date:________________________________

                          Signature:___________________________

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

                 Signature Guarantee:1_________________________






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

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


<PAGE>



                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

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

         EXCEPT AS SET FORTH IN SECTION  8.1(b) OF THE  DECLARATION  (AS DEFINED
BELOW),   THIS  SECURITY  MAY  NOT  BE  OFFERED,   SOLD,  PLEDGED  OR  OTHERWISE
TRANSFERRED.


<PAGE>



         Certificate Number [_____]      Number of Common Securities [____]

                    Certificate Evidencing Common Securities

                                       of

                            FIRST BANK CAPITAL TRUST

         First Bank Capital Trust, a statutory  business trust created under the
laws of the State of Delaware (the "Trust"),  hereby certifies that First Banks,
Inc.  (the  "Holder") is the  registered  owner of 774 common  securities of the
Trust  representing  undivided  beneficial  interests in the assets of the Trust
(liquidation amount $1,000 per Common Security)(the  "Common  Securities").  The
Common   Securities   represented   hereby  are  issued  pursuant  to,  and  the
designation, rights, privileges,  restrictions,  preferences and other terms and
provisions  of the Common  Securities  shall in all  respects be subject to, the
provisions of the Amended and Restated  Declaration of Trust of the Trust, dated
as of  April  10,  2002,  among  Allen  H.  Blake  and  Lisa  K.  Vansickle,  as
Administrators,  Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional  Trustee, the Holder, as Sponsor, and the holders from
time to time of  undivided  beneficial  interests  in the  assets of the  Trust,
including the designation of the terms of the 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 Sponsor will provide a copy of the
Declaration  and the Indenture to the Holder without charge upon written request
to the Sponsor at its principal place of business.

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

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

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

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


<PAGE>



         IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of____, 2002.

                            FIRST BANK CAPITAL TRUST


                            By:______________________________
                               Name:
                               Title: Administrator


<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
variable per annum rate of  interest,  reset  semi-annually,  equal to LIBOR (as
defined  in the  Declaration)  plus  3.875%  (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
(provided,  that the  applicable  Coupon Rate may not exceed 11.00%  through the
 --------
Distribution  Payment Date in April 2007).  Except as set forth below in respect
of an Extension  Period,  Distributions in arrears for more than one semi-annual
period will bear interest  thereon  compounded  semi-annually  at the applicable
Coupon  Rate for each  such  semi-annual  period  (to the  extent  permitted  by
applicable  law).  The  term   "Distributions"  as  used  herein  includes  cash
distributions,  any such compounded  distributions  and any Additional  Interest
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 in the Property Account therefor.  The amount of Distributions payable
for any period will be computed for any full semi-annual  Distribution period on
the  basis of a  360-day  year and the  actual  number  of days  elapsed  in the
relevant Distribution period.

         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 April 22 and October 22 of each
year,  commencing on October 22, 2002 (each, a "Distribution Payment Date"). The
Debenture Issuer has the right under the Indenture to defer payments of interest
on  the  Debentures  by  extending  the  interest  payment  period  for up to 10
consecutive  semi-annual  periods (each, an "Extension  Period") at any time and
from time to time on the Debentures,  subject to the conditions described below,
during which  Extension  Period no interest shall be due and payable (except any
Additional  Interest that may be due and payable).  During any Extension Period,
interest will continue to accrue on the Debentures, and interest on such accrued
interest  (such  accrued  interest  and interest  thereon  referred to herein as
"Deferred  Interest")  will accrue at an annual rate equal to the Coupon Rate in
effect for each such Extension Period,  compounded  semi-annually  from the date
such  Deferred  Interest  would have been payable were it not for the  Extension
Period,  to the extent  permitted by law. No Extension  Period may end on a date
other than a Distribution Payment Date. At the end of any such Extension Period,
the Debenture Issuer shall pay all Deferred  Interest then accrued and unpaid on
the Debentures;  provided,  however,  that no Extension Period may extend beyond
                 --------   -------
the  Maturity  Date.  Prior to the  termination  of any  Extension  Period,  the
Debenture  Issuer may further  extend such  period,  provided,  that such period
                                                     --------
together with all such previous and further consecutive extensions thereof shall
not exceed 10  consecutive  semi-annual  periods,  or extend beyond the Maturity
Date. Upon the  termination of any Extension  Period and upon the payment of all
Deferred  Interest,  the Debenture  Issuer may commence a new Extension  Period,
subject to the foregoing requirements. No interest or Deferred Interest shall be
due and payable during an Extension Period,  except at the end thereof, but each
installment  of interest that would  otherwise  have been due and payable during
such  Extension  Period  shall bear  Deferred  Interest.  If  Distributions  are
deferred,  the  Distributions  due  shall be paid on the date  that the  related
Extension  Period  terminates to Holders of the Securities as they appear on the
books and records of the Trust on the record  date  immediately  preceding  such
date.  Distributions  on the Securities must be paid on the dates payable (after
giving  effect to any  Extension  Period) to the extent that the Trust has funds
available for the payment of such  distributions  in the Property Account of the
Trust.  The  Trust's  funds  available  for  Distribution  to the Holders of the
Securities will be limited to payments received from the Debenture  Issuer.  The
payment of  Distributions  out of moneys held by the Trust is  guaranteed by the
Guarantor pursuant to the Guarantee.

