Document:

Prepared and filed by St Ives Burrups

Exhibit
      10.7

EMPLOYMENT AGREEMENT

Agreement made effective
    as of the 31st day of December, 2003 (the “2003 Agreement”) between
    PROGENICS PHARMACEUTICALS, INC., a Delaware corporation (the “Corporation”)
    with its principal place of business at Old Saw Mill River Road, Tarrytown,
    New York 10591 and PAUL J. MADDON (“MADDON”) residing at                                   ,                                    , New York 10583 (the “Parties”).

RECITALS

A.    The
    Corporation is engaged in the business of developing and marketing pharmaceutical
    products
  in the areas of oncology, virology and symptom management and supportive care.
  
B.    MADDON is
        now serving as Chairman, Chief Executive Officer and Chief Science Officer
        of the Corporation.

    C.    The Corporation
        wishes to continue to employ MADDON as Chairman (subject to Section 3.6
        below), Chief Executive Officer and Chief Science Officer, and MADDON
        wishes to continue to serve the Corporation in such capacities pursuant
to the terms of this 2003 Agreement.

AGREEMENT

In consideration of the facts mentioned above and the mutual promises set forth below, the Parties agree as follows:

   

  

  

   
     

  
1.      EMPLOYMENT.

  The Corporation hereby employs MADDON as Chairman,
    Chief Executive Officer and Chief Science Officer, and MADDON hereby agrees
    to serve the Corporation in such capacities.
    
    
2.      TERM.

      2.1      The “Term” as
          used herein shall mean the Initial Term plus any Renewal Term.

  
    
2.2      This
        2003 Agreement will be for a term of two (2) years (the “Initial
        Term”), commencing on July 1, 2003, unless sooner terminated pursuant
        to Section 8.

  

  2.3      Provided
      MADDON is not in material default under this 2003 Agreement at the time
      the Initial Term expires, this 2003 Agreement shall be renewed for one
      (1) additional period of two (2) years (the “Renewal Term”),
      commencing on July 1, 2005, unless either the Corporation or MADDON gives
      written notice to the other of its or his intention not to renew at least
      Ninety (90) days before the end of the Initial Term or any Renewal Term.
      The Compensation Committee of the Board of Directors of the Corporation
      (the “Board”) (the “Compensation Committee”) will provide
      MADDON in writing with proposed terms relating to salary and minimum options
      for the Renewal Term by February 1, 2005 to enable the Parties, if necessary,
      to engage in good faith negotiations regarding the proposed terms prior
      to the Ninety (90) day notice period provided herein. 

   

  -2-

  

  

  
  

     

  3.      EMPLOYEE’S
        DUTIES.
    
3.1      As
                Chairman and Chief Executive Officer, MADDON will have broad
                management responsibilities for the activities of the Corporation.
                MADDON, while Chairman and Chief Executive Officer, and, after
                relinquishing his position as Chairman pursuant to Section 3.6
                below, while Chief Executive Officer, shall report directly and
                only to the Board, and all senior executives of the Corporation
                shall report directly or indirectly to MADDON. As Chief Science
                Officer, MADDON’s duties shall include, without limitation,
                formulating the scientific strategies of the Corporation in conjunction
                with the Scientific Advisory Board’s presenting such strategies
                to the Board for review and, subject to approval of the Board,
                directing the implementation of such strategies, as well as overseeing
                all aspects of the Corporation’s scientific operations.
    
3.2      Except
                as provided herein, MADDON will devote substantially all of his
                business time and energies to the business and affairs of the
                Corporation during the Term. MADDON’s existing outside
                activities are listed in a letter agreement between MADDON and
                the Compensation Committee, effective as of December 31, 2003
                (the “Letter Agreement”). MADDON may continue the
                activities listed in the Letter Agreement, which shall be periodically
                updated to reflect any additional professional activities approved
                by the Compensation Committee. MADDON shall not, at any time
                during the Term, directly or indirectly, enter the employ of,
                or render any service to, any person, partnership, association,
                corporation or other entity other than the Corporation, without
prior consent of the Board.

  3.3      MADDON
      will use his best efforts, skill and abilities to promote the Corporation’s
      interests and perform any duties that may be reasonably assigned to him
      by the Board, consistent with his roles as Chairman (while he is the Chairman),
      Chief Executive Officer and Chief Science Officer.

   

 

-3-

  

3.4      MADDON consents
  and agrees to cooperate with the Corporation to continue the Key-man life insurance
  on MADDON’s life and to increase such insurance to such amount determined
  appropriate by the Board from time to time.
  
3.5      The
            Corporation shal1 use its best efforts to cause MADDON to be nominated
            to the Board of Directors of the Corporation.

        3.6      After
            the Board completes an external search for an appropriately experienced
            retired pharmaceutical or biotechnology executive who is elected
            as non-executive Chairman, MADDON shall relinquish his position as
            Chairman.

        4.      REMUNERATION.

        4.1      The
            Corporation will pay MADDON, for all services to be rendered under
            this 2003 Agreement, an annual salary (“Salary”), payable
            in accordance with the normal payroll policy of the Corporation,
            of Four Hundred Ninety Nine Thousand Eight Hundred Fifty Nine Dollars
            and Four Cents ($499,859.04), adjusted as hereinafter provided, for
            the Term.

        4.2      Each
            January 1 during the Initial Term of this 2003 Agreement, commencing
            on January 1, 2004, the annual Salary then in effect shall be multiplied
            by 103% (or such higher percentage as the Board shall determine in
            its sole discretion) and the product shall be the adjusted Salary
            for the next succeeding twelve (12) month period during the Initial
            Term.

-4-

  

4.3      During each year
  of the Term of this Agreement, MADDON may receive an annual bonus payment reflecting
  his contribution to the Corporation and the Corporation’s results in an
  amount the Compensation Committee determines appropriate in its sole discretion.
  Such annual bonus shall be determined on a calendar year basis and shall be
  paid between December and February, consistent with the Corporation’s
  practice and schedule for the payment of bonuses to other senior executives
  of the Corporation. 
  
4.4      This 2003
        Agreement will not be deemed abrogated or terminated if the Corporation,
        in its discretion, determines to increase the Salary of MADDON for any
        period of time, or if MADDON accepts an increase; but, except as specifically
        provided in this 2003 Agreement, the Corporation shall have no obligation
        to make any increase in the Salary above the 103% minimum increase set
        forth in paragraph 4.2 above. Any increase in MADDON’s Salary by
        the Corporation shall be incorporated into his annual Salary then in
        effect for purposes of future payments of and adjustments to the Salary,
        and no reduction in his salary shall be made without his written consent.

    5.      STOCK
            OPTIONS.

    5.1      As of June
        29, 2003, and in addition to his interest in the Corporation’s 1998
        Non-Qualified Employee Stock Purchase Plan, MADDON is the owner of 637,002
        shares of Common Stock of the Corporation and options to purchase 1,107,774
        shares of such Common Stock, which the Corporation acknowledges are fully
        vested in MADDON and exercisable (except for 33,000 milestone based options
        which were granted on July 1, 2002 and which are subject to vesting and
        becoming exercisable in the future and 37,500 traditional options which
        were granted on July 1, 2002 and which are subject to vesting and becoming
        exercisable on December 22, 2003) and are not subject to any repurchase
        or other restrictions except pursuant to applicable securities and other
        laws (the “Existing Options”). The Corporation hereby agrees
        that for purposes of the Existing Options, except as set forth above,
        the relevant written stock option agreements shall apply to all such
        Existing Options, and nothing in this 2003 Agreement shall be construed
        or interpreted so as to govern the grant, vesting or exercise of any
        Existing Options.

-5-

  

5.2      Traditional
      Non-qualified Options. On June 30, 2003, the Corporation granted to
      MADDON under the Corporation’s 1996 Stock Incentive Plan, as amended,
      irrevocable options to purchase up to 112,500 shares of the Corporation’s
      Common Stock (the “Traditional Options”) in the form of Non-qualified
      options (“NQOs”) at an exercise price of $15.06 per share,
      representing the fair market value per share of the Common Stock as of
      the close of business on June 30, 2003. Subject to the forfeiture and acceleration
      provisions set forth below, the NQOs shall have a duration of ten (10)
      years from June 30, 2003 and vest and become exercisable as follows:

 

-6-

	Tranche	Tranche

Exercisable as to	Cumulative
Exercisable As of
	Vesting Date	Shares	% Total	Vesting Date
	
	
	
	

	June 30, 2004
	28,125	25%	   28,125     Shares

	June 30, 2005
	28,125	25%	   56,250     Shares

	June 30, 2006
	28,125	25%	   84,375     Shares

	June 30, 2007
	28,125	25%	112,500     Shares

	 	 	 	 

5.3      Milestone Based
    Options. In addition to the Traditional Options, on June 30, 2003 the
    Corporation granted to MADDON under the Corporation’s 1996 Stock Incentive
    Plan, as amended, irrevocable NQOs to purchase up to 112,500 shares of the
    Corporation’s Common Stock at a price of $15.06 per share, representing
    the fair market value per share of the Common Stock as of the close of business
    on June 30, 2003 (the “Milestone Based Options”). The Milestone
    Based Options shall vest nine (9) years and eleven (11) months from June
    30, 2003, and have a duration of ten (10) years from June 30, 2003, except
    as otherwise provided herein. In accordance with the terms of the Milestone
    Based Options as set forth in the accompanying option award agreement, the
    vesting of such options shall accelerate upon the achievement of certain
    clinical, financial and operational milestones. 

