<PAGE>

                    AMENDED AND RESTATED DECLARATION OF TRUST

                                       OF

                          VINEYARD STATUTORY TRUST III

                         Dated as of September 25, 2003


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                                TABLE OF CONTENTS


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                                                                                                               Page
                                                                                                               ----
<S>                      <C>                                                                                   <C>
                                                ARTICLE I
                                      INTERPRETATION AND DEFINITIONS

Section 1.1.             Definitions..............................................................................1

                                                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.......................................................................21
Section 2.15.            Mergers.................................................................................22

                                               ARTICLE III
                                                 SPONSOR

Section 3.1.             Sponsor's Purchase of Common Securities.................................................23
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........................................................................24
Section 4.3.             Institutional Trustee; Eligibility......................................................25
Section 4.4.             Administrators..........................................................................25
Section 4.5.             Appointment, Removal and Resignation of the Trustees and the Administrators.............25
Section 4.6.             Vacancies Among Trustees................................................................27
Section 4.7.             Effect of Vacancies.....................................................................27
Section 4.8.             Meetings of the Trustees and the Administrators.........................................28
Section 4.9.             Delegation of Power.....................................................................28
</Table>


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<S>                      <C>                                                                                   <C>
Section 4.10.            Merger, Conversion, Consolidation or Succession to Business.............................28

                                                ARTICLE V
                                              DISTRIBUTIONS

Section 5.1.             Distributions...........................................................................29

                                                ARTICLE VI
                                          ISSUANCE OF SECURITIES

Section 6.1.             General Provisions Regarding Securities.................................................29
Section 6.2.             Paying Agent, Transfer Agent, Calculation Agent and Registrar...........................30
Section 6.3.             Form and Dating.........................................................................31
Section 6.4.             Mutilated, Destroyed, Lost or Stolen Certificates.......................................31
Section 6.5.             Temporary Securities....................................................................31
Section 6.6.             Cancellation............................................................................32
Section 6.7.             Rights of Holders; Waivers of Past Defaults.............................................32

                                               ARTICLE VII
                                   DISSOLUTION AND TERMINATION OF TRUST

Section 7.1.             Dissolution and Termination of Trust....................................................34

                                               ARTICLE VIII
                                          TRANSFER OF INTERESTS

Section 8.1.             General.................................................................................35
Section 8.2.             Transfer Procedures and Restrictions....................................................36
Section 8.3.             Deemed Security Holders.................................................................38

                                                ARTICLE IX
                   LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

Section 9.1.             Liability...............................................................................39
Section 9.2.             Exculpation.............................................................................39
Section 9.3.             Fiduciary Duty..........................................................................40
Section 9.4.             Indemnification.........................................................................40
Section 9.5.             Outside Businesses......................................................................43
Section 9.6.             Compensation; Fee.......................................................................44

                                                ARTICLE X
                                                ACCOUNTING

Section 10.1.            Fiscal Year.............................................................................44
Section 10.2.            Certain Accounting Matters..............................................................44
Section 10.3.            Banking.................................................................................45
Section 10.4.            Withholding.............................................................................45
</Table>


                                       ii
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<Table>
<S>                      <C>                                                                                   <C>
                                                ARTICLE XI
                                         AMENDMENTS AND MEETINGS

Section 11.1.            Amendments..............................................................................45
Section 11.2.            Meetings of the Holders of the Securities; Action by Written Consent....................47

                                               ARTICLE XII
                      REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE

Section 12.1.            Representations and Warranties of Institutional Trustee.................................49
Section 12.2.            Representations and Warranties of Delaware Trustee......................................50

                                               ARTICLE XIII
                                              MISCELLANEOUS

Section 13.1.            Notices.................................................................................50
Section 13.2.            Governing Law...........................................................................51
Section 13.3.            Submission to Jurisdiction..............................................................51
Section 13.4.            Intention of the Parties................................................................52
Section 13.5.            Headings................................................................................52
Section 13.6.            Successors and Assigns..................................................................52
Section 13.7.            Partial Enforceability..................................................................52
Section 13.8.            Counterparts............................................................................52



                                            ANNEXES AND EXHIBITS

ANNEX I               Terms of Capital Securities and Common Securities

EXHIBIT A-1           Form of Capital Security 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>


                                      iii
<PAGE>



                    AMENDED AND RESTATED DECLARATION OF TRUST

                                       OF

                          VINEYARD STATUTORY TRUST III

                               September 25, 2003

                  AMENDED AND RESTATED DECLARATION OF TRUST (as amended or
supplemented from time to time in accordance with the terms hereof, this
"Declaration"), dated and effective as of September 25, 2003, 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 and the Sponsor established
Vineyard Statutory Trust III (the "Trust"), a statutory trust under the
Statutory Trust Act (as defined herein), pursuant to a Declaration of Trust,
dated as of September 16, 2003 (the "Original Declaration"), and a Certificate
of Trust filed with the Secretary of State of the State of Delaware on September
16, 2003, for the sole purpose of issuing and selling the Securities (as defined
herein) representing undivided beneficial interests in the assets of the Trust,
investing the proceeds thereof in the Debentures (as defined herein) of the
Debenture Issuer (as defined herein) and engaging in those activities necessary,
advisable or incidental thereto;

                  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 trust under the Statutory Trust Act and
that this Declaration constitutes the governing instrument of such statutory
trust, and 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, 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:

                                    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;


<PAGE>


                  (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 and each Annex and Exhibit hereto, 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 Amounts" 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 Norman Morales, Gordon Fong and
Richard S. Hagan, solely in such Person's capacity as Administrator of the Trust
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 or 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.


                                       2
<PAGE>


                  "Business Day" means any day other than Saturday, Sunday or
any other day on which banking institutions in Wilmington, Delaware, The City of
New York or Sacramento, California are permitted or required by any applicable
law or executive order to close.

                  "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 United States 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.

                  "Corporate Trust Office" means the office of the Institutional
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 execution of this Declaration shall be Rodney Square
North, 1100 North Market Street, Wilmington, DE 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 the
Trust or the Trust's Affiliates or (b) any Holder of Securities.


                                       3
<PAGE>


                  "Debenture Issuer" means Vineyard National Bancorp., a bank
holding company incorporated in California, in its capacity as issuer of the
Debentures under the Indenture, and any permitted successor 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 2033 to be issued by the Debenture Issuer under the Indenture.

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

                  "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 applicable during such Extension Period,
compounded quarterly 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.