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


<PAGE>



                                   ASSIGNMENT

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

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

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

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

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

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

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

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

(Insert address and zip code of assignee),

and  irrevocably  appoints  _________ as agent to transfer this Common  Security
Certificate on the books of the Trust.  The agent may substitute  another to act
for him or her.

                  Date:_____________________________

                  Signature:________________________

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

                  Signature Guarantee:1 _____________________________










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

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


<PAGE>



                                                                       EXHIBIT B

                         FORM OF TRANSFEREE CERTIFICATE
                  TO BE EXECUTED BY TRANSFEREES OTHER THAN QIBS

                                                               __________, [   ]
First Banks, Inc.
First Bank Capital Trust
600 James S. McDonnell Blvd., Mail Code #014
Hazelwood, MO 63042

Re:      Purchase of $1,000 stated liquidation amount of Floating Rate TRUPS(R)
         (the "Capital Securities") of First Bank Capital Trust
         ------------------------------------------------------

Ladies and Gentlemen:

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

         1.  We  understand  that  the  Floating  Rate  TRUPS(R)  (the  "Capital
Securities") of First Bank Capital Trust (the "Trust")  (including the guarantee
(the  "Guarantee") of First Banks,  Inc. (the "Company")  executed in connection
therewith) and the Floating Rate Junior Subordinated Debt Securities due 2032 of
the Company (the  "Subordinated Debt Securities") (the Capital  Securities,  the
Guarantee and the Subordinated Debt Securities together being referred to herein
as the "Offered Securities"),  have not been registered under the Securities Act
of 1933,  as  amended  (the  "Securities  Act"),  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 we decide to offer,  sell or  otherwise  transfer any such
Offered  Securities,  such offer,  sale or transfer will be made only (a) to the
Company or the Trust,  (b) 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,
(c) pursuant to an exemption  from  registration,  to an  "accredited  investor"
within the meaning of  subparagraph  (a) (1),  (2), (3) or (7) of Rule 501 under
the Securities Act that is acquiring  Offered  Securities for its own account or
for the account of such an 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 (d) pursuant to another available
exemption from the registration  requirements of the Securities Act, and in each
of the foregoing cases in accordance with any applicable  state  securities laws
and any  requirements  of law that govern the  disposition of our property.  The
foregoing restrictions on resale will not apply subsequent to the date on which,
in the written  opinion of counsel,  the Capital  Securities are not "restricted
securities"  within the  meaning of Rule 144 under the  Securities  Act.  If any
resale or other  transfer  of the  Offered  Securities  is  proposed  to be made
pursuant to clause (c) or (d) above,  the transferor shall deliver a letter from
the  transferee  substantially  in the form of this letter to the  Institutional
Trustee as  Transfer  Agent,  which  shall  provide as  applicable,  among other
things,  that the transferee is an "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 purposes 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  Securities that the Trust and
the  Company  reserve  the  right  prior to any  offer,  sale or other  transfer
pursuant to clause (c) or (d) to require the delivery of any opinion of counsel,
certifications  and/or  other  information  satisfactory  to the  Trust  and the
Company.  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 "accredited  investor"  within 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  "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

<PAGE>

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.  In the  event  that  we  purchase  any  Capital  Securities  or any
Subordinated Debt Securities,  we will acquire 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.

         5. We acknowledge  that we either (A) are not a fiduciary of a pension,
profit-sharing or other employee benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (a "Plan"), or an entity whose
assets  include "plan  assets" by reason of any Plan's  investment in the entity
and are not purchasing the Offered Securities on behalf of or with "plan assets"
by reason of any Plan's  investment  in the entity  and are not  purchasing  the
Offered  Securities  on behalf of or with  "plan  assets" of any Plan or (B) are
eligible for the exemptive  relief  available under one or more of the following
prohibited  transaction class exemptions ("PTCEs") issued by the U.S. Department
of Labor: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.

         6. We  acknowledge  that the Trust and the Company 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  deemed  to have  been made by our
purchase of the Offered  Securities  are no longer  accurate,  we shall promptly
notify the Placement  Agent.  If we are  acquiring  any Offered  Securities as a
fiduciary or agent for one or more investor accounts,  we represent that we have
sole discretion with respect to each such investor account and that we have full
power to make the foregoing  acknowledgments,  representations  and agreement on
behalf of each such investor account.