   

-7-

  

5.4      Subsequent
      Option Grants. On June 30, 2004, the Corporation will grant to MADDON
      irrevocable options to purchase up to 75,000 shares of the Corporation’s
      Common Stock at an exercise price representing the fair market value per
      share of the Common Stock as of the close of business on June 30, 2004
      (the “Future Options”). Fifty percent (50%) of the Future Options
      shall, except for the exercise price, be the same as the Traditional Options
      and shall vest over four (4) years, with twenty-five percent (25%) thereof
      vesting on each of the first, second, third and fourth anniversaries of
      June 30, 2004. The other Fifty percent (50%) of the Future Options shall,
      except for the exercise price and milestones, be the same as the Milestone
      Based Options and shall vest nine (9) years and eleven (11) months from
      June 30, 2004; however, the vesting of such options shall accelerate upon
      the achievement of certain milestones as set forth in the relevant option
      award agreement. In addition, subject to the performance of both MADDON
      and the Corporation, on June 30, 2004 the Compensation Committee may grant
      MADDON additional Future Options (50% will, except for the exercise price
      and the four year vesting period, which will start on June 30, 2004, be
      the same as the Traditional Options and 50% will, except for the exercise
      price and the milestones, be the same as the Milestone Based Options) subject
      to the same terms and conditions as specified in this Section 5.4. If the
      Corporation is meeting its major business objectives in a timely manner
      and MADDON is achieving a high standard of performance, both as determined
      by the Compensation Committee in its sole discretion (provided that the
      Compensation Committee shall set such performance objectives by February
      15, 2004 in its sole discretion after consultation with MADDON), then the
      minimum target level for any such additional Future Options will be 75,000
      shares of the Corporation’s Common Stock. The milestones in the Future
      Options shall be set by the Compensation Committee in the exercise of its
      reasonable discretion after consultation with MADDON.

 

-8-

  

5.5      General Terms
    of Options. The general terms and conditions governing Traditional Options
    and the Milestone Based Options are set forth in written stock option agreements
    that were previously executed and delivered to MADDON and any general terms
    and conditions governing Future Options will be set forth in written stock
    option agreements executed and delivered to MADDON at the time of such grant
    (collectively, the “Options”). The option agreements provide, among
    other things, that in the event MADDON wishes to exercise the exercisable
    portion of an option, MADDON shall send written notice to the Corporation
    specifying a date (not later than twenty (20) business days and not earlier
    than the next business day following the date such notice is given) for the
    closing of such purchase. The exercise price of the Options may be paid by
    MADDON in cash or by the delivery of Common Stock of the Corporation that
    has been held for more than six (6) months. In the latter case the fair market
    value of the Common Stock delivered, determined by reference to the last
    reported sales price of the Common Stock on the NASDAQ National Market (or
    such other exchange as may be the principal exchange on which the Corporation’s
    Common Stock is listed) on the last day prior to such exercise on which trading
    occurred, will be applied to the exercise price.
  
5.6      Acceleration
            of Exercise Schedule Upon a Change in Control. All Options shall
            vest and become fully exercisable immediately upon any “Change
            in Control” . For purposes of this Agreement, a “Change
in Control” shall mean:

-9-

  

	 	 	(i)      a change
        in the composition of the Board such that during any period of two consecutive
        years, individuals who at the beginning of such period constitute the
        Board, and any new director (other than a director designated by a person
        who has entered into an agreement with the Corporation to effect a transaction
        described in clause (ii) or (iii) of this paragraph) whose election by
        the Board or nomination for election by the Corporation’s stockholders
        was approved by a vote of at least two-thirds of the directors then still
        in office who either were directors at the beginning of the period or
        whose election or nomination for election was previously so approved,
        cease for any reason to constitute at least a majority of the members
        thereof; 
      
(ii)      the
              approval by the stockholders of the Corporation of a merger, consolidation,
              reorganization or similar corporate transaction, whether or not
              the Corporation is the surviving corporation in such transaction,
              in which outstanding shares of Common Stock are converted into
              (A) shares of stock of another company, other than a conversion
              into shares of voting common stock of the successor corporation
              (or a holding company thereof) representing more than 50% of the
              voting power of all capital stock thereof outstanding immediately
              after the merger or consolida­tion, or (B) other securities
              (of either the Corpora­tion or another company) or cash or
              other property; or

          (iii)      any “Person” (as
              defined in Section 3(a)(9) of the Securities Exchange Act of 1934,
              as amended (the “Exchange Act”), as modified and used
              in Sections 13(d) and 14(d) thereof, except that such term shall
              not include (1) the Corporation, (2) a trustee or other fiduciary
              holding securities under an employee benefit plan of the Corporation,
              (3) an underwriter temporarily holding securities pursuant to an
              offering of such securities or (4) a corporation owned, directly
              or indirectly, by the shareholders of the Corporation in substantially
              the same proportions as their ownership of stock of the Corporation,
              who is or becomes the “Beneficial Owner” (as defined
              in Rule 13d-3 under the Exchange Act), directly or indirectly,
              of securities of the Corporation (not including in the securities
              Beneficially Owned by such Person any securities acquired directly
              from the Corporation) representing 30% or more of the voting power
              of all capital stock thereof outstanding, excluding any Person
              who is an officer or director of the Corporation or who becomes
              such a Beneficial Owner in connection with a transaction described
              in subparagraph (ii) of this Section 5.6, or

      

 

 

-10-

 

 

	 	(iv)      the
          approval by the stockholders of the Corporation of (A) the sale
          or other disposition of all or substantially all of the assets of the
          Corpora­tion, or (B) a complete liquidation or dissolution
          of the Corporation.

	 	 

5.7      No Options shall
  be subject to any limitations under any stock option plan or otherwise in the
  post-employment period during which such Options may be exercised, except as
  provided in Section 8 hereof.
  
5.8      Notwithstanding
        the foregoing, in the event of a conflict between the provisions of any
        Option agreement described in Sections 5.2 through 5.7 (the Traditional
        Options, the Milestone Based Options and the Future Options) and this
        2003 Agreement, the terms of this 2003 Agreement shall prevail.

    6.      EMPLOYEE
            BENEFITS.

    6.1      During the
        Term of this 2003 Agreement, MADDON shall be eligible to participate
        in all employee benefit plans and programs of the Corporation in which
        other senior executives of the Corporation are eligible to participate
        from time to time, including, without limitation, any qualified or non-qualified
        pension, 401(k), profit sharing and savings plans, any welfare benefit
        plans (including, without limitation, medical, dental, vision and health
        plans and disability and group life insurance coverages) (hereafter,
        collectively, the “Welfare Benefits”), subject to and on a
        basis consistent with the terms, conditions and overall administration
        of such plans and programs. MADDON shall be entitled to participate in
        such plans and programs on terms no less favorable to MADDON than those
        on which senior executives of the Corporation generally participate.
        Without limiting the generality of the foregoing, the Corporation shall
        provide MADDON with such long-term disability and life insurance benefits
        as are made generally available to senior executives of the Corporation.

 

-11-

 

 

6.2      During the Term
  of this 2003 Agreement, MADDON shall be entitled to such fringe benefits and
  perquisites as are made generally available to senior executives of the Corporation
  from time to time. Notwithstanding the foregoing, in each calendar year of
  the Term MADDON shall accrue four weeks’ paid vacation. In each calendar
  year commencing with the calendar year ending December 31, 2003, MADDON
  may carry over and use up to two weeks of such vacation during the next calendar
  year.
  
6.3      MADDON acknowledges
        and agrees that the Corpora­tion does not guarantee the adoption
        or continuance of any particular employee benefit plan or program or
        other fringe benefit during the terms of this Agreement, and participation
        by MADDON in any such plan or program shall be subject to the rules and
        regulations applicable thereto.

    7.      REIMBURSEMENT
            OF EXPENSES.

    The Corporation
        shall provide MADDON with reimbursement of all reasonable travel (including
        car leasing expenses) and other business expenses and disbursements incurred
        by MADDON in the performance of his duties under this 2003 Agreement,
        upon proper accounting in accordance with the Corporation’s normal
        practices and procedures for reimbursement of business expenses.