                  "Distribution Period" has the meaning set forth in paragraph
2(a) 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,


                                       4
<PAGE>


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 the
Closing Date, of the Sponsor (the "Guarantor") 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
Statutory Trust Act.

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

                  "Indenture" means the Indenture, dated as of the Closing Date,
between 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.

                  "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
three-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.


                                       5
<PAGE>


                  "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
amount that would be paid upon the redemption, liquidation or otherwise on the
date upon which the voting percentages are determined, plus unpaid Distributions
accrued thereon to such date) of all outstanding Securities of the relevant
class.

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

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

                  "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person or, in the case of
a natural Person, 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 Authorized Officer or Person, as the
case may be, 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 Authorized Officer or Person, as
the case may be, in rendering the Officers' Certificate;

                  (c) a statement that each Authorized Officer or Person, as the
case may be, has made such examination or investigation as, in his or her
opinion, is necessary to enable such Authorized Officer or Person, as the case
may be, 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
Authorized Officer or Person, as the case may be, such condition or covenant has
been complied with.

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

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

                  "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,


                                       6
<PAGE>


unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.

                  "Placement Agreement" means the Placement Agreement relating
to the offer and sale of Capital Securities.

                  "PORTAL" has the meaning set forth in Section 2.6(a)(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.

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

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

                  "Registrar" has the meaning set forth in Section 6.2.

                  "Relevant Trustee" has the meaning set forth in Section
4.5(a).

                  "Resale Restriction Termination Date" means, with respect to
any Capital Security, the date which is the later of (i) two years (or such
shorter period of time as permitted by Rule 144(k) under the Securities Act)
after the later of (y) the date of original issuance of such Capital Security
and (z) the last date on which the Trust or any Affiliate of the Trust was the
Holder of such Capital Security (or any predecessor thereto) and (ii) such later
date, if any, as may be required by any subsequent change in applicable law.

                  "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.


                                       7
<PAGE>


                  "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.

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

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

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

                  "Sponsor" means Vineyard National Bancorp., a bank holding
company that is incorporated in California, or any permitted successor of the
Debenture Issuer under the Indenture, in its capacity as sponsor of the Trust.

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

                  "Successor Delaware Trustee" has the meaning set forth in
Section 4.5(e).

                  "Successor Entity" has the meaning set forth in Section
2.15(b).

                  "Successor Institutional Trustee" has the meaning set forth in
Section 4.5(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.

                  "Telerate Page 3750" has the meaning set forth in paragraph
2(b)(1) 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 upon the redemption, liquidation or otherwise on the date upon
which the voting percentages are determined, plus unpaid Distributions accrued
thereon to such date) of all outstanding Securities of the relevant class.

                  "Transfer Agent" has the meaning set forth in Section 6.2.

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


                                       8
<PAGE>


                  "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 "Vineyard Statutory
Trust III," 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 8105 Irvine Center Drive, Irvine, CA 92618. 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 deemed necessary, advisable or
incidental thereto 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


                                       9
<PAGE>


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
                           subscription agreement for Debentures between the
                           Trust and the Sponsor, a subscription agreement for
                           Capital Securities between the Trust and the
                           purchaser of the Capital Securities and a
                           subscription agreement for Common Securities between
                           the Trust and the Sponsor;

                                    (C) ensuring compliance with the Securities
                           Act and applicable securities or blue sky laws of
                           states and other jurisdictions;

                                    (D) if and at such time determined solely 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


                                       10
<PAGE>


                           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 Statutory
                           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 as the Sponsor
                           or an Administrator may from time to time determine
                           is necessary, advisable or incidental to the
                           foregoing 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,
                           advisable or incidental to carry out any of the
                           purposes of the Trust;


                                       11
<PAGE>


                                    (P) to give the certificate required by
                           Section 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 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.

                  (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 that the Institutional Trustee may from time to
                  time determine is necessary, advisable or incidental for the
                  foregoing to give effect to the terms of this Declaration and
                  protect and


                                       12
<PAGE>


                  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 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 Section
                  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.

         (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;


                                       13
<PAGE>


                           (ii) the determination of the jurisdictions 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
                  jurisdictions 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.

                  (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.


                                       14
<PAGE>


                  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 4.5. 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.

                  (c) The Institutional Trustee shall:


                                       15
<PAGE>


                           (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 the
                  circumstances specified therefor under 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 premium, if any, on or principal of the Debentures on
the date such interest, premium, if any, or principal is otherwise payable (or
in the case of redemption, on the date of redemption), then a Holder of the
Capital Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on
the Debentures having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such Holder (a "Direct Action") on or after
the respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of 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:


                                       16
<PAGE>


                           (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 4.5.

                  (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.

                  (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 or bad faith. 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 or
bad faith. 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


                                       17
<PAGE>


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 or bad faith
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;

                           (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 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


                                       18
<PAGE>


                  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,
willful misconduct or bad faith;

                  (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;

                  (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


                                       19
<PAGE>


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;


                                       20
<PAGE>


                  (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 that the
Institutional Trustee shall be deemed to have knowledge of any 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 Amounts if the
Institutional Trustee does not have actual knowledge or written notice that such
payment is due and payable);

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

                  (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, and 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, and the Delaware Trustee shall not have
any of the duties and responsibilities of any of the Trustees or the
Administrators specified in this Declaration (except as may be required under
the Statutory 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 Section 3807 of the Statutory Trust Act.

                  Section 2.12. Execution of Documents. Unless otherwise
determined in writing by the Institutional Trustee, and except as otherwise
required by the Statutory 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 Trust Property 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 five
(5) years after the Maturity Date.


                                       21
<PAGE>


                  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 this 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;

                           (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
                  rating on the Capital Securities or any Successor Securities
                  to be downgraded or withdrawn 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 or any Successor Securities in any material
                  respect (other than with respect to any dilution of such
                  Holders' interests in the Successor Entity);

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


                                       22
<PAGE>


                           (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 or any Successor Securities in any
                           material respect (other than with respect to any
                           dilution of such 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
                           under the Investment Company Act; 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 the
                  Successor Entity under the Successor Securities to the same
                  extent provided by the Indenture, 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.

                  (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.


                                       23
<PAGE>


                  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 and sole decision to engage in, or direct the
Administrators to engage in, the following activities:

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

                  (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 Statutory
Trust Act, one Trustee (the "Delaware Trustee") shall be:

                  (a) a natural person who is a resident of the State of
Delaware and a U.S. Person at least 21 years of age; or

                  (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 Section 3807 of
the Statutory Trust Act.