                                       __________________________________
                                       (Name of Purchaser)

                                       By:_______________________________

                                       Date:_____________________________

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


Name:___________________________________

Address:________________________________

Taxpayer ID Number:_____________________


<PAGE>



                                                                       EXHIBIT C

                         FORM OF TRANSFEROR CERTIFICATE
                             TO BE EXECUTED FOR QIBs
                                                               __________, [   ]

First Banks, Inc.
First Bank Capital Trust
600 James S. McDonnell Blvd., Mail Code #014
Hazelwood, MO 63042

Re:      Purchase of $1,000 stated liquidation amount of Floating Rate TRUPS(R)
         (the "Capital Securities") of First Bank Capital Trust
         ------------------------------------------------------

         Reference  is hereby made to the Amended and  Restated  Declaration  of
Trust  of  First  Bank  Capital   Trust,   dated  as  of  April  10,  2002  (the
"Declaration"),  among Allen H. Blake and Lisa K. Vansickle,  as Administrators,
Wilmington Trust Company,  as Delaware  Trustee,  Wilmington  Trust Company,  as
Institutional  Trustee, First Banks, Inc., as Sponsor, and the holders from time
to time of  undivided  beneficial  interests in the assets of First Bank Capital
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").

         In accordance  with Section 8.2(b) of the  Declaration,  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  Securities  Act ("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.

         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.


<PAGE>



                                            (Name of Transferor)


                                            By: _____________________________

                                                Name:________________________

                                                Title:  _____________________

                                            Date:____________________________





<PAGE>
                                                                    Exhibit 4.18

            FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITY DUE 2032

     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  OR ANY  STATE  SECURITIES  LAWS OR ANY OTHER
APPLICABLE   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 ONLY
(A) TO THE COMPANY,  (B) PURSUANT TO RULE 144A UNDER THE  SECURITIES  ACT ("RULE
144A"), TO A PERSON THE HOLDER 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,  (C)  PURSUANT TO AN  EXEMPTION
FROM REGISTRATION TO AN "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 AN  "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 (D)
PURSUANT TO ANOTHER  AVAILABLE  EXEMPTION FROM THE REGISTRATION  REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION
OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER  INFORMATION  SATISFACTORY  TO  IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE  HEREOF AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.

     THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND
WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS SECURITY
UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

     THE  HOLDER  OF  THIS  SECURITY  BY  ITS  ACCEPTANCE  HEREOF  ALSO  AGREES,
REPRESENTS  AND  WARRANTS  THAT  IT  IS  NOT  AN  EMPLOYEE  BENEFIT,  INDIVIDUAL
RETIREMENT  ACCOUNT  OR  OTHER  PLAN OR  ARRANGEMENT  SUBJECT  TO TITLE I OF THE
EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR
SECTION 4975 OF THE  INTERNAL  REVENUE  CODE OF 1986,  AS AMENDED (THE  "CODE"),
(EACH A "PLAN"),  OR AN ENTITY WHOSE UNDERLYING  ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S  INVESTMENT  IN THE ENTITY  AND NO PERSON  INVESTING  "PLAN
ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS  SECURITY OR ANY INTEREST  THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE  RELIEF  AVAILABLE
UNDER U.S.  DEPARTMENT OF LABOR  PROHIBITED  TRANSACTION  CLASS EXEMPTION 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE  EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS  SECURITY IS NOT  PROHIBITED  BY SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE WITH  RESPECT TO SUCH  PURCHASE OR HOLDING.  ANY  PURCHASER  OR

<PAGE>

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

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

     THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
PRINCIPAL  AMOUNT OF NOT LESS THAN  $100,000  AND  MULTIPLES OF $1,000 IN EXCESS
THEREOF.  ANY ATTEMPTED  TRANSFER OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL
AMOUNT OF LESS THAN  $100,00  SHALL BE DEEMED TO BE VOID AND OF NO LEGAL  EFFECT
WHATSOEVER.  ANY SUCH PURPORTED  TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF THIS SECURITY FOR ANY PURPOSE,  INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.

     THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR
ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE
CORPORATION  (THE  "FDIC").  THIS  OBLIGATION IS  SUBORDINATED  TO THE CLAIMS OF
DEPOSITORS  AND THE CLAIMS OF GENERAL AND SECURED  CREDITORS OF THE COMPANY,  IS
INELIGIBLE  AS COLLATERAL  FOR A LOAN BY THE COMPANY OR ANY OF ITS  SUBSIDIARIES
AND IS NOT SECURED.


<PAGE>



            Floating Rate Junior Subordinated Debt Security due 2032

                                       of

                                FIRST BANKS, INC.