-12-

  

8.      TERMINATION.
  
8.1      The Term
        and this 2003 Agreement, except those provisions specified to survive
        termination, shall termi­nate before the expiration date set forth
above in Section 2 on the occurrence of the earlier of the following:

8.1.1      On the dissolution
  of the Corpora­tion;
  8.1.2      On the
        death or disability of MADDON. Disability shall mean the failure by MADDON,
        because of illness or incapacity, to render for One Hundred Twenty (120)
        days consecutively or One Hundred Eighty (180) days cumulatively during
        any twelve (12) month period of the Term, services of the character contemplated
        by this 2003 Agreement;

    8.1.3      On the
        dismissal of MADDON for Good Cause. For purposes of this 2003 Agreement, “Good
        Cause” shall mean: 

    	 	 	(i)      the
              continual failure to perform substantially his duties with the
              Corporation or follow the reasonable instructions of the Board
              (other than any such failure(s) resulting from incapacity due to
              physical or mental illness) after a demand in writing is delivered
              to MADDON by the Board, specifying the claimed basis of such failure(s)
              and providing MADDON with a sixty (60) day opportunity to cure;

        
	 	 	 

 

-13-

 

 

	 	 	
      
(ii)      conviction
                of a felony or a guilty or nolo contendere plea with respect
                thereto; 

            (iii)      habitual
                drunkenness or habitual use of illegal narcotics; 

            (iv)      excessive
                absenteeism not related to sick leave or vacations (but only
                after sixty (60) days prior written notice is received by MADDON
                from the Board) followed by a repetition of such excessive absenteeism;

            (v)      continuous
                conflict of interest after MADDON receives notice in writing
                from the Board;

            (vi)      material
                breach of any of the Corporation’s written policies that
                are material to the business or reputation of the Corporation
                and applicable to senior executives of the Corporation or any
                of the material provisions of this 2003 Agreement; or

            (vii) engagement in illegal conduct
                that is directly and materially injurious to the Corporation;

      

    
	 	 	 

provided, however,
      that in addition to any and all notices specified in this Section 8.1.3,
      any dismissal for Good Cause shown must be effected by the Board after
      a Board meeting for which MADDON has at least (10) days prior written notice
      and at which MADDON has the opportunity to have counsel present to represent
him in connection with the issues concerning such removal for Good Cause;

8.1.4      On
    the dismissal of MADDON without cause (that is, for any reason the Corporation
    shall determine
  other than for Good Cause shown or death or disability); and
  8.1.5      On the
        resignation of MADDON.

    8.2.1     Upon
        termination of the Term and this 2003 Agreement at the expiration of
the Initial Term or Renewal Term, the following shall occur:

 

-14-

 

 

	 	 	a.    If (x) the Corporation
    proposes salary and option grant terms for the Renewal Term that are reasonably
    consistent with this 2003 Agreement (i.e., an annual minimum salary increase
    of three percent (3%), an initial grant on July 1, 2005 of 75,000 traditional
    options (which will, except for the exercise price and the four year vesting
    period which will start on July 1, 2005, be the same as the Traditional Options)
    and 75,000 milestone based options (which will, except for the exercise price
    and the milestones, be the same as the Milestone Based Options) and an additional
    grant on July 1, 2006 of at least 75,000 options and a minimum target of
    an additional 75,000 options) and such terms are proposed to be incorporated
    in this 2003 Agreement, but MADDON rejects the Corporation’s proposal
    and either party delivers to the other party a notice of non-renewal pursuant
    to Section 2 hereof or (y) the Term ends at the end of the Renewal Term,
    MADDON shall (i) be entitled to receive any salary, expense reimbursements
    or other amounts from the Corporation then due but unpaid (which in the case
    of the salary shall be prorated to the date of termination) together with
    such annual bonus in respect of the period from the end of the period in
    respect of which the last annual bonus was paid to such date of termination,
    as the Compensation Committee determines appropriate in its sole discretion
    as contemplated by Section 4.3 (an “Ending Bonus”), and (ii) have
    the right to exercise the Options granted pursuant to Section 5 hereof in
    accordance with Section 5 hereof, except that if MADDON’s employment
    by the Corporation shall cease for any reason upon the termination of the
    Term or thereafter, except as set forth below any Options not vested at the
    date such employment shall cease shall be forfeited.

  

 

-15-

 

 

	 	 	b.      If
          (x) the Corporation does not propose terms for a Renewal Term and either
          party delivers to the other party a notice of non-renewal pursuant
          to Section 2 hereof or (y) the Corporation proposes salary and option
          grant terms for a Renewal Term that are not reasonably consistent with
          this 2003 Agreement (see Section 8.2.1(a)) and MADDON delivers to the
          Corporation a notice of non-renewal pursuant to Section 2 hereof (either
          (x) or (y) a “Specified Non-Renewal”), MADDON shall (i) be
          entitled to receive any salary, expense reimbursements or other amounts
          from the Corporation then due but unpaid (which in the case of the
          salary shall be prorated to the date of termination), (ii) be paid
          a lump sum amount equal to the sum
of MADDON’s current annual Salary plus the average annual regular bonus
paid to MADDON over the three (3) years preceding the year in which such termination
occurs (the “Average Bonus”), (iii) for a period of one (1) year following
such termination, continue to receive all Welfare Benefits (or the cash equivalent
thereof, which shall be the same level of Welfare Benefits as offered by the
Corporation that can be obtained by MADDON privately (hereafter, the “Welfare
Cash Equivalent”) in the discretion of the Corporation) described in Section
6 hereof, (iv) be fully vested with all of the Traditional Options granted under
Section 5 hereof, (v) have the right to exercise any Traditional Options in accordance
with Section 5, and (vi) have the right to exercise any Milestone Based Options
vested or whose vesting shall accelerate in accordance with Section 5 hereof
within two and one-half (2.5) years from the date of termination (or the end
of the acceleration period under Section 5, if earlier) in accordance with Section
5 hereof and the balance of such Milestone Based options not so vested or vesting
within such period shall be forfeited. 

    

 

-16-

  

8.2.2      Upon
    the dismissal of MADDON for Good Cause or on the resignation of MADDON other
    than for Good Reason (as defined below), MADDON shall (i) be entitled
    to receive any salary, expense reimbursements or other amounts from the Corporation
    then due but unpaid (which in the case of the salary shall be prorated to
    the date of termination), (ii) have the right to exercise any Milestone
    Based Options then vested in MADDON only for a period of three (3) months
    after the date of termination, (iii) have the right to exercise any
    other Options then vested in MADDON in accordance with Section 5 hereof,
    and (iv) any Options not vested at the date of termination shall be
    forfeited. 

 

 

-17-

  

8.2.3      Upon
    the termination of the Term and this 2003 Agreement on the death or disability
    of MADDON, MADDON’s estate or MADDON, as the case may be, shall (i) be
    entitled to receive any salary, expense reimbursements or other amounts from
    the Corporation then due but unpaid (which in the case of the salary shall
    be prorated to the date of termination) together with an Ending Bonus, (ii) for
    a period of two years following such termination, continue to receive all
    Welfare Benefits (or the Welfare Cash Equivalent thereof, in the discretion
    of the Corporation) described in Section 6 hereof, (iii) have the
    right to exercise the Traditional Options vested in MADDON in accordance
    with Section 5, (iv) have the right to exercise any Milestone Based
    Options vested or whose vesting shall accelerate in accordance with Section 5
    hereof within one year from the date of termination (or the end of the acceleration
    period under Section 5, if earlier) in accordance with Section 5
    hereof and the balance of such Milestone Based Options not so vested or vesting
    within such period shall be forfeited, and (v) any Traditional Options
    not vested at the date of termination shall be forfeited. 

 

 

-18-

 

 

8.2.4      Upon
    termination of the Term and this 2003 Agreement on the dismissal of MADDON
    without Good Cause during the Term hereof or on the resignation of MADDON
    for Good Reason, MADDON shall (i) be entitled to receive any salary,
    expense reimbursements and other amounts from the Corporation then due but
    unpaid (which in the case of the salary shall be prorated to the date of
    termination) together with an Ending Bonus, (ii) be paid a lump sum
    amount equal to two times the sum of MADDON’s current annual Salary
    and the Average Bonus, (iii) for a period of two years following such termination,
    continue to receive all Welfare Benefits (or the Welfare Cash Equivalent
    thereof, in the discretion of the Corporation) described in Section 6
    hereof, (iv) be vested with all of the Options granted under Section 5
    hereof, (v) have the right to exercise any Traditional Options in accordance
    with Section 5, and (vi) have the right to exercise any Milestone
    Based Options in accordance with Section 5 hereof. Notwithstanding the foregoing,
    in the event that (x) within two (2) years after a Change in Control MADDON
    is dismissed without Good Cause or MADDON resigns for Good Reason or (y)
    within three (3) months preceding a Change in Control MADDON is dismissed
    without Good Cause, all of the terms of this Section 8.2.4 shall apply, except
    that the lump sum payment in (ii) above shall be three (3) times (not two
    times) and the Welfare Benefits (or the Welfare Cash Equivalent thereof,
    in the discretion of the Corporation) shall continue for three (3) years
    (not two years). 