                                       24
<PAGE>


                  The initial Delaware Trustee shall be Wilmington Trust
Company.

                  Section 4.3. Institutional Trustee; Eligibility.

                  (a) There shall at all times be one Trustee that 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 or national
                  association 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 or
                  national association 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 or national association 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 4.5.

                  (c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 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. 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 4.5. 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


                                       25
<PAGE>


acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section.

                  (b) Subject to Section 4.5(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
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 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.

                  (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.
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. 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 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


                                       26
<PAGE>


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 (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
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 4.6. 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 4.5.

                  Section 4.7. 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


                                       27
<PAGE>


appointment of a Trustee in accordance with Section 4.5, 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 4.8. 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 4.9. 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.

                  (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 4.10. 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


                                       28
<PAGE>


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 4.5(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 Amounts or Deferred Interest) or premium, if
any, on and/or principal of 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. For the avoidance of doubt, funds in the Property
Account shall not be distributed to Holders to the extent of any taxes payable
by the Trust, in the case of withholding taxes, as determined by the
Institutional Trustee or any Paying Agent and, in the case of taxes other than
withholding taxes, as determined by the Administrators in a written notice to
the Institutional Trustee.

                                   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


                                       29
<PAGE>


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 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 (i) an
office or agency where the Securities may be presented for payment (the "Paying
Agent") and (ii) 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.


                                       30
<PAGE>


                  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 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 an
aggregate liquidation amount of not less than $100,000.

                  (b) The Capital Securities are being offered and sold by the
Trust initially 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, 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


                                       31
<PAGE>


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.

                  (c) At any time after the acceleration of maturity of 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 acceleration and waive such default, the Holders of 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 acceleration 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;


                                       32
<PAGE>


                                    (C) all payments on any Debentures that have
                           become due otherwise than by such 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 or
                  premium, if any, on 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 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
arising from the non-payment of principal of or premium, if any, or interest on
the Debentures (unless such Default or Event of Default has been cured and a sum
sufficient to pay all matured installments of interest, premium 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.

                  (f) Except as otherwise provided in this Section, the Holders
of 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


                                       33
<PAGE>


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 October 8, 2038, 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 are then subject to
                  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 Statutory 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.


                                       34
<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 Debenture Issuer under the Indenture may succeed to the
Sponsor's ownership of the Common Securities.

                  (c) Capital Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Declaration
and in the terms of the 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 (i)
duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing and (ii) accompanied, if such
Security is being transferred prior to the Resale Restriction Termination Date,
by a certificate substantially in the form set forth as Exhibit B or C, as
applicable, hereto. 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


                                       35
<PAGE>


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) Prior to the Resale Restriction Termination Date, the
Capital Securities shall bear the Restricted Securities Legend. The Restricted
Securities Legend on any outstanding Capital Security shall not be removed
unless there is delivered to the Trust such satisfactory evidence, which may
include an opinion of counsel, as may be reasonably required by the Trust, that
neither the Restricted Securities 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
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 in exchange for the Capital Securities bearing
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 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 prior to the
Resale Restriction Termination Date 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 prior to the Resale Restriction
Termination Date otherwise than to a QIB, accompanied by a certificate of the
transferee substantially in the form set forth as Exhibit B hereto.

                  (c) The Capital Securities may not be transferred prior to the
Resale Restriction Termination Date except in compliance with restrictions on
transfer set forth in the legend set forth below (the "Restricted Securities
Legend"), and except as otherwise contemplated in Section 8.2(a), prior to the
Resale Restriction Termination Date, each Capital Security shall bear the
Restricted Securities Legend:

                  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 OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, HEREIN AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH


                                       36
<PAGE>


SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE
LATER OF (i) TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144(k) OF THE SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL
ISSUANCE HEREOF AND (Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS
DEFINED IN RULE 405 UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND
(ii) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN
APPLICABLE LAW, 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 THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR PARTICIPATION
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 IN VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO
OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED STATES PURSUANT
TO REGULATION S UNDER THE SECURITIES ACT OR (E) 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 CLAUSE
(C), OR (E) ABOVE 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 OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR
THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

                  THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION
HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF
AVAILABLE


                                       37
<PAGE>


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 OR SUCH INTEREST OR PARTICIPATION 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 OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, 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 AND HOLDING 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 OF THIS SECURITY
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 OR ANY INTEREST OR PARTICIPATION FOR ANY
PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL
BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN.

                  (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


                                       38
<PAGE>


name any Certificate shall be registered on the books and records of the Trust
as the sole Holder and owner 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 other 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.

                                   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 any deficit upon dissolution of the Trust or
                  otherwise.

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

                  (c) Pursuant to Section 3803(a) of the Statutory 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, willful misconduct or bad faith
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, willful misconduct or bad faith 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


                                       39
<PAGE>


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.

                  (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.


                                       40
<PAGE>


                           (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.

                           (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


                                       41
<PAGE>


                  (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, willful misconduct or bad faith 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 shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Sponsor or Capital Security
Holders of the Trust or otherwise, both as to action in such Person's official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 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 is in effect. Any repeal or modification
of this Section shall not affect any rights or obligations then existing.


                                       42
<PAGE>


                  (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.

                  (e) For purposes of this Section, 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
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 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 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 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.


                                       43
<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 each of the Trustees upon request for all
                  reasonable, documented expenses, disbursements and advances
                  incurred or made by such Person in accordance with any
                  provision of this Declaration (including the reasonable
                  compensation and the expenses and disbursements of such
                  Person's agents and counsel), except any such expense,
                  disbursement or advance attributable to such Person's
                  negligence, willful misconduct or bad faith.

                  (b) The provisions of this Section 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. The fiscal year (the "Fiscal Year")
of the Trust shall be the calendar year, or such other year as 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 Sponsor shall cause the Administrators to deliver to
each Holder of Securities: (i) each Form 10-K and Form 10-Q prepared by the
Sponsor and filed with the Commission in accordance with the Exchange Act,
within 90 days after the filing of each Form 10-K and within 30 days after the
filing of each Form 10-Q; and (ii) 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 statements of
income or loss for the Fiscal Year then ended, that are prepared at the
principal office of the Trust in the United States, as defined for purposes of
Treasury Regulations Section 301.7701-7.