     First Banks,  Inc., a bank holding  company  incorporated  in Missouri (the
"Company"),  for value received promises to pay to Wilmington Trust Company, not
in its individual  capacity but solely as  Institutional  Trustee for First Bank
Capital Trust, a Delaware  statutory business trust (the "Holder") or registered
assigns,  the principal  sum of Twenty Five Million  Seven Hundred  Seventy Four
Thousand  Dollars  ($25,774,000)  on April 22, 2032, and to pay interest on said
principal sum from April 10, 2002, or from the most recent interest payment date
(each such date, an "Interest  Payment Date") to which interest has been paid or
duly  provided for,  semi-annually  (subject to deferral as set forth herein) in
arrears on April 22 and October 22 of each year commencing  October 22, 2002, at
a  variable  per annum rate equal to LIBOR (as  defined in the  Indenture)  plus
3.875% (the "Interest Rate")  (provided,  that the applicable  Interest Rate may
                              ----------
not exceed  11.00%  through the  Interest  Payment Date in April 2007) until the
principal hereof shall have become due and payable, and on any overdue principal
and  (without  duplication  and to the extent that  payment of such  interest is
enforceable  under applicable law) on any overdue  installment of interest at an
annual rate equal to the Interest Rate in effect for each such Extension  Period
compounded semi-annually. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day  year and the actual  number of
days  elapsed in the  relevant  interest  period.  In the event that any date on
which the  principal  or  interest  is  payable on this Debt  Security  is not a
Business  Day,  then  payment  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. The interest  installment so payable,  and punctually paid or duly
provided for, on any Interest  Payment Date will, as provided in the  Indenture,
be  paid  to the  Person  in  whose  name  this  Debt  Security  (or one or more
Predecessor Securities, as defined in said Indenture) is registered at the close
of business on the regular  record date for such  interest  installment,  except
that  interest and any Deferred  Interest  payable on the Maturity Date shall be
paid to the Person to whom principal is paid. Any such interest  installment not
punctually  paid or duly provided for shall forthwith cease to be payable to the
registered  holders on such regular record date and may be paid to the Person in
whose name this Debt Security (or one or more  Predecessor  Debt  Securities) is
registered at the close of business on a special  record date to be fixed by the
Trustee for the payment of such  defaulted  interest,  notice  whereof  shall be
given to the  registered  holders of the Debt  Securities  not less than 10 days
prior to such special  record date, all as more fully provided in the Indenture.
The  principal  of and  interest on this Debt  Security  shall be payable at the
office or agency of the Trustee (or other paying agent appointed by the Company)
maintained  for that  purpose in any coin or  currency  of the United  States of
America  that at the time of payment is legal  tender for  payment of public and
private debts;  provided,  however,  that payment of interest may be made at the
                --------   -------
option of the Company by check mailed to the  registered  holder at such address
as shall appear in the Debt Security  Register or by wire transfer to an account
appropriately designated by the holder hereof. Notwithstanding the foregoing, so
long as the  holder of this Debt  Security  is the  Institutional  Trustee,  the
payment of the  principal of and interest on this Debt  Security will be made in
immediately  available  funds  at  such  place  and to  such  account  as may be
designated by the Trustee.

     So long as no Event of Default has occurred and is continuing,  the Company
shall have the right, from time to time and without causing an Event of Default,
to defer  payments of interest on the Debt  Securities by extending the interest
payment  period on the Debt  Securities at any time and from time to time during
the term of the Debt Securities,  for up to 10 consecutive  semi-annual  periods
(each such extended  interest  payment period,  an "Extension  Period"),  during
which  Extension  Period  no  interest  shall  be due and  payable  (except  any
Additional  Interest that may be due and payable).  During any Extension Period,
interest  will continue to accrue on the Debt  Securities,  and interest on such
accrued  interest (such accrued interest and interest thereon referred to herein
as  "Deferred   Interest")  will  accrue,  at  the  Interest  Rate,   compounded
semi-annually  from the date such Deferred Interest would have been payable were

<PAGE>

it not  for the  Extension  Period,  both to the  extent  permitted  by law.  No
Extension  Period may end on a date other than an Interest  Payment Date. At the
end of any such  Extension  Period the Company  shall pay all Deferred  Interest
then  accrued  and unpaid on the Debt  Securities;  provided,  however,  that no
                                                    ---------  --------
Extension  Period may extend  beyond the Maturity  Date and  provided,  further,
                                                             ---------  --------
however,  during any such Extension  Period,  the Company may not (i) declare or
--------
pay any dividends or distributions on, or redeem,  purchase,  acquire, or make a
liquidation  payment with respect to, any of the Company's capital stock or (ii)
make any payment of  principal  of or interest or premium,  if any, on or repay,
repurchase or redeem any debt  securities of the Company that rank pari passu in
all respects with or junior in interest to the Debt  Securities  (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company (A) in connection  with any employment  contract,  benefit plan or other
similar arrangement with or for the benefit of one or more employees,  officers,
directors or  consultants,  (B) in connection  with a dividend  reinvestment  or
stockholder  stock  purchase  plan or (C) in  connection  with the  issuance  of
capital stock of the Company (or securities  convertible into or exercisable for
such capital stock), as consideration in an acquisition transaction entered into
prior to the  applicable  Extension  Period,  (b) as a result of any exchange or
conversion of any class or series of the Company's capital stock (or any capital
stock of a subsidiary  of the Company) for any class or series of the  Company's
capital  stock or of any class or series of the Company's  indebtedness  for any
class or series of the Company's  capital stock,  (c) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange  provisions  of such capital stock or the security  being  converted or
exchanged,   (d)  any   declaration  of  a  dividend  in  connection   with  any
stockholder's  rights plan, or the issuance of rights,  stock or other  property
under any  stockholder's  rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend  stock or the stock  issuable  upon  exercise of
such  warrants,  options or other  rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).  Prior
to the termination of any Extension Period,  the Company may further extend such
period,  provided,  that such period together with all such previous and further
         --------
consecutive  extensions  thereof  shall not  exceed 10  consecutive  semi-annual
periods,  or extend  beyond  the  Maturity  Date.  Upon the  termination  of any
Extension Period and upon the payment of all Deferred Interest,  the Company may
commence a new  Extension  Period,  subject to the  foregoing  requirements.  No
interest  or Deferred  Interest  shall be due and  payable  during an  Extension
Period,  except at the end thereof,  but each installment of interest that would
otherwise  have been due and payable  during such  Extension  Period  shall bear
Deferred  Interest.  The Company must give the Trustee notice of its election to
begin such  Extension  Period at least one  Business Day prior to the earlier of
(i) the next succeeding date on which interest on the Debt Securities would have
been payable except for the election to begin such Extension  Period or (ii) the
date such  interest  is  payable,  but in any event not later  than the  related
regular record date.