 

-19-

  

8.3      For
    the purposes of this Agreement, “Good Reason” shall exist if there
    shall occur (a) a material diminution during the Term in MADDON’s
    position, title, responsibilities, authority or reporting relationship from
    that provided for in this 2003 Agreement (including his failure to be a director
    of the Corporation other than by reason of his resignation), (b) a material
    breach by the Corpora­tion of its obligations under this Agreement,
    that contin­ues after notice in writing to the Corporation specifying
    such breach for sixty (60) days or such longer period (not to exceed
    sixty (60) additional days) as is required for the Corporation to effect
    a cure or remedy of the situation or (c) the Corporation’s material
    adverse change to the directors and officers insurance arrangement applicable
    to MADDON on June 30, 2003 or the terms of the Indemnification Agreement
    entered into between the Corporation and MADDON dated as of June 1, 1995.

 

 

-20-

 

 

8.4      All lump sum payments
  to MADDON contemplated under any provision of Section 8 of this 2003 Agreement
  shall be payable no later than ten (10) calendar days following the event triggering
  the Corporation’s obligation to make such lump sum payment. All other
  payments from the Corporation to MADDON pursuant to any provision of Section
  8 of this 2003 Agreement shall be payable in accordance with the Corporation’s
  policies and the terms of any applicable Welfare Benefits or any other Corporation
  plan.
  
8.5      The Corporation
        agrees that if MADDON’s employment with the Corporation is terminated
        during the Term for any reason whatsoever, MADDON is not required to
        seek other employment or to attempt in any way to reduce any amounts
        payable to him by the Corporation pursuant to this 2003 Agreement. Furthermore,
        the amount of any payment or benefit provided for in this 2003 Agreement
        shall not be reduced by any compensation earned by MADDON or benefit
        provided to him as the result of employment by another employer or otherwise.
        In addition, the amounts payable hereunder shall not be subject to setoff,
        counterclaim, recoupment, defense or any other right which the Corporation
        may have against MADDON or others, except upon obtaining by the Corporation
of a final nonappealable judgment against MADDON. 

-21-

 

 

8.6     (a)     If
  it shall be determined that any amount paid, distributed or treated as paid
  or distributed by the Corporation (or by any individual, entity or group effecting
  a change in ownership or control of the Corporation within the meaning of Code
  Section 280G) to or for the benefit of MADDON (whether paid or payable or distributed
  or distributable pursuant to the terms of this 2003 Agreement or otherwise,
  including but not limited to payments in an employment agreement or otherwise
  to MADDON), but determined without regard to any additional payments required
  under this provision (the “Payment”) would be subject to the excise
  tax imposed by Section 4999 of the Internal Revenue Code (the “Code”)
  or any similar or successor tax that may hereafter be imposed by the Code or
  any similar state or local tax provision or any interest or penalties are incurred
  by MADDON with respect to such excise tax (such excise tax, together with any
  such interest and penalties, hereafter collectively referred to as the “Excise
  Tax”), then MADDON shall be entitled to receive an additional payment
  (a “Gross-Up Payment”) in an amount such that after payment by
  MADDON of all federal, state and local taxes (including any interest or penalties
  imposed with respect to such taxes), including, without limitation, any income
  and employment taxes (and any interest and penalties imposed with respect thereto)
  and Excise Tax, imposed upon the Gross-Up Payment, MADDON retains an amount
  of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
  
Notwithstanding the foregoing, if it shall be
      determined that MADDON is entitled to a Gross-Up Payment, but if the Payment
      (other than that portion valued under Q&A 24(c) of the final regulations
      under Section 280G of the Code (the “Stock Vesting Value”))
      (the “Cash Payment”) is reduced by the minimum amount necessary
      such that the receipt of the Payment would not give rise to any excise
      tax (the “Reduced Payment”) and the Reduced Payment (other
      than the Stock Vesting Value) would not be less than 90% of the Cash Payment,
      then no Gross-Up Payment shall be made to MADDON and the Cash Payment,
      in the aggregate, shall be reduced to the Reduced Payment (other than the
      Stock Vesting). If the Reduced Payment is to be effective, payments shall
      be reduced as mutually agreed between the Corporation and MADDON.

-22-

 

 

(b)     Subject
    to the provisions of subsection (c) hereof, all determinations required to
    be made under this Section 8.6, including whether and when a Gross-Up Payment
    is required and the assumptions to be utilized in arriving at such determination,
    and whether the Payment shall be reduced in the event and manner provided
    herein, shall be made by a nationally recognized accounting firm (the “Accounting
    Firm”) which shall provide detailed supporting calculations both to
    the Corporation and to MADDON within fifteen (15) business days of the receipt
    of notice from MADDON that there has been a Payment, or such earlier time
    as is reasonably requested by the Corporation (collectively, the “Determination”).
    All fees and expenses of the Accounting Firm shall be borne solely by the
    Corporation. The Accounting Firm shall be selected by the Corporation, subject
    to the consent of MADDON which consent shall not be unreasonably withheld.
    The Accounting Firm shall not be an accounting firm serving as accountant
    or auditor for the individual, entity or group effecting the change in ownership
    or control of the Corporation. Any Gross-Up Payment determined pursuant to
    this Section 8.6 shall be paid by the Corporation to MADDON within five (5)
    days of the receipt of the Determination. If the Accounting Firm determines
    that no Excise Taxes are payable by MADDON or that the Payment should be
    reduced as prescribed herein, it shall furnish MADDON with a written opinion
    that failure to report the Excise Tax on MADDON’s applicable federal
    income tax return would not result in the imposition of a negligence or similar
    penalty, or the basis for determining that the Payment should be reduced
    as provided herein. The Determination by the Accounting Firm shall be binding
    upon the Corporation and MADDON. As a result of any uncertainty in the application
    of Section 4999 of the Code at the time of the Determination, it is possible
    that Gross-Up Payments which will not have been made by the Corporation should
    have been made (“Underpayment”) consistent with the calculations
    required to be made hereunder. In the event that the Corporation exhausts
    its remedies pursuant to this Section 8.6 or otherwise determines to make
    the Payment contemplated hereunder and MADDON thereafter is required to make
    a payment of any Excise Tax, the Accounting Firm shall determine the amount
    of the Underpayment that has occurred and any such Underpayments shall be
    promptly paid by the Corporation to or for the benefit of MADDON. 

 

 

-23-

 

 

(c)     MADDON
    shall notify the Corporation in writing of any claim by the Internal Revenue
    Service that, if successful, would require payment by the Corporation of
    the Gross-Up Payment. Such notification shall be given as soon as practicable
    but no later than ten (10) business days after MADDON is informed in writing
    of such claim and shall apprise the Corporation of the nature of such claim
    and the date on which such claim is requested to be paid. MADDON shall not
    pay such claim prior to the expiration of the thirty (30) day period following
    the date on which MADDON gives such notice to the Corporation (or such shorter
    period ending on the date that any payment of taxes with respect to such
    claim is due). If the Corporation notifies MADDON in writing prior to the
    expiration of such period that it desires to contest such claim, MADDON shall:
    (i) give the Corporation any information reasonably requested by the Corporation
    relating to such claim; (ii) take such action in connection with contesting
    such claim as the Corporation shall reasonably request in writing from time
    to time, including, without limitation, accepting legal representation with
    respect to such claim by an attorney reasonably selected by the Corporation;
    (iii) cooperate with the Corporation in good faith in order to effectively
    contest such claim; and (iv) permit the Corporation to participate in any
    proceeding relating to such claim; provided, however, that the Corporation
    shall bear and pay directly all costs and expenses (including attorney’s
    fees and any additional interest and penalties) incurred in connection with
    such contest and shall indemnify and hold MADDON harmless, on an after-tax
    basis, for any Excise Tax or income or employment tax (including interest
    and penalties with respect thereto) imposed as a result of such representation
    and payment of costs and expenses, and provided further that if the Corporation
    directs MADDON to pay such claim and sue for a refund, the Corporation shall
    advance the amount of such payment to MADDON, on an interest-free basis,
    and shall indemnify and hold MADDON harmless, on an after-tax basis, from
    any Excise Tax or income tax (including interest or penalties with respect
    thereto) imposed with respect to such advance or with respect to any imputed
    income with respect to such advance; and provided further that any extension
    of the statute of limitations relating to payment of taxes for MADDON’s
    taxable year with respect to which such contested amount is claimed to be
    due is limited solely to such contested amount. Furthermore, the Corporation’s
    control of the contest shall be limited to issues with respect to which a
    Gross-Up Payment would be payable hereunder and MADDON shall be entitled
    to settle or contest, as the case may be, any other issue raised by the Internal
    Revenue Service or any other taxing authority, so long as such action does
    not have a material adverse effect on the contest being pursued by the Corporation.