                  (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


                                       44
<PAGE>


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 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
ALESCO Preferred Funding I, Ltd. or a trustee thereof, the Sponsor shall cause
the Administrators to deliver the Sponsor's reports on Form FR Y-9 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


                                       45
<PAGE>


                           (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

                           (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 Capital Securities as "Tier 1 Capital" (or its
                           equivalent) 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.


                                       46
<PAGE>


                  (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 any redemption or liquidation provisions applicable to 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 Distributions
or other amounts on or after their due date.

                  (e) Sections 9.1(b) and 9.1(c) and this Section 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);

provided, however, that no such amendment contemplated in clause (i), (ii),
(iii) or (iv) shall adversely affect the powers, preferences, rights or
interests 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 the Capital Securities or the
Common Securities may be called at any time by the Administrators (or as
provided in the terms of such Securities) to consider and act on any matter on
which Holders of such Securities are entitled to act under the terms of this
Declaration, the terms of such Securities or the rules of any stock exchange on
which the Capital Securities are listed or admitted for trading, if any. The


                                       47
<PAGE>


Administrators shall call a meeting of the Holders of such Securities if
directed to do so by the Holders of not less than 10% in liquidation amount of
such Securities. Such direction shall be given by delivering to the
Administrators one or more notices in a writing stating that the signing Holders
of such Securities wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders of Securities calling
a meeting shall specify in writing the Certificates held by the Holders of 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 liquidation 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.

                           (iii) Unless the Statutory Trust Act, this
                  Declaration, the terms of the Securities, the Trust Indenture
                  Act or the listing rules of any stock exchange on


                                       48
<PAGE>


                  which the Capital Securities are then listed or admitted 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 or
national association with trust powers, duly organized, validly existing and in
good standing under the laws of the State of Delaware or the United States of
America, respectively, 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 action on the part of the Institutional Trustee, and 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


                                       49
<PAGE>


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
by all necessary corporate action on the part of the Delaware Trustee, and 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
Statutory 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


                                       50
<PAGE>


the Securities): Vineyard Statutory Trust III, c/o Vineyard National Bancorp.,
8105 Irvine Center Drive, Irvine, CA 92618, Attention: Gordon Fong, Telecopy:
949-788-0726, Telephone: 949-271-5117;

                  (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, DE 19890-0001, Attention: Corporate
Trust Administration, Telecopy: 302-651-8882, Telephone: 302-651-1000;

                  (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, DE 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): Vineyard
National Bancorp., 8105 Irvine Center Drive, Irvine, CA 92618, Attention: Gordon
Fong, Telecopy: 949-788-0726, Telephone: 949-271-5117; or

                  (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


                                       51
<PAGE>


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, the Trustees, the Administrators and
the Holder of the Common Securities irrevocably consents to the service of
process on it in any such suit, action or proceeding 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.

                  (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.


                                       52
<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:
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                             WILMINGTON TRUST COMPANY,
                                                 as Institutional Trustee

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:

                                             VINEYARD NATIONAL BANCORP.
                                                 as Sponsor

                                             By:
                                                 -------------------------------
                                                 Name:
                                                 Title:



                                             -----------------------------------
                                             Norman Morales
                                                 as Administrator


                                             -----------------------------------
                                             Gordon Fong
                                                as Administrator


                                             -----------------------------------
                                             Richard S. Hagan
                                                as Administrator


                                       53
<PAGE>


                                     ANNEX I

                                    TERMS OF
                    CAPITAL SECURITIES AND COMMON SECURITIES

                  Pursuant to Section 6.1 of the Amended and Restated
Declaration of Trust, dated as of September 25, 2003 (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 (collectively, the "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. 10,000 Capital Securities of Vineyard
Statutory Trust III (the "Trust"), with an aggregate liquidation amount with
respect to the assets of the Trust of TEN MILLION Dollars ($10,000,000) and a
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
"MMCapS(SM)" (the "Capital Securities"). The Capital Security Certificates
evidencing the Capital Securities shall be substantially in the form of Exhibit
A-1 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice or to conform
to the rules of any stock exchange on which the Capital Securities are listed,
if any.

                  (b) Common Securities. 310 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 liquidation amount with respect to the assets
of the Trust of THREE HUNDRED TEN THOUSAND Dollars ($310,000) and a 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 floating rate of interest per annum, which, with respect to
any Distribution Period (as defined herein), will be equal to LIBOR, as
determined on the LIBOR Determination Date for such Distribution Period, plus
3.05% (the "Coupon Rate"); provided, however, that the Coupon Rate for any
Distribution Period may not exceed the Interest Rate (as defined in the
Indenture) for the related Interest Period (as defined in the Indenture).
Distributions in arrears for more than one Distribution Period will bear
interest thereon, compounded quarterly, at the applicable Coupon Rate for each
Distribution Period thereafter (to the extent permitted by applicable law). The
term "Distributions", as used herein, includes cash Distributions, any such
compounded Distributions and any Additional Amounts 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 legally available in the
Property Account therefor. The amount of Distributions payable for any
Distribution Period will be computed on the basis of a 360-day year and the
actual number of days elapsed in such Distribution Period.


                                     A-I-1
<PAGE>


                  The term "Distribution Period", as used herein, means (i) in
the case of the first Distribution Period, the period from, and including, the
date of original issuance of the Securities to, but excluding, the initial
Distribution Payment Date and (ii) thereafter, from, and including, the first
day following the end of the preceding Distribution Period to, but excluding,
the applicable Distribution Payment Date or, in the case of the last
Distribution Period, the related date of redemption.

                  (b) LIBOR shall be determined by the Calculation Agent for
each Distribution Period 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 the next preceding LIBOR Business
                  Day that is also a LIBOR Banking Day) prior to the January 15,
                  April 15, July 15 or October 15, as the case may be,
                  immediately succeeding the commencement of such Distribution
                  Period (or, in the case of the first Distribution Period, on
                  September 23, 2003) (each such day, a "LIBOR Determination
                  Date"), LIBOR shall equal the rate, as obtained by the
                  Calculation Agent, for three-month U.S. Dollar deposits in
                  Europe, which appears on Telerate (as defined in the
                  International Swap and Derivatives Association, Inc. 2000
                  Interest Rate and Currency Exchange Definitions) page 3750 or
                  such other page as may replace such page 3750, as of 11:00
                  a.m. (London time) on such LIBOR Determination Date, as
                  reported by Bloomberg Financial Markets Commodities News or
                  any successor service ("Telerate Page 3750"). "LIBOR Business
                  Day" means any day that is not a Saturday, Sunday or other day
                  on which commercial banking institutions in The City of 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 such LIBOR Determination Date, the
                  corrected rate as so substituted will be LIBOR for such LIBOR
                  Determination Date.