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

     The Company waives demand,  presentment for payment,  notice of nonpayment,
notice of protest, and all other notices.

     This Debt Security shall not be entitled to any benefit under the Indenture
hereinafter  referred  to and shall not be valid or  become  obligatory  for any
purpose until the certificate of authentication hereon shall have been signed by
or on behalf of the Trustee.

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


<PAGE>


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

                                  FIRST BANKS, INC.


                                  By: /s/  Allen H. Blake
                                      ------------------------------------------
                                    Name:  Allen H. Blake
                                    Title: President and Chief Operating
                                           Officer
Dated: April 10, 2002


                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

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

                                  WILMINGTON   TRUST   COMPANY,  not   in   its
                                  individual capacity but solely as the Trustee


                                  By: /s/  Anita E. Dallago
                                      ------------------------------------------
                                             Authorized Officer


Dated: April 10, 2002



<PAGE>


                               REVERSE OF SECURITY
                               -------------------

     This Debt Security is one of a duly authorized series of Debt Securities of
the  Company,  all  issued  or to  be  issued  pursuant  to  an  Indenture  (the
"Indenture"),  dated as of April 10, 2002,  duly executed and delivered  between
the Company and Wilmington Trust Company,  as Trustee (the "Trustee"),  to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description  of the  rights,  limitations  of  rights,  obligations,  duties and
immunities  thereunder  of the Trustee,  the Company and the holders of the Debt
Securities  (referred  to herein as the "Debt  Securities")  of which  this Debt
Security  is a part.  The summary of the terms of this Debt  Security  contained
herein does not purport to be complete  and is  qualified  by  reference  to the
Indenture.

     Upon the occurrence and continuation of a Tax Event, an Investment  Company
Event or a Capital  Treatment  Event,  this Debt  Security  may  become  due and
payable,  in whole but not in part,  at any time,  within 90 days  following the
occurrence  of such Tax Event,  Investment  Company  Event or Capital  Treatment
Event  (the  "Special  Redemption  Date"),  as the case may be,  at the  Special
Redemption  Price.  The  Company  shall also have the right to redeem  this Debt
Security at the option of the Company,  in whole or in part,  on any April 22 or
October 22 on or after April 22, 2007 (a "Redemption  Date"),  at the Redemption
Price.

     Any redemption pursuant to the preceding paragraph will be made, subject to
the receipt by the Company of prior  approval from the Board of Governors of the
Federal Reserve System (the "Federal Reserve") if then required under applicable
capital  guidelines  or policies of the Federal  Reserve,  upon not less than 30
days' nor more than 60 days' notice.  If the Debt  Securities are only partially
redeemed by the Company, the Debt Securities will be redeemed pro rata or by lot
or by any other method utilized by the Trustee.

     "Redemption  Price"  means  100%  of  the  principal  amount  of  the  Debt
Securities  being  redeemed  plus  accrued  and  unpaid  interest  on such  Debt
Securities  to the  Redemption  Date or, in the case of a redemption  due to the
occurrence of a Special Event,  to the Special  Redemption  Date if such Special
Redemption Date is on or after April 22, 2007.

     "Special  Redemption  Price"  means (1) if the Special  Redemption  Date is
before April 22, 2007,  the greater of (a) 100% of the  principal  amount of the
Debt Securities being redeemed pursuant to Section 10.02 of the Indenture or (b)
as  determined  by a  Quotation  Agent,  the sum of the  present  values  of the
principal  amount  payable as part of the  Redemption  Price  with  respect to a
redemption  as of April 22, 2007,  together  with the present  value of interest
payments  calculated  at a fixed per annum rate of interest  equal to 9.95% over
the Remaining Life of such Debt Securities, discounted to the Special Redemption
Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 0.50%, plus, in the case of either (a) or (b),
accrued and unpaid  interest on such Debt  Securities to the Special  Redemption
Date and (2) if the Special  Redemption  Date is on or after April 22, 2007, the
Redemption Price for such Special Redemption Date.