 

 

 

-24-

 

 

(d)     If, after the receipt
  by MADDON of an amount advanced by the Corporation pursuant to this Section
  8.6, MADDON becomes entitled to receive, and receives, any refund with respect
  to such claim (including by reason of a redetermination of the value of any
  accelerated vesting of stock options held by MADDON pursuant to Treasury Reg.
  Section 1.280G-1 Q/A 33), MADDON shall (subject to the Corporation’s
  complying with the requirements of this Section 8.6), promptly pay to the Corporation
  the amount of such refund (together with any interest paid or credited thereon
  after taxes applicable thereto). If, after the receipt by MADDON of an amount
  advanced by the Corporation pursuant to this Section 8.6, a determination is
  made that MADDON shall not be entitled to any refund with respect to such claim
  and the Corporation does not notify MADDON in writing of its intent to contest
  such denial of refund prior to the expiration of thirty (30) days after such
  determination, then such advance shall be forgiven and shall not be required
  to be repaid and the amount of such advance shall offset, to the extent thereof,
  the amount of Gross-Up Payment required to be paid.
  
(e)     The respective
        obligations and rights of the Corporation and MADDON under this Section
        8.6 shall survive any termination of MADDON’s employment and the
        termination of this 2003 Agreement.

 

-25-

 

 

9.      COVENANT
      NOT TO COMPETE AND NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
  
9.1      During or
        after the Term of this 2003 Agreement and/or MADDON’s employment
        by the Corporation, MADDON shall not without the Corporation’s prior
        written consent use or disclose any “Proprietary Information” (as
        defined in Section 10.1.1) or any other confidential information
        relat­ing to the Corporation (including, but not limited to, data
        on which patents have been applied for or issued or other proprietary
        intellectual property, customer lists, finan­cial information, sales
        and marketing data), or its business, obtained during the course of his
        employment.

    9.2      MADDON shall
        not during the Term hereof and for a period of one (1) year after the
        expiration or earlier termination of the Term, directly or indirectly,
        own, manage, operate, or control, any business in competi­tion with
        or substantially similar to the type of business conducted by the Corporation,
        and will not render services, directly or indirectly, to any “Conflicting
        Organization” (as herein­after defined), provided, however,
        that the period shall only run for six (6) months (not one year) if the
        termination of employment occurs within two (2) years after, or three
        (3) months before, a Change in Control. The foregoing shall not apply
        to the ownership by MADDON of less than One percent (1%) of the securities
        of a publicly traded organization. “Conflicting Organization” means
        any person or organization engaged in or about to become engaged in servicing,
        production, marketing or selling of, a “Conflicting Product” (as
        hereinafter defined); provided, however, the foregoing shall not prohibit
        MADDON from working for a division or other business unit of an organization
        involved with a Conflicting Product provided such division or business
        unit is not itself involved with a Conflicting Product. “Conflicting
        Product” means any product, process, or service, in existence or
        under development, of any person or organization other than the Corporation
        that is substantially similar to or competes with a product, process,
        or service of the Corporation, in existence or under development at the
        time of termination. In the event that (i) the Corporation terminates
        MADDON’s employment under this Agreement without Good Cause during
        the term hereof, (ii) MADDON terminates his employment for Good Reason,
        or (iii) there is a Specified Non-Renewal, MADDON’s obligation
        under the foregoing with respect to non-competition with the Corporation
        for a period of one (1) year after such termination shall no longer be
applicable. 

 

-26-

 

 

9.3      During and for
  a period of one (1) year after the Term of this 2003 Agreement and/or MADDON’s
  employment by the Corporation, MADDON shall not solicit or induce any employees
  of the Corporation to leave the Corporation to work for any entity or person
  engaged in the same business as the Corporation, either directly or indirectly.
  
10.      PROPRIETARY
              INFORMATION.

      10.1      MADDON
          understands that the Corporation possesses and will continue to possess “Proprietary
          Information” (as defined below) and/or “Inventions” (as
          defined below) that have been created, discovered, or developed, or
          have otherwise become known to the Corporation.

 

-27-

 

 

	 	
        10.1.1      For
            purposes of this Agreement, particularly for this Section 10, “Proprietary
            Information” shall include, but not be limited to, trade secrets,
            processes, formulae, data and know-how, improvements, “Inventions” (as
            defined below), techniques, marketing plans, strategies, forecasts
            and customer lists, including without limitation, information created,
            discovered, developed or made known by MADDON and within the scope
            of this 2003 Agreement or to MADDON during the period of or arising
            out of his retention by the Corporation, and/or in which property
            rights have been assigned or otherwise conveyed to the Corporation,
            which information has commercial value in the business in which the
            Corporation is engaged. “Proprietary Information” shall
            not include information that is now known by or is or becomes available
            to the public or otherwise is or becomes generally known in the trade
            or industry, other than through the breach of this 2003 Agreement
        by MADDON. 

        10.1.2      For
            purposes of this 2003 Agreement, particularly for this Section 10, “Inventions” shall
            mean any improvements, inventions, formulae, processes, tech­niques,
            know-how and data, whether or not patentable, made or conceived or
            reduced to practice or learned by MADDON, either alone or jointly
            with others, during the period of his employment (whether or not
            during normal working hours), together with all patent applications,
            patents, copyrights and reissues thereof that may at any time be
            granted for or upon any such improvements, inventions, formulae,
            processes, techniques, know-how or data, and/or during the twelve
            (12) months immediately following termination of his employment which:

    
	 	 	 

 

 

 

-28-

 

 

	 	 	
      
a.      are within
          the scope of the duties to be performed by MADDON under this 2003 Agreement
          and are related to or useful in the business of the Corporation, or

      b.      result
          from tasks assigned to MADDON by the Corporation, or

      c.      are funded
          by the Corporation, or

      d.      result
          from use of premises owned, leased or contracted for by the Corporation.

    

    
	 	 	 

	 	10.2      In
            consideration of his employment by the Corporation and the compensation
        received by MADDON from the Corporation, MADDON agrees as follows:

    
	 	
	 	
        10.2.1      All
            Proprietary Information including, but not limited to, all “Inventions” as
            defined above, shall be the sole property of the Corporation and
            its assigns and MADDON assigns to the Corporation any rights he may
            have or acquire in all Proprietary Information.

        10.2.2      All
            documents, data, records, apparatus, equipment, and other physical
            property, whether or not pertaining to Proprietary Information, furnished
            to MADDON by the Corporation or produced by MADDON or others in connection
            with his employment, shall be and remain the sole property of the
            Corporation and shall be returned promptly to the Corporation as
            and when requested by the Corporation. At the Corporation’s
            request, MADDON shall return and deliver all such property upon termination
            of his employment with the Corporation for any reason and MADDON
            will not take with him any such property or any reproduction of such
            property upon such termination but this shall not apply to MADDON’s
            personal diaries and papers provided same do not contain information
            relating to Proprietary Information or Inventions.

    
	 	 	 

 

 

-29-

  

	 	
        10.2.3      MADDON
            will promptly disclose all Inventions to the Corporation, or any
            persons designated by it. Such disclosures shall continue for one
            (1) year after termination of this 2003 Agreement with respect to
            anything that would be an Invention if made, conceived, reduced to
        practice or learned during the Term. 

        10.2.4      The
            Inventions shall become and remain the property of the Corporation,
            whether or not patent applications are filed thereon. Upon request
            and at the expense of the Corporation, MADDON shall make application
            through the patent attorneys or agents of the Corporation for letters
            patent of the United States and any and all other countries at the
            reasonable discretion of the Corporation on the Inventions and to
            assign all such applications to the Corporation or its order immediately,
            all without additional payment, during MADDON’s period of employment
            by the Corporation and for one year after the termination of employment.
            MADDON shall give the Corporation, its attorneys and agents all reasonable
            assistance in preparing and prosecuting such applications and, on
            request of the Corporation, MADDON shall execute all papers and do
            all things, at the Corporation’s sole expense, that may be
            reasonably necessary to protect the rights of the Corporation and
            vest in it or its assigns the inventions, applications, and letters
            patent herein contemplated.

    
	 	 	 

-30-

 

 

11.      RETURN OF
      DOCUMENTS.
  
On the expiration or earlier termination of
        the Term or MADDON’s resignation, discharge or earlier departure
        from the Corporation, MADDON shall promptly surrender to the Corporation
        all of the Corporation’s books, records, documents and customer
        lists and/or other of the Corporation’s materials or records he
        may have in his possession, including but not limited to the materials
        described in Section 10.2.2.

    12.      INDEMNIFICATION
          AND INSURANCE.

    The Corporation shall provide MADDON with
        the same indemnification provisions and directors and officers insurance
        as that which is provided to other directors and senior executives of
        the Corporation. Notwithstanding anything in this 2003 Agreement to the
        contrary, the Indemnification Agreement entered into between the Corporation
        and MADDON dated as of June 1, 1995 shall remain in full force and effect. 