                           (2) If, on such LIBOR Determination Date, such rate
                  does not appear on 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 three-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 such LIBOR
                  Determination Date made by the Calculation Agent to the
                  Reference Banks. If, on such LIBOR Determination Date, at
                  least two of the Reference Banks provide such quotations,
                  LIBOR shall equal the arithmetic mean of such quotations. If,
                  on such 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 such LIBOR
                  Determination Date for three-month U.S. Dollar deposits in
                  Europe at approximately 11:00 a.m. (London time) (in an amount
                  determined by the


                                     A-I-2
<PAGE>


                  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 for such Distribution
                  Period shall be LIBOR in effect for the immediately preceding
                  Distribution Period.

                  (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 that applies to the related Distribution Period. The Calculation
Agent shall, upon the request of a Holder of any Securities, inform such Holder
of the Coupon Rate that applies to the related Distribution Period. 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 applicable 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 Distribution Periods as described herein, quarterly in arrears on
January 8, April 8, July 8 and October 8 of each year, commencing on January 8,
2004 (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 20 consecutive quarterly periods (each
such extended interest payment period, together with all previous and future
consecutive extensions thereof, is referred to herein as an "Extension Period")
at any time and from time to time on the Debentures, subject to the conditions
described below and in the Indenture. No Extension Period may end on a date
other than a Distribution Payment Date or extend beyond the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be
(each such term as defined herein). 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 applicable
during such Extension Period, compounded quarterly from the date such Deferred
Interest would have been payable were it not for the Extension Period, to the
extent permitted by applicable law. At the end of any Extension Period, the
Debenture Issuer shall pay all Deferred Interest then accrued and unpaid on the
Debentures; provided, however, that during any 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, (ii) make any payment of principal or premium
or interest on or repay, repurchase


                                     A-I-3
<PAGE>


or redeem any debt securities of the Debenture Issuer that rank in all respects
pari passu with or junior in interest to the Debentures or (iii) make any
payment under any guarantees of the Debenture Issuer that rank in all respects
pari passu with or junior in interest to the Guarantee (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 in interest to such
stock). Prior to the termination of any Extension Period, the Debenture Issuer
may further extend such Extension Period, provided, that no Extension Period
(including all previous and further consecutive extensions that are part of such
Extension Period) shall exceed 20 consecutive quarterly periods. 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 requirements herein and in the Indenture. No interest or Deferred Interest
(except any Additional Amounts that may be due and payable) shall be due and
payable during an Extension Period, except at the end thereof, but Deferred
Interest shall accrue upon each installment of interest that would otherwise
have been due and payable during such Extension Period until such installment is
paid.

                  As a consequence of any Extension Period, Distributions will
be deferred. Notwithstanding any such deferral, Distributions will continue to
accrue on the Securities, and Distributions on such accrued Distributions will
accrue, at the Coupon Rate applicable during such Extension Period, compounded
quarterly, to the extent permitted by applicable law. If Distributions are
deferred, the Distributions due shall be paid on the date that such Extension
Period terminates to Holders of the Securities as they appear on the books and
records of the Trust on the regular record date immediately preceding the
Distribution Payment Date on which such Extension Period terminates to the
extent that the Trust has funds legally available for the payment of such
Distributions in the Property Account of the Trust.

                  The Trust's funds available for Distributions 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.


                                     A-I-4
<PAGE>


                  (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 regular record dates. The relevant "regular record dates" shall be 15
days before the relevant Distribution Payment Dates. Distributions payable on
any Securities that are not punctually paid on any Distribution Payment Date, as
a result of the Debenture Issuer having failed to make a payment under the
Debentures, as the case may be, when due (taking into account any Extension
Period), will cease to be payable to the Person in whose name such Securities
are registered on the original relevant regular record date, and such defaulted
Distributions will instead be payable to the Person in whose name such
Securities are registered on the regular record date preceding the Distribution
Payment Date on which the related Extension Period terminates or, in the absence
of an Extension Period, a special record date therefor selected by the
Administrators.

                  (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.

                  (h) If any Distribution Payment Date other than any date of
redemption, falls on a day that is not a Business Day, then Distributions
payable will be paid on, and such Distribution Payment Date will be moved to,
the next succeeding Business Day, and additional Distributions will accrue for
each day that such payment is delayed as a result thereof.

                  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"), the Holders of the Securities will be
entitled to receive out of the assets of the Trust legally 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), an
amount in cash equal to the aggregate of the liquidation amount of $1,000 per
Security plus unpaid Distributions accrued thereon to the date of payment
(collectively, the "Liquidation Distribution"), unless: (i) the Debentures have
been redeemed in full in accordance with the terms thereof and of the Indenture;
or (ii) the Debentures in an aggregate principal amount equal to the aggregate
liquidation amount of such Securities and bearing accrued and unpaid interest in
an amount equal to the accrued and unpaid Distributions on 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 Statutory 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, upon receipt by the Debenture Issuer and the
Institutional Trustee for the benefit of the Trust of (i) an opinion of
nationally recognized tax counsel that Holders will not recognize any gain or
loss for United States Federal income tax purposes as a result of the
distribution of Debentures, to dissolve the Trust (including, without
limitation, upon the occurrence of a Tax Event, an Investment Company Event or a
Capital Treatment Event, each as defined herein) and (ii) 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 liquidation amount thereof.


                                     A-I-5
<PAGE>


                  The Trust shall dissolve on the first to occur of (i) October
8, 2038, 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 to the Holders of the Securities of the Debentures, upon exercise
of the right of the Holders 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 any Holder of the Common Securities, the Sponsor, the Trust or
the Debenture Issuer or (vi) when all of the Securities are then subject to
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.

                  Notwithstanding the foregoing, 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 practical by
distributing, after satisfaction of liabilities to creditors of the Trust (to
the extent not satisfied by the Debenture Issuer) as provided by applicable law,
to the Holders of the Securities, the Debentures on a Pro Rata basis, unless
such distribution is determined by the Institutional Trustee not to be
practical, in which event such Holders will be entitled to receive on a Pro Rata
basis, out of the assets of the Trust legally available for distribution to the
Holders of the Securities, after satisfaction of liabilities to creditors of the
Trust (to the extent not satisfied by the Debenture Issuer), an amount in cash
equal to the Liquidation Distribution. A Liquidation of the Trust pursuant to
clause (iv) of the immediately preceding paragraph shall occur if the
Institutional Trustee determines that such Liquidation is practical by
distributing, after satisfaction of liabilities to creditors of the Trust (to
the extent not satisfied by the Debenture Issuer), to the Holders of the
Securities on a Pro Rata basis, the Debentures, and such distribution occurs.