     "Comparable  Treasury  Issue" means with respect to any Special  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  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 April 22, 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.

     "Comparable  Treasury  Price"  means  (a) the  average  of  five  Reference
Treasury Dealer Quotations for such Special Redemption Date, after excluding the
highest and lowest such  Reference  Treasury  Dealer  Quotations,  or (b) if the
Quotation  Agent  receives  fewer  than  five  such  Reference  Treasury  Dealer
Quotations, the average of all such Quotations.
<PAGE>

     "Primary   Treasury  Dealer"  means  a  primary  United  States  Government
securities dealer in New York City.

     "Quotation  Agent" means  Salomon  Smith  Barney Inc.  and its  successors;
provided,  however,  that if the foregoing shall cease to be a Primary  Treasury
Dealer, the Company 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 Trustee after  consultation  with
the Company.

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

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

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

     In case an Event of  Default,  as  defined  in the  Indenture,  shall  have
occurred and be continuing,  the principal of all of the Debt  Securities may be
declared due and payable, and upon such declaration of acceleration shall become
due and payable,  in the manner,  with the effect and subject to the  conditions
provided in the Indenture.

     The Indenture contains  provisions  permitting the Company and the Trustee,
with the  consent  of the  holders  of not less  than a  majority  in  aggregate
principal  amount  of the  Debt  Securities  at the  time  outstanding  affected
thereby, as specified in the Indenture,  to execute supplemental  indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the  provisions of the Indenture or of any  supplemental  indenture or of
modifying  in any  manner  the  rights of the  holders  of the Debt  Securities;
provided,  however,  that no such  supplemental  indenture  shall,  among  other
---------  --------
things,  without  the  consent  of  the  holders  of  each  Debt  Security  then
outstanding  and  affected  thereby  (i) extend the fixed  maturity  of the Debt
Securities,  or reduce the principal  amount thereof or any  redemption  premium
thereon,  or reduce the rate or extend the time of payment of interest  thereon,
or make the  principal  of, or any  interest or premium on, the Debt  Securities
payable in any coin or currency other than that provided in the Debt Securities,
or impair or affect the right of any holder of Debt Securities to institute suit
for the  payment  thereof,  or (ii)  reduce  the  aforesaid  percentage  of Debt
Securities,   the  holders  of  which  are  required  to  consent  to  any  such
supplemental  indenture.  The Indenture also contains provisions  permitting the
holders of a majority in aggregate  principal  amount of the Debt  Securities at
the time outstanding, on behalf of all of the holders of the Debt Securities, to
waive any past default in the  performance of any of the covenants  contained in
the Indenture,  or established pursuant to the Indenture,  and its consequences,
except a default in the  payment of the  principal  of or  premium,  if any,  or

<PAGE>

interest  on any of the Debt  Securities.  Any such  consent  or  waiver  by the
registered  holder of this Debt  Security  (unless  revoked as  provided  in the
Indenture)  shall be conclusive and binding upon such holder and upon all future
holders  and owners of this Debt  Security  and of any Debt  Security  issued in
exchange  herefor or in place  hereof  (whether by  registration  of transfer or
otherwise),  irrespective  of whether  or not any  notation  of such  consent or
waiver is made upon this Debt Security.

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

     As provided in the Indenture and subject to certain  limitations herein and
therein set forth,  this Debt Security is transferable by the registered  holder
hereof on the Debt Security Register of the Company, upon surrender of this Debt
Security for  registration of transfer at the office or agency of the Trustee in
Wilmington,  Delaware  accompanied  by a written  instrument or  instruments  of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered  holder hereof or such holder's  attorney duly authorized in writing,
and thereupon one or more new Debt  Securities of authorized  denominations  and
for the  same  aggregate  principal  amount  will be  issued  to the  designated
transferee  or  transferees.  No  service  charge  will  be made  for  any  such
registration  of  transfer,  but  the  Company  may  require  payment  of a  sum
sufficient  to cover any tax or other  governmental  charge  payable in relation
thereto.

     Prior  to due  presentment  for  registration  of  transfer  of  this  Debt
Security,  the Company, the Trustee, any Authenticating Agent, any paying agent,
any  transfer  agent  and the Debt  Security  registrar  may deem and  treat the
registered  holder hereof as the absolute owner hereof (whether or not this Debt
Security shall be overdue and notwithstanding any notice of ownership or writing
hereon) for the purpose of receiving  payment of or on account of the  principal
hereof and  interest  due hereon and for all other  purposes,  and  neither  the
Company nor the Trustee nor any  Authenticating  Agent nor any paying  agent nor
any  transfer  agent nor any Debt  Security  registrar  shall be affected by any
notice to the contrary.

     No  recourse  shall  be had  for the  payment  of the  principal  of or the
interest on this Debt Security,  or for any claim based hereon,  or otherwise in
respect  hereof,  or  based  on or in  respect  of the  Indenture,  against  any
incorporator,  stockholder,  officer or director,  past,  present or future,  as
such, of the Company or of any predecessor or successor corporation,  whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise,  all such liability being, by the acceptance
hereof  and as part of the  consideration  for the  issuance  hereof,  expressly
waived and released.