    13.      REMEDIES.

    13.1      MADDON
        agrees that his services are of a special, unique and extraordinary character,
        that it would be extremely difficult to replace such services, and that,
        in the event of a breach or threatened breach of any of the pro­visions
        of this 2003 Agreement, the Corporation will not have an adequate remedy
        at law. Accordingly, the Corporation shall be entitled to enforce such
        provisions by means of injunctive relief as may be available to restrain
        MADDON and any business, firm, partnership, individual, corpora­tion
        or entity participating in such breach or threatened breach from the
        violation of the provisions hereof, without thereby waiving any other
        legal or equitable remedies available to the Corporation. Likewise, MADDON
        shall be entitled to enforce the provisions of this Agreement by means
        of injunctive relief as may be available to restrain the Corporation
        from the violation or threatened violation of the provisions hereof,
        without thereby waiving any other legal or equitable remedies available
        to him.

-31-

 

 

  
13.2      If
      any of the covenants contained in this Agreement or any part thereof is
      held to be unenforceable because of the duration thereof or the area or
      scope
      covered thereby, the parties hereby agree that the court making such determination
      shall have the power to reduce the duration, area and/or scope of such
      covenant so that in its reduced form, the covenant shall be enforceable. 

14.      TRANSFER
      AND ASSIGNMENT.
  
This 2003 Agreement shall be binding upon
        and inure to the benefit of (i) MADDON, his legal representatives, heirs,
        and distributees, and (ii) the Corporation, its successors, affiliates
        and assigns. The term “Corporation” as used in this 2003 Agreement
        will include all such successors, affiliates and assigns.

    15.      MODIFICATIONS.

    This 2003 Agreement (including the option
        agreements and Indemnification Agreement referenced herein) contains
        the entire agreement of the Parties and the Parties have made no other
        agreements, representations or warranties relating to the subject matter
        of this 2003 Agreement. No modification, amendment or waiver of all or
        any part of this 2003 Agreement will be valid unless made in writing
and signed by the Parties.

 

-32-

 

 

16.      NOTICES.
  
Any notices required or permitted to be given
        under this Agreement must be in writing, by certified mail, return receipt
        requested to the Parties, at the addresses given herein.

    17.      ADVERSE
            PUBLIC STATEMENTS AND DISCLOSURES.

    The Parties hereto agree that at no time during
        or subsequent to the Term of this Agreement will either party directly
        or indirectly make or facilitate the making of any adverse public statements
        or disclosures with respect to the other (including, with respect to
        the Corporation, regarding its business or securities or its Board, management
        or other personnel), except such truthful statements as may be required
        pursuant to statute, legal proceeding or other enforcement or regulatory
        proceeding, process or requirement.

    18.      WAIVER
            AND BREACH.

    The waiver or breach of any term or condition
        of this 2003 Agreement will not be deemed to constitute the waiver of
any other breach of the same or any other term or condition.

 

-33-

 

 

19.      GOVERNING
      LAW AND JURY TRIAL WAIVER.
  
This Agreement shall be governed by and construed
        in accordance with the laws of the State of New York applicable
        to contracts made and to be performed entirely within that State. The
        Parties agree that the courts of the State of New York shall have exclusive
        jurisdiction of all actions arising out of or relating in any way to
        this 2003 Agreement or any breach thereof, agree to waive trial by jury
        and expressly consent to personal jurisdiction in the courts of the State
        of New York.

    20.      SEVERABILITY.

    In the event
        that any provision or portion of this 2003 Agreement shall be determined
        to be invalid or unenforceable for any reason, in whole or in part, the
        remaining provisions of this 2003 Agreement shall be unaffected thereby
        and shall remain in full force and effect to the fullest extent permissible
        by law and in accordance with the original intent of the Parties. 

-34-

 

21.      EMPLOYMENT
      AGREEMENT DATED AS OF DECEMBER 22, 1998 SUPERSEDED.
  
Effective as of July 1, 2003, this 2003 Agreement
      supersedes the Employment Agreement between MADDON and the Corporation
      dated as of December 22, 1998, which superseded the Employment Agreement
      between MADDON and the Corporation dated as of December 15, 1993.

  

  PROGENICS PHARMACEUTICALS, INC.

        

        

        

  By: /s/Robert A. McKinney

        Vice President,
  Finance &

          Administration

    

    

    

    /s/Paul J. Maddon                

    PAUL J. MADDON

-35-<PAGE>
                                                                    EXHIBIT 4.23

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

                        AMENDED AND RESTATED DECLARATION
                                    OF TRUST

                                  by and among

                         U.S. BANK NATIONAL ASSOCIATION,
                            as Institutional Trustee,

                                PXRE GROUP LTD.,
                                   as Sponsor,

                                       and
                   JOHN MODIN, BRUCE BYRNES AND JEFF JEFFREYS,
                               as Administrators,

                          Dated as of October 29, 2003

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

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                                            <C>

                                                                                                               Page

ARTICLE I.           INTERPRETATION AND DEFINITIONS..............................................................1
         Section 1.1.      Definitions...........................................................................1

ARTICLE II.          ORGANIZATION................................................................................8
         Section 2.1.      Name..................................................................................8
         Section 2.2.      Office................................................................................8
         Section 2.3.      Purpose...............................................................................9
         Section 2.4.      Authority.............................................................................9
         Section 2.5.      Title to Property of the Trust........................................................9
         Section 2.6.      Powers and Duties of the Institutional Trustee and the Administrators.................9
         Section 2.7.      Prohibition of Actions by the Trust and the Institutional Trustee....................13
         Section 2.8.      Powers and Duties of the Institutional Trustee.......................................14
         Section 2.9.      Certain Duties and Responsibilities of the Institutional Trustee and
                           Administrators.......................................................................15
         Section 2.10.     Certain Rights of Institutional Trustee..............................................17
         Section 2.11.     Execution of Documents...............................................................19
         Section 2.12.     Not Responsible for Recitals or Issuance of Securities...............................19
         Section 2.13.     Duration of Trust....................................................................20
         Section 2.14.     Mergers..............................................................................20

ARTICLE III.         SPONSOR....................................................................................21
         Section 3.1.      Sponsor's Purchase of Common Securities..............................................21
         Section 3.2.      Responsibilities of the Sponsor......................................................21
         Section 3.3.      Expenses.............................................................................22
         Section 3.4.      Right to Proceed.....................................................................22

ARTICLE IV.          INSTITUTIONAL TRUSTEE AND ADMINISTRATORS...................................................23
         Section 4.1.      Institutional Trustee; Eligibility...................................................23
         Section 4.2.      Administrators.......................................................................23
         Section 4.3.      Appointment, Removal and Resignation of Institutional Trustee and
                           Administrators.......................................................................23
         Section 4.4.      Institutional Trustee Vacancies......................................................25
         Section 4.5.      Effect of Vacancies..................................................................25
         Section 4.6.      Meetings of the Institutional Trustee and the Administrators.........................25
         Section 4.7.      Delegation of Power..................................................................26
         Section 4.8.      Conversion, Consolidation or Succession to Business..................................26

ARTICLE V.           DISTRIBUTIONS..............................................................................26
         Section 5.1.      Distributions........................................................................26

ARTICLE VI.          ISSUANCE OF SECURITIES.....................................................................26
         Section 6.1.      General Provisions Regarding Securities..............................................26
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                            <C>

         Section 6.2.      Paying Agent, Transfer Agent and Registrar...........................................27
         Section 6.3.      Form and Dating......................................................................28
         Section 6.4.      Mutilated, Destroyed, Lost or Stolen Certificates....................................28
         Section 6.5.      Temporary Securities.................................................................29
         Section 6.6.      Cancellation.........................................................................29
         Section 6.7.      Rights of Holders; Waivers of Past Defaults..........................................29

ARTICLE VII.         DISSOLUTION AND TERMINATION OF TRUST.......................................................31
         Section 7.1.      Dissolution and Termination of Trust.................................................31

ARTICLE VIII.        TRANSFER OF INTERESTS......................................................................32
         Section 8.1.      General..............................................................................32
         Section 8.2.      Transfer Procedures and Restrictions.................................................33
         Section 8.3.      Deemed Security Holders..............................................................35

ARTICLE IX.          LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS..........36
         Section 9.1.      Liability............................................................................36
         Section 9.2.      Exculpation..........................................................................36
         Section 9.3.      Fiduciary Duty.......................................................................36
         Section 9.4.      Indemnification......................................................................37
         Section 9.5.      Outside Businesses...................................................................39
         Section 9.6.      Compensation; Fee....................................................................40

ARTICLE X.           TAX AND ACCOUNTING.........................................................................40
         Section 10.1.     Fiscal Year..........................................................................40
         Section 10.2.     Certain Accounting Matters...........................................................40
         Section 10.3.     Banking..............................................................................41
         Section 10.4.     Withholding..........................................................................41
         Section 10.5.     Intention of the Parties.............................................................41

ARTICLE XI.          AMENDMENTS AND MEETINGS....................................................................41
         Section 11.1.     Amendments...........................................................................41
         Section 11.2.     Meetings of the Holders of Securities; Action by Written Consent.....................43