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

                  Upon any 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 any
Liquidation 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


                                     A-I-6
<PAGE>


interests in such of the Debentures as have an aggregate principal amount equal
to the aggregate liquidation amount of such Capital Securities and bearing
accrued and unpaid interest equal to accrued and unpaid distributions on such
Capital 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 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 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 October 8, 2033 (the
"Maturity Date") at an amount in cash equal to 100% of the principal amount
thereof plus unpaid interest accrued thereon to such date (the "Maturity
Redemption Price"). The Debentures may be redeemed by the Debenture Issuer, at
its option, in whole or in part, on any Distribution Payment Date on or after
October 8, 2008 (each, an "Optional Redemption Date"), at the Optional
Redemption Price, upon not less than 30 nor more than 60 days' prior written
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, at its option, 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' prior written 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 prior to maturity is subject to
the Debenture Issuer and the Trust having received prior approval from the
Federal Reserve, if then required under applicable capital guidelines or
policies of the Federal Reserve. Additional interest may also be payable by the
Debenture Issuer in connection with such Tax Event, Investment Company Event or
Capital Treatment Event as specified in Section 10.02 of the Indenture. Any such
interest received by the Trust will be distributed promptly to Holders of the
Securities on a Pro Rata basis.

                  "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
States federal income tax with respect to income received or accrued on the
Debentures; (ii) if the Debenture Issuer is organized under the laws of the
United States or any State thereof or the District of Columbia, interest


                                     A-I-7
<PAGE>


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 or
otherwise required to pay, or required to withhold from Distributions, 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, if the Debenture Issuer is
organized under the laws of the United States or any State thereof or the
District of Columbia, 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.

                  "Optional Redemption Price" means an amount in cash equal to
100% of the principal amount of the Debentures being redeemed plus unpaid
interest accrued on such Debentures to the related Optional Redemption Date or,
in the case of a redemption due to the occurrence of a Special Event, to the
Special Redemption Date if the Special Redemption Date is on or after October 8,
2008.

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

                  "Special Redemption Price" means, with respect to the
redemption of the Debentures following a Special Event, an amount in cash equal
to the percentage for the principal amount of the Debentures that is specified
below for the Special Redemption Date plus unpaid interest accrued thereon to
the Special Redemption Date:


                                     A-I-8
<PAGE>


<Table>
<Caption>
      Special Redemption During the 12-Month
            Period Beginning October 8,                                  Percentage of Principal Amount
      --------------------------------------                             ------------------------------
<S>                                                                      <C>
         2003                                                                        104.40%

         2004                                                                        103.52%

         2005                                                                        102.64%

         2006                                                                        101.76%

         2007                                                                        100.88%

         2008 and thereafter                                                           100%
</Table>

                  (b) Upon any repayment of the Debentures at maturity or in
whole or in part upon redemption (other than following the distribution of the
Debentures to the Holders of the Securities), the proceeds from such repayment
shall concurrently be applied to redeem Pro Rata, at a redemption price
corresponding to the applicable Maturity Redemption Price, Optional Redemption
Price or Special Redemption Price for the Debentures, as the case may be,
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid; provided, however, that Holders of
such Securities shall be given not less than 30 nor more than 60 days' prior
written notice of such redemption (other than a redemption resulting from the
maturity of the Debentures on the Maturity Date).

                  (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.

                  (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 Distribution Periods terminating on or before the
related date of redemption.

                  (e) Redemption or Distribution Procedures.

                      (i) Written notice of any redemption of, or written 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 of redemption or exchange thereof
         which, in the case of a redemption, will be the date of 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


                                     A-I-9
<PAGE>


         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
         Capital Securities are to be redeemed, the Capital Securities to be
         redeemed shall be redeemed Pro Rata from each Holder.

                      (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 or repaid as set out in this Section
         (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 price payable upon redemption of the
         Securities 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 related date of redemption. 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 subject to
         redemption and all rights of Holders of such Securities so subject to
         redemption will cease, except the right of the Holders of such
         Securities to receive the applicable price specified in Section 4(a),
         but without interest on such price. If any date of redemption of the
         Securities falls on a day that is not a Business Day, then payment of
         all amounts payable on such date will be made on the next succeeding
         Business Day, and no additional Distributions will accrue in respect of
         such payment on such next succeeding Business Day. If any amount
         payable upon redemption of the Securities is improperly withheld or
         refused and not paid either by the Trust, the Debenture Issuer or the
         Sponsor as guarantor pursuant to the Guarantee, Distributions on such
         Securities will continue to accrue at the Coupon Rate applicable from
         the date of redemption to the actual date of payment, in which case the
         actual payment date will be considered the date of redemption for
         purposes of calculating the price payable upon redemption of the
         Securities. 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.

                      (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


                                     A-I-10
<PAGE>


         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 (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, (iii)
exercising any right to rescind or annul an acceleration of the principal of all
the Debentures or (iv) consenting 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 or Super Majority,
as the case may be, 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
premium, if any, on or principal of the Debentures on the date such interest,
premium, if any, or principal is payable (or in the case of redemption, the date
of redemption), then a Holder 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
premium, if any, or interest on the Debentures having an aggregate principal
amount equal to the aggregate liquidation amount of the Capital Securities of
such Holder. The Institutional Trustee shall notify all Holders of the Capital
Securities of any default actually known to the Institutional Trustee with
respect to the Debentures unless (x) such 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


                                     A-I-11
<PAGE>


conducting a proceeding for a remedy, the Institutional Trustee shall not take
any of the actions described in clause (i), (ii), (iii) or (iv) 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.

                  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 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


                                     A-I-12
<PAGE>


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 an
acceleration of the principal of all the Debentures, provided, however, that,
where a consent or action under the Indenture would require a Super Majority,
the Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of 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. 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 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 Holders of the affected Securities will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be


                                     A-I-13
<PAGE>


effective except with the approval of the Holders of a Majority in liquidation
amount of such Securities.

                  (a) 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.

                  (b) 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.