     The Debt  Securities  are issuable  only in  registered  certificated  form
without coupons. As provided in the Indenture and subject to certain limitations
herein and  therein  set forth,  Debt  Securities  are  exchangeable  for a like
aggregate  principal  amount  of  Debt  Securities  of  a  different  authorized
denomination, as requested by the holder surrendering the same.

     All terms used in this Debt  Security  that are  defined  in the  Indenture
shall have the meanings assigned to them in the Indenture.

     THE LAW OF THE STATE OF NEW YORK SHALL  GOVERN THE  INDENTURE  AND THE DEBT
SECURITIES, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.


<PAGE>
                                                                    Exhibit 4.19

                          CAPITAL SECURITY CERTIFICATE

     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "SECURITIES  ACT"),  OR ANY  STATE  SECURITIES  LAWS OR ANY OTHER
APPLICABLE   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 ONLY
(A) TO THE  DEBENTURE  ISSUER OR THE TRUST,  (B) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"),  TO A PERSON THE HOLDER  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,  (C) PURSUANT
TO AN EXEMPTION FROM REGISTRATION TO AN "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 AN
"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 (D)  PURSUANT  TO  ANOTHER  AVAILABLE  EXEMPTION  FROM  THE
REGISTRATION  REQUIREMENTS  OF THE  SECURITIES  ACT,  SUBJECT  TO THE  DEBENTURE
ISSUER'S  AND THE  TRUST'S  RIGHT  PRIOR TO ANY  SUCH  OFFER,  SALE OR  TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION  AND/OR  OTHER  INFORMATION   SATISFACTORY  TO  EACH  OF  THEM  IN
ACCORDANCE  WITH THE AMENDED AND RESTATED  DECLARATION OF TRUST, A COPY OF WHICH
MAY BE  OBTAINED  FROM THE  DEBENTURE  ISSUER OR THE  TRUST.  THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE  HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

     THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, REPRESENTS AND
WARRANTS THAT IT WILL NOT ENGAGE IN HEDGING TRANSACTIONS INVOLVING THIS SECURITY
UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE WITH THE SECURITIES ACT.

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

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

     THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
LIQUIDATION  AMOUNT OF NOT LESS THAN  $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A LIQUIDATION
AMOUNT OF LESS THAN  $100,000  SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER.  ANY SUCH PURPORTED  TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF THIS SECURITY FOR ANY PURPOSE,  INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.


<PAGE>


Certificate Number P-1                       Number of Capital Securities 25,000

                    Certificate Evidencing Capital Securities

                                       of

                            FIRST BANK CAPITAL TRUST

                             Floating Rate TRUPS(R)

                (liquidation amount $1,000 per Capital Security)

     First Bank Capital Trust, a statutory business trust created under the laws
of the State of Delaware (the  "Trust"),  hereby  certifies  that JPMorgan Chase
Bank, as Trustee for the benefit of the Noteholders of MM Community Funding III,
Ltd (the "Holder") is the registered  owner of 25,000 capital  securities of the
Trust representing  undivided  beneficial  interests in the assets of the Trust,
designated  the Floating  Rate TRUPS(R)  (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  Capital
Securities  represented  hereby are  issued  pursuant  to, and the  designation,
rights, privileges, restrictions,  preferences and other terms and provisions of
the Capital  Securities  shall in all respects be subject to, the  provisions of
the Amended and Restated  Declaration  of Trust of the Trust,  dated as of April
10,  2002,  among  Allen H.  Blake  and Lisa K.  Vansickle,  as  Administrators,
Wilmington Trust Company,  as Delaware  Trustee,  Wilmington  Trust Company,  as
Institutional  Trustee, First Banks, Inc., as Sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Trust,  including
the  designation of the terms of the Capital  Securities as set forth in Annex I
to  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 Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration,  the Guarantee,  and the Indenture to the Holder without charge
upon written request to the Sponsor at its principal place of business.

     Upon receipt of this Security,  the Holder is bound by the  Declaration and
is entitled to the benefits  thereunder.  By  acceptance of this  Security,  the
Holder agrees to treat,  for United  States  federal  income tax  purposes,  the
Debentures as indebtedness and the Capital  Securities as evidence of beneficial
ownership in the Debentures.