ARTICLE XII.         REPRESENTATIONS OF INSTITUTIONAL TRUSTEE...................................................44
         Section 12.1.     Representations and Warranties of Institutional Trustee..............................44

ARTICLE XIII.        MISCELLANEOUS..............................................................................45
         Section 13.1.     Notices..............................................................................45
         Section 13.2.     Governing Law........................................................................46
         Section 13.3.     Intention of the Parties.............................................................46
         Section 13.4.     Headings.............................................................................47
         Section 13.5.     Successors and Assigns...............................................................47
         Section 13.6.     Partial Enforceability...............................................................47
         Section 13.7.     Counterparts.........................................................................47
</TABLE>

                                       ii
<PAGE>

Annex I  Terms of Securities
Exhibit A-1................Form of Capital Security Certificate
Exhibit A-2................Form of Common Security Certificate
Exhibit B..................Specimen of Initial Debenture
Exhibit C..................Placement Agreement

                                      iii
<PAGE>

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                         PXRE CAPITAL STATUTORY TRUST V

                                October 29, 2003

         AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of October 29, 2003, by the Institutional Trustee (as defined
herein), the Administrators (as defined herein), the Sponsor (as defined herein)
and by the holders, from time to time, of undivided beneficial interests in the
Trust (as defined herein) to be issued pursuant to this Declaration;

         WHEREAS, the Institutional Trustee, the Administrators and the Sponsor
established PXRE Capital Statutory Trust V (the "Trust"), a statutory trust
under the Statutory Trust Act (as defined herein) pursuant to a Declaration of
Trust dated as of October 10, 2003 (the "Original Declaration"), and a
Certificate of Trust filed with the Secretary of the State of the State of
Connecticut on October 10, 2003, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in certain debentures of the
Debenture Issuer (as defined herein);

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

         WHEREAS, the Institutional Trustee, 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,
the Institutional Trustee declares that all assets contributed to the Trust will
be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration. The
parties hereto hereby 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 have the respective meanings assigned to them in this Section
1.1;

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

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

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

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

         "Additional Interest" has the meaning set forth in the Indenture.

         "Additional Sums" has the meaning set forth in the Indenture.

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

         "Administrators" means each of John Modin, Bruce Byrnes and Jeff
Jeffreys, solely in such Person's capacity as Administrator of the Trust created
and continued hereunder and not in such Person's individual capacity, or such
Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.

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

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

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

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

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

         "Business Day" means any day other than Saturday, Sunday or any other
day on which banking institutions in New York City or Hartford, Connecticut are
permitted or required by any applicable law to close.

         "Capital Securities" has the meaning set forth in paragraph 1(a) of
Annex I.

                                       2
<PAGE>

         "Capital Security Certificate" means a definitive Certificate in fully
registered form representing a Capital Security substantially in the form of
Exhibit A-1.

         "Certificate" means any certificate evidencing Securities.

         "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.

         "Common Securities" has the meaning set forth in paragraph 1(b) of
Annex I.

         "Common Security Certificate" means a definitive Certificate in fully
registered form 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, custodians, nominees or agents of
any Administrator; or (d) any officer, employee or agent of the Trust or its
Affiliates.

         "Comparable Treasury Issue" has the meaning set forth in paragraph 4(a)
of Annex I.

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

         "Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103.

         "Coupon Rate" has the meaning set forth in paragraph 2(a) of Annex I.

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

         "Creditor" has the meaning set forth in Section 3.3.

         "Debenture Issuer" means PXRE Group Ltd., a Bermuda company, in its
capacity as issuer of the Debentures under the Indenture.

         "Debenture Trustee" means U.S. Bank National Association, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.

         "Debentures" means the Fixed/Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2033, Series D to be issued by the Debenture
Issuer under the Indenture.

         "Defaulted Interest" has the meaning set forth in the Indenture.

         "Determination Date" has the meaning set forth in paragraph 2(a) of
Annex I.

                                       3
<PAGE>

         "Direct Action" has the meaning set forth in Section 2.8(d).

         "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(b)
of Annex I.

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

         "Distribution Rate" means, for the period beginning on (and including)
the date of original issuance and ending on (but excluding) October 29, 2008 the
rate per annum of 7.70%, and for the period beginning on (and including),
October 29, 2008 and thereafter, the Coupon Rate.

         "Event of Default" means any one of the following events (whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):

         (a) the occurrence of an Indenture Event of Default; or

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

         (c) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Institutional Trustee in this Declaration (other
than those specified in clause (a) or (b) above) and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail to the Institutional Trustee and to the Sponsor by
the Holders of at least 25% in aggregate liquidation amount of the outstanding
Capital Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or

         (d) the occurrence of a Bankruptcy Event with respect to the
Institutional Trustee if a successor Institutional Trustee has not been
appointed within 90 days thereof.

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

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

         "Fiscal Year" has the meaning set forth in Section 10.1.

         "Fixed Rate Period Remaining Life" has the meaning set forth in
paragraph 4(a) of Annex I.

         "Guarantee" means the guarantee agreement, to be dated as of the
Closing Date, of the Sponsor in respect of the Capital Securities.

                                       4
<PAGE>

         "Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the 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, as such Indenture and
any supplemental indenture may be amended, supplemented or otherwise modified
from time to time.

         "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 4.1.

         "Interest" means any interest due on the Debentures including any
Additional Interest and Defaulted Interest.

         "Interest Rate" has the meaning set forth in paragraph 2(a) of Annex I.

         "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.

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

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

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

         "Maturity Date" has the meaning set forth in paragraph 2(a) of Annex I.

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

                                       5
<PAGE>

         (a) a statement that each individual 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 individual in rendering the Officers'
Certificate;

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

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

         "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 specified in Section 6.2.

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

         "Placement Agreement" means the Placement Agreement relating to the
offering and sale of Capital Securities in the form of Exhibit C.

         "Primary Treasury Dealer" has the meaning set forth in paragraph 4(a)
of Annex I.

         "Property Account" has the meaning set forth in Section 2.8(c).

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

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

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

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

         "Reference Treasury Dealer" has the meaning set forth in paragraph 4(a)
of Annex I.

         "Reference Treasury Dealer Quotations" has the meaning set forth in
paragraph 4(a) of Annex I.

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

                                       6
<PAGE>

         "Reference Treasury Dealer Quotations" has the meaning set forth in
paragraph 4(a) of Annex I.

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

         "Restricted Securities Legend" has the meaning set forth in Section
8.2(b).

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

         "Rule 3a-7" means Rule 3a-7 under the Investment Company Act.

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

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

         "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 PXRE Group Ltd., a Bermuda company, or any successor
entity in a merger, consolidation or amalgamation, in its capacity as sponsor of
the Trust.

         "Statutory Trust Act" means Chapter 615 of Title 34 of the Connecticut
General Statutes, Sections 500, et seq. as may be amended from time to time.

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

         "Successor Entity" has the meaning set forth in Section 2.14(c).

                                       7
<PAGE>

         "Successor Institutional Trustee" has the meaning set forth in Section
4.3(a).

         "Successor Securities" has the meaning set forth in Section 2.14(c).

         "Super Majority" has the meaning set forth in paragraph 5(b) of Annex
I.

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

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

         "3-Month LIBOR" has the meaning set forth in paragraph 2(a) of Annex I.

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

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

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

         "Trust 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.

         "Trust Securities" has the meaning set forth in the Indenture.

         "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 "PXRE Capital Statutory Trust V,"
as such name may be modified from time to time by the Administrators following
written notice to 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
is c/o U.S. Bank National Association, 225 Asylum Street, Goodwin Square,
Hartford, Connecticut 06103. On at least 10 Business Days written notice to the
Holders of the Securities, the Administrators may designate another principal
office, which shall be in a state of the United States or in the District of
Columbia.

                                       8
<PAGE>

         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 to acquire the Debentures, (c) to facilitate direct investment in the
assets of the Trust through issuance of the Common Securities and the Capital
Securities and (d) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.

         Section 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 the
Institutional Trustee in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Institutional Trustee acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Institutional Trustee to bind the Trust. Persons dealing with the Trust
are entitled to rely conclusively on the power and authority of the
Institutional Trustee as set forth in this Declaration. The Administrators shall
have only those ministerial duties set forth herein with respect to
accomplishing the purposes of the Trust and are not intended to be trustees or
fiduciaries with respect to the Trust or the Holders. The Institutional Trustee
shall have the right, but shall not be obligated except as provided in Section
2.6, to perform those duties assigned to the Administrators.

         Section 2.5. Title to Property of the Trust. Except as provided in
Section 2.8 with respect to the Debentures and the Property Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.

         Section 2.6. Powers and Duties of the Institutional Trustee and the
Administrators.