                  (c) Notwithstanding any provision of the Declaration, the
right of any Holder of the Capital Securities to receive payment of
Distributions and payments upon redemption, Liquidation 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


                                     A-I-14
<PAGE>


of any Distribution on, or any amount payable upon the redemption of, any Common
Security, and no payment to the Holder of any Common Security on account of the
Liquidation of the Trust, shall be made unless payment in full in cash of (i)
all accrued and unpaid Distributions on all outstanding Capital Securities for
all Distribution Periods terminating on or prior thereto, (ii) all amounts
payable upon Capital Securities then subject to redemption and (iii) all amounts
payable upon Capital Securities in the event of the Liquidation of the Trust, in
each case, 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 the amounts specified in clause (i), (ii) and (iii) above that
are 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 and the Indenture,
including the subordination provisions therein.

                  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.


                                     A-I-15
<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 OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, HEREIN AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO
YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405
UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, 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 THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7)
OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION 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 IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR
(E) 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 CLAUSE (C) OR (E) ABOVE 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


                                     A-1-1
<PAGE>


OBTAINED FROM THE DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY OR
ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS
THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

                  THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, 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 OR PARTICIPATION
HEREIN, 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 OR SUCH INTEREST OR PARTICIPATION 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 OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, 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 AND HOLDING 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 OF THIS SECURITY
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


                                     A-1-2
<PAGE>


THIS SECURITY OR ANY INTEREST OR PARTICIPATION FOR ANY PURPOSE, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.


                                     A-1-3
<PAGE>


      Certificate Number [_____]           Number of Capital Securities [_____]

                                CUSIP NO [CUSIP#]

                    Certificate Evidencing Capital Securities

                                       of

                          VINEYARD STATUTORY TRUST III

                               Capital Securities

                (liquidation amount $1,000 per Capital Security)

                  Vineyard Statutory Trust III, a statutory trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that [    ] is
the registered owner (the "Holder") of [    ] capital securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
designated as MMCapS(SM) (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). Subject to the Declaration (as defined below), the
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this Certificate duly
endorsed and in proper form for transfer. The 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 September 25, 2003,
among Norman Morales, Gordon Fong and Richard S. Hagan, as Administrators,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Institutional Trustee, Vineyard National Bancorp., 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 and the Indenture 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.

                  By acceptance 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.


                                     A-1-4
<PAGE>


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

                                         VINEYARD STATUTORY TRUST III

                                         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:
                                                -----------------------------


                                     A-1-5
<PAGE>


                          [FORM OF REVERSE OF SECURITY]

                  Distributions payable on each Capital Security will be payable
at a floating rate of interest per annum, which, with respect to any
Distribution Period (as defined herein), will be equal to LIBOR, as determined
on the LIBOR Determination Date for such Distribution Period, plus 3.05% (the
"Coupon Rate"); provided, however, that the Coupon Rate for any Distribution
Period may not exceed the Interest Rate (as defined in the Indenture) for the
related Interest Period (as defined in the Indenture). Distributions in arrears
for more than one Distribution Period will bear interest thereon, compounded
quarterly, at the applicable Coupon Rate for each Distribution Period thereafter
(to the extent permitted by applicable law). The term "Distributions", as used
herein, includes cash Distributions, any such compounded Distributions and any
Additional Amounts 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 legally available in the Property Account
therefor. The amount of Distributions payable for any Distribution Period will
be computed on the basis of a 360-day year and the actual number of days elapsed
in such 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 quarterly in arrears on January 8, April 8, July 8,
and October 8 of each year, commencing on January 8, 2004 (each, a "Distribution
Payment Date"), subject to the Business Day convention specified in the
Declaration. 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 20 consecutive quarterly periods (each such extended interest payment
period, together with all previous and future consecutive extensions thereof, is
referred to herein as an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below and in the
Declaration and the Indenture. No Extension Period may end on a date other than
a Distribution Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be. 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 applicable during such Extension Period, compounded quarterly
from the date such Deferred Interest would have been payable were it not for the
Extension Period, to the extent permitted by applicable law. At the end of any
Extension Period, the Debenture Issuer shall pay all Deferred Interest then
accrued and unpaid on the Debentures; provided, however, that prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such Extension Period, provided, that no Extension Period (including all
previous and further consecutive extensions that are part of such Extension
Period) shall exceed 20 consecutive quarterly periods. 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
requirements set forth herein and in the Declaration and the Indenture. No
interest or Deferred Interest (except any Additional Amounts that may be due and
payable) shall be due and payable during an Extension Period, except at the end
thereof, but Deferred Interest shall accrue upon each installment of interest
that would otherwise have been due and payable during such Extension Period
until such installment is paid.


                                     A-1-6
<PAGE>


                  As a consequence of any Extension Period, Distributions will
be deferred. 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 regular
record date immediately preceding the Distribution Payment Date on which such
Extension Period terminates to the extent that the Trust has funds legally
available for the payment of such Distributions in the Property Account of the
Trust.

                  The Capital Securities shall be redeemable, and shall be
entitled to the Liquidation Distribution, as provided in the Declaration.


                                     A-1-7
<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.


                                     A-1-8
<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.


                                     A-2-1
<PAGE>


       Certificate Number [_____]            Number of Common Securities [____]

                    Certificate Evidencing Common Securities

                                       of

                          VINEYARD STATUTORY TRUST III

                  Vineyard Statutory Trust III, a statutory trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that Vineyard
National Bancorp. is the registered owner (the "Holder") of [    ] 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 September 25, 2003, among Norman Morales, Gordon Fong and
Richard S. Hagan, 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 the Holder 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.

                  By acceptance 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.


                                     A-2-2
<PAGE>


                  IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of ____, 2003.