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


<PAGE>



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


                                      FIRST BANK CAPITAL TRUST

                                      By: /s/ Allen H. Blake
                                          --------------------------------------
                                      Name:   Allen H. Blake
                                      Title:  Administrator

                                      Dated:  April 10, 2002
                                            ------------------------------------



                          CERTIFICATE OF AUTHENTICATION

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


                                       WILMINGTON TRUST COMPANY,
                                       not in its individual capacity but solely
                                       as the Institutional Trustee



                                      By: /s/ Anita E. Dallago
                                          --------------------------------------
                                              Authorized Officer

                                      Dated:  April 10, 2002
                                           -------------------------------------


<PAGE>


                               REVERSE OF SECURITY
                               -------------------

     Distributions  payable  on  each  Capital  Security  will be  payable  at a
variable per annum rate of  interest,  reset  semi-annually,  equal to LIBOR (as
defined  in the  Declaration)  plus  3.875%  (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
(provided,  that the  applicable  Coupon Rate may not exceed 11.00%  through the
Distribution  Payment Date in April 2007).  Except as set forth below in respect
of an Extension  Period,  Distributions in arrears for more than one semi-annual
period will bear interest  thereon  compounded  semi-annually  at the applicable
Coupon  Rate for each  such  semi-annual  period  (to the  extent  permitted  by
applicable  law).  The  term   "Distributions"  as  used  herein  includes  cash
distributions,  any such compounded  distributions  and any Additional  Interest
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 in the Property Account therefor.  The amount of Distributions payable
for any period will be computed for any full semi-annual  Distribution period on
the  basis of a  360-day  year and the  actual  number  of days  elapsed  in the
relevant Distribution period.

     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  semi-annually in arrears on April 22 and October 22 of each
year,  commencing on October 22, 2002 (each, a "Distribution Payment Date"). The
Debenture Issuer has the right under the Indenture to defer payments of interest
on  the  Debentures  by  extending  the  interest  payment  period  for up to 10
consecutive  semi-annual  periods (each, an "Extension  Period") at any time and
from time to time on the Debentures,  subject to the conditions described below,
during which  Extension  Period no interest shall be due and payable (except any
Additional  Interest that may be due and payable).  During any Extension Period,
interest will continue to accrue on the Debentures, and interest on such accrued
interest  (such  accrued  interest  and interest  thereon  referred to herein as
"Deferred  Interest")  will accrue at an annual rate equal to the Coupon Rate in
effect for each such Extension Period,  compounded  semi-annually  from the date
such  Deferred  Interest  would have been payable were it not for the  Extension
Period,  to the extent  permitted by law. No Extension  Period may end on a date
other than a Distribution Payment Date. At the end of any such Extension Period,
the Debenture Issuer shall pay all Deferred  Interest then accrued and unpaid on
the Debentures;  provided,  however,  that no Extension Period may extend beyond
the  Maturity  Date.  Prior to the  termination  of any  Extension  Period,  the
Debenture  Issuer may further  extend such  period,  provided,  that such period
together with all such previous and further consecutive extensions thereof shall
not exceed 10  consecutive  semi-annual  periods,  or extend beyond the Maturity
Date. Upon the  termination of any Extension  Period and upon the payment of all
Deferred  Interest,  the Debenture  Issuer may commence a new Extension  Period,
subject to the foregoing requirements. No interest or Deferred Interest shall be
due and payable during an Extension Period,  except at the end thereof, but each
installment  of interest that would  otherwise  have been due and payable during
such  Extension  Period  shall bear  Deferred  Interest.  If  Distributions  are
deferred,  the  Distributions  due  shall be paid on the date  that the  related
Extension  Period  terminates to Holders of the Securities as they appear on the
books and records of the Trust on the record  date  immediately  preceding  such
date.  Distributions  on the Securities must be paid on the dates payable (after
giving  effect to any  Extension  Period) to the extent that the Trust has funds
available for the payment of such  distributions  in the Property Account of the
Trust.  The  Trust's  funds  available  for  Distribution  to the Holders of the
Securities will be limited to payments received from the Debenture  Issuer.  The
payment of  Distributions  out of moneys held by the Trust is  guaranteed by the
Guarantor pursuant to the Guarantee.

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


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

                  Date: _________________________________

                  Signature: ____________________________

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

                  Signature Guarantee:1










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

<PAGE>
                                                                    Exhibit 99.1

                        CERTIFICATION OF PERIODIC REPORT

         I, James F.  Dierberg,  Chairman  of the Board of  Directors  and Chief
Executive  Officer of First Banks,  Inc.  (the  Company),  certify,  pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

         (1) the Quarterly  Report on Form 10-Q of the Company for the quarterly
period ended June 30, 2002 (the Report) fully complies with the  requirements of
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2) the  information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.


Dated:  August 12, 2002               /s/ James F. Dierberg
                                      ------------------------------------------
                                          James F. Dierberg
                                          Chairman of the Board of Directors and
                                          Chief Executive Officer



<PAGE>


                                                                    Exhibit 99.2

                        CERTIFICATION OF PERIODIC REPORT

         I,  Allen H.  Blake,  President  and Chief  Financial  Officer of First
Banks,   Inc.  (the   Company),   certify,   pursuant  to  Section  906  of  the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

         (1) the Quarterly  Report on Form 10-Q of the Company for the quarterly
period ended June 30, 2002 (the Report) fully complies with the  requirements of
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2) the  information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.


Dated:  August 12, 2002               /s/ Allen H. Blake
                                      ------------------------------------------
                                          Allen H. Blake
                                          President and Chief Financial Officer