                                            VINEYARD STATUTORY TRUST III

                                            By:
                                               ----------------------------
                                               Name:
                                               Title: Administrator



                                     A-2-3
<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 floating rate of interest per annum, which, with respect to any
Distribution Period (as defined herein), will be equal to LIBOR, as determined
on the LIBOR Determination Date for such Distribution Period, plus 3.05% (the
"Coupon Rate"); provided, however, that the Coupon Rate for any Distribution
Period may not exceed the Interest Rate (as defined in the Indenture) for the
related Interest Period (as defined in the Indenture). Distributions in arrears
for more than one Distribution Period will bear interest thereon, compounded
quarterly, at the applicable Coupon Rate for each Distribution Period thereafter
(to the extent permitted by applicable law). The term "Distributions", as used
herein, includes cash Distributions, any such compounded Distributions and any
Additional Amounts 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 legally available in the Property Account
therefor. The amount of Distributions payable for any Distribution Period will
be computed on the basis of a 360-day year and the actual number of days elapsed
in such 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 quarterly in arrears on January 8, April 8, July 8,
and October 8 of each year, commencing on January 8, 2004 (each, a "Distribution
Payment Date"), subject to the Business Day convention specified in the
Declaration. 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 20 consecutive quarterly periods (each such extended interest payment
period, together with all previous and future consecutive extensions thereof, is
referred to herein as an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below and in the
Declaration and the Indenture. No Extension Period may end on a date other than
a Distribution Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be. 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 applicable during such Extension Period, compounded quarterly
from the date such Deferred Interest would have been payable were it not for the
Extension Period, to the extent permitted by applicable law. At the end of any
Extension Period, the Debenture Issuer shall pay all Deferred Interest then
accrued and unpaid on the Debentures; provided, however, that prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such Extension Period, provided, that no Extension Period (including all
previous and further consecutive extensions that are part of such Extension
Period) shall exceed 20 consecutive quarterly periods. 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
requirements set forth herein and in the Declaration and the Indenture. No
interest or Deferred Interest (except any Additional Amounts that may be due and
payable) shall be due and payable during an Extension Period, except at the end
thereof, but Deferred Interest shall accrue upon each installment of interest
that would otherwise have been due and payable during such Extension Period
until such installment is paid.


                                     A-2-4
<PAGE>


                  As a consequence of any Extension Period, Distributions will
be deferred. 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 regular
record date immediately preceding the Distribution Payment Date on which such
Extension Period terminates to the extent that the Trust has funds legally
available for the payment of such Distributions in the Property Account of the
Trust.

                  The Common Securities shall be redeemable, and shall be
entitled to the Liquidation Distribution, as provided in the Declaration.


                                     A-2-5
<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
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.



                                     A-2-6
<PAGE>


                                                                       EXHIBIT B

                         FORM OF TRANSFEREE CERTIFICATE
                  TO BE EXECUTED BY TRANSFEREES OTHER THAN QIBS


                                                                           , [ ]
                                                                 ----------

Vineyard National Bancorp.
Vineyard Statutory Trust III
9590 Foothill Blvd
Rancho Cucamonga, CA 91730


Re: Purchase of $[SPECIFY] liquidation amount of MMCapS(SM)
    (the "Capital Securities") of Vineyard Statutory Trust III (the "Trust")


Ladies and Gentlemen:

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

                  1. We understand that the Capital Securities of the Trust 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 Capital Securities that, if we decide to
offer, sell or otherwise transfer any such Capital Securities prior to the date
which is the later of (i) two years (or such shorter period of time as permitted
by Rule 144(k) under the Securities Act) after the later of (Y) the date of
original issuance of the Capital Securities and (Z) the last date on which the
Trust or any Affiliate (as defined in Rule 405 under the Securities Act) of the
Trust was the holder of any such Capital Securities (or any predecessor thereto)
and (ii) such later date, if any, as may be required by any subsequent change in
applicable law (the "Resale Restriction Termination Date"), then such offer,
sale or other 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), (7) or (8) of Rule 501 under the Securities
Act that is acquiring any such Capital 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, (d) pursuant to offers and sales to a non-U.S.
Person that occur outside the United States pursuant to Regulation S under the
Securities Act, or (e) 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. If any resale
or other transfer of the Capital 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


                                       B-1
<PAGE>


meaning of subparagraph (a)(1), (2), (3), (7) or (8) of Rule 501 under the
Securities Act that is acquiring such Capital Securities for investment purposes
and not for any distribution in violation of the Securities Act. We acknowledge
on our behalf and on behalf of any investor account for which we are purchasing
Capital Securities that the Company and the Trust 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 Vineyard National Bancorp. (the "Company") and the Trust. We
understand that the certificates for any Capital Securities that we receive
prior to the Resale Restriction Termination Date 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), (7) or (8) 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 Capital Securities for investment purposes
and not with view to, or for offer or sale in connection with, any distribution
in violation of the Securities Act, and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Capital 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 Capital 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 Capital Securities in violation of the Securities Act, 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, we
will acquire such Capital Securities having an aggregate liquidation amount of
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 or arrangement subject to
the Employee Retirement Income Security Act of 1974, as amended, or to Section
4975 of the Internal Revenue Code of 1986, as amended (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 Capital Securities on behalf of or with "plan
assets" by reason of any Plan's investment in the entity and are not purchasing
the Capital 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 each Plan, by its purchase of the
Capital Securities, will be deemed to have directed the Trust to invest in the
Debentures, and to have consented to the appointment of the Institutional
Trustee.

                  7. We acknowledge that the Company, the Trust and others will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agree that if any of our
acknowledgments, representations, warranties and


                                       B-2
<PAGE>


agreements are no longer accurate, we shall promptly notify the Placement Agent.
If we are acquiring any Capital 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 agreements on behalf of each such investor
account.

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

                                      ----------------------------------
                                      (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:
                   -------------------------


                                      B-3
<PAGE>


                                                                       EXHIBIT C

                         FORM OF TRANSFEROR CERTIFICATE
                             TO BE EXECUTED FOR QIBs

                                                                           , [ ]
                                                                 ----------


Vineyard National Bancorp.
Vineyard Statutory Trust III
9590 Foothill Blvd
Rancho Cucamonga, CA 91730

Re:    Purchase of $[SPECIFY] liquidation amount of MMCapS(SM)
       (the "Capital Securities") of Vineyard Statutory Trust III (the "Trust")

                  Reference is hereby made to the Amended and Restated
Declaration of Trust of Vineyard Statutory Trust III, dated as of September 25,
2003 (the "Declaration"), among Norman Morales, Gordon Fong and Richard S.
Hagan, as Administrators, Wilmington Trust Company, as Delaware Trustee,
Wilmington Trust Company, as Institutional Trustee, Vineyard National Bancorp.,
as Sponsor, and the holders from time to time of undivided beneficial interests
in the assets of the Trust. Capitalized terms used but not defined herein shall
have the meanings given them in the Declaration.

                  This letter relates to $[_______________] aggregate
liquidation amount of Capital Securities which are held in the name of [name of
transferor] (the "Transferor").

                  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 thereof to any interested party in
any administrative or legal proceeding or other inquiry with respect to matters
covered hereby.

                                             -------------------------
                                             (Name of Transferor)


                                         By:
                                             --------------------------
                                             Name:
                                                  ----------------------------
                                             Title:
                                                   ---------------------------

                                             Date:
                                                  ----------------------------