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

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

                  (A)      the issuance and sale of the Securities;

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

                  (C)      ensuring compliance with the Securities Act and
                           applicable state securities or blue sky laws;

                  (D)      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;

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

                  (F)      execution and delivery of the Securities in
                           accordance with this Declaration;

                  (G)      execution and delivery of closing certificates
                           pursuant to the Placement Agreement and the
                           application for a taxpayer identification number;

                                       9
<PAGE>

                  (H)      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;

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

                  (J)      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; and

                  (K)      to duly prepare and file all applicable tax returns
                           and tax information reports that are required to be
                           filed with respect to the Trust on behalf of the
                           Trust.

                                       10
<PAGE>

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

                  (A)      the establishment of the Property Account;

                  (B)      the receipt of the Debentures;

                  (C)      the collection of interest, principal and 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
                           the State of the State of Connecticut;

                  (I)      after any Event of Default (provided that such Event
                           of Default is not by or with respect to the
                           Institutional Trustee) the taking of any action
                           incidental to the foregoing as the Institutional
                           Trustee may from time to time determine is necessary
                           or advisable to give effect to the terms of this
                           Declaration and protect and conserve the Trust
                           Property for the benefit of the Holders (without
                           consideration of the effect of any such action on any
                           particular Holder); and

                  (J)      to take all action that may be necessary 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
                           Connecticut and of each other jurisdiction 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.

                  (iii) The Institutional Trustee shall have the power and
         authority to act on behalf of the Trust with respect to any of the
         duties, liabilities, powers or the authority of the Administrators set
         forth in Section 2.6(a)(i)(D), (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.

                                       11
<PAGE>

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

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

                  (i) the taking of any action necessary to obtain an exemption
         from the Securities Act;

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

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

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

                                       12
<PAGE>

         (d) Notwithstanding anything herein to the contrary, the Administrators
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 the Trust will not (i) be deemed to be an Investment Company
required to be registered under the Investment Company Act, and (ii) fail to be
classified as a "grantor trust" for United States federal income tax purposes.
The Administrators and the Holders of a Majority in liquidation amount of the
Common Securities shall 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 this connection, 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, the Certificate of Trust or
this Declaration, as amended from time to time, that each of the Administrators
and the Holders of a Majority in liquidation amount of the Common Securities
determines in their discretion to be necessary or desirable for such purposes.

         (e) All expenses incurred by the Administrators or the Institutional
Trustee pursuant to this Section 2.6 shall be reimbursed by the Sponsor, and the
Institutional Trustee and the Administrators 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 and the Administrators for the benefit
of the Trust in accordance with this Declaration.

         (h) If the Institutional Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Declaration and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Institutional Trustee or to such Holder, then and in
every such case the Sponsor, the Institutional Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Institutional Trustee and the Holders shall continue as though
no such proceeding had been instituted.

         Section 2.7. Prohibition of Actions by the Trust and the Institutional
Trustee.

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

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

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

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

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

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

                                       13
<PAGE>

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

                  (vii) carry on any "trade or business" as that phrase is used
         in the Code; or

                  (viii) other than as provided in this Declaration (including
         Annex I), (A) direct the time, method and place of exercising any trust
         or power conferred upon the Debenture Trustee with respect to the
         Debentures, (B) waive any past default that is waivable under the
         Indenture, (C) exercise any right to rescind or annul any declaration
         that the principal of all the Debentures shall be due and payable, or
         (D) consent to any amendment, modification or termination of the
         Indenture or the Debentures where such consent shall be required unless
         the Trust shall have received a written opinion of counsel to the
         effect that such modification 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 and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 4.3. 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.

         (c) The Institutional Trustee shall:

                  (i) establish and maintain a segregated non-interest bearing
         trust account (the "Property Account") in the name of and under the
         exclusive control of the Institutional Trustee, 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, or cause the
         Paying Agent to make payments, to the Holders of the Capital Securities
         and Holders of the Common Securities from the Property Account in
         accordance with Section 5.1. Funds in the Property Account shall be
         held uninvested until disbursed in accordance with this Declaration;

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

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

                                       14
<PAGE>

         (d) 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 that arise out of or in
connection with an Event of Default of which a Responsible Officer of the
Institutional Trustee has actual knowledge or arises out of the Institutional
Trustee's duties and obligations under this Declaration; provided, however, that
if an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of the
Capital Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Capital
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Holders of the Common Securities will be subrogated to the rights
of such Holder of the Capital Securities to the extent of any payment made by
the Debenture Issuer to such Holder of the Capital Securities in such Direct
Action; provided, however, that no Holder of the Common Securities may exercise
such right of subrogation so long as an Event of Default with respect to the
Capital Securities has occurred and is continuing.

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

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

                  (ii) a Successor Institutional Trustee has been appointed and
         has accepted that appointment in accordance with Section 4.3.

         (f) 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.

         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 Institutional
Trustee and Administrators.

         (a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all such Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 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.

                                       15
<PAGE>

         (b) The duties and responsibilities of the Institutional Trustee and
the Administrators shall be as provided by this Declaration. Notwithstanding the
foregoing, no provision of this Declaration shall require the Institutional
Trustee or Administrators to expend or risk their own funds or otherwise incur
any financial liability in the performance of any of their duties hereunder, or
in the exercise of any of their rights or powers if the Institutional Trustee or
such Administrator shall have reasonable grounds to believe that repayment of
such funds or adequate protection against such risk of liability is not
reasonably assured to the Institutional Trustee or such Administrator. 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 Institutional Trustee or Administrators shall be subject to the provisions
of this Article. Nothing in this Declaration shall be construed to relieve an
Administrator or the Institutional Trustee from liability for the Institutional
Trustee's or such Administrator's own negligent act, the Institutional Trustee's
or such Administrator's own negligent failure to act, or the Institutional
Trustee's or such Administrator's own willful misconduct. To the extent that, at
law or in equity, the Institutional Trustee or an Administrator has duties and
liabilities relating to the Trust or to the Holders, the Institutional Trustee
or such Administrator shall not be liable to the Trust or to any Holder for the
Institutional Trustee's or such 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 Institutional Trustee 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 Institutional Trustee.

         (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 Institutional Trustee 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 Institutional Trustee
expressly set forth elsewhere in this Declaration.

         (d) The Institutional Trustee shall not be liable for its own acts or
omissions hereunder except as a result of its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

                  (i) the Institutional Trustee shall not be liable for any
         error of 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;

                                       16
<PAGE>

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

                  (iii) the Institutional Trustee's sole duty with respect to
         the custody, safekeeping 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 fiduciary accounts generally, subject to the protections and
         limitations on liability afforded to the Institutional Trustee under
         this Declaration;

                  (iv) the Institutional Trustee shall not be liable for any
         interest on any money received by it except as it may otherwise agree
         in writing with the Sponsor; and money held by the Institutional
         Trustee need not be segregated from other funds held by it except in
         relation to the Property Account maintained by the Institutional
         Trustee pursuant to Section 2.8(c)(i) and except to the extent
         otherwise required by law; and

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

         Section 2.10. Certain Rights of Institutional Trustee. Subject to the
provisions of Section 2.9:

         (a) the Institutional Trustee may conclusively rely and shall fully be
protected in acting, or refraining from acting, in good faith upon any
resolution, 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 written instructions 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 shall be instructed in
writing, in which event the Institutional Trustee shall have no liability except
for its own negligence or willful misconduct;

                                       17
<PAGE>

         (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 request and conclusively rely upon an Officers' Certificate as to factual
matters 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 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, subject to Section 2.9(b), upon the occurrence of an
Event of Default (that has not been cured or waived pursuant to Section 6.7), of
the duty to exercise such rights and powers vested in it by this Declaration,
and to use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs;

         (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
Capital Securities which instructions may only be given by the Holders of the
same proportion in liquidation amount of the Capital Securities as would be
entitled to direct the Institutional Trustee under the terms of 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;

                                       18
<PAGE>

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

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

         (m) the Institutional Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer of the Institutional Trustee
obtains actual knowledge of such event or the Institutional Trustee receives
written notice of such event from any Holder, the Sponsor or the Debenture
Trustee;

         (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. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.

         Section 2.11. 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 on behalf of the
Trust any documents that the Institutional Trustee or the Administrators, as the
case may be, have the power and authority to execute pursuant to Section 2.6.

         Section 2.12. 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 Institutional Trustee does not assume any
responsibility for their correctness. The Institutional Trustee makes no
representations as to the value or condition of the property of the Trust or any
part thereof. The Institutional Trustee makes no representations as to the
validity or sufficiency of this Declaration, the Debentures or the Securities.

                                       19
<PAGE>

         Section 2.13. Duration of Trust. The Trust, unless earlier dissolved
pursuant to the provisions of Article VII hereof, shall be in existence for 35
years from the Closing Date.

         Section 2.14. Mergers.

         (a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Sections 2.14(b) and (c) and except in connection with the
liquidation of the Trust and the distribution of the Debentures to Holders of
Securities pursuant to Section 7.1(a)(iv) of the Declaration or Section 4 of
Annex I.

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

         (c) if the Trust is not the surviving entity, 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 a trustee of the Successor
         Entity that possesses substantially the same powers and duties as the
         Institutional Trustee as the Holder of the Debentures;

                  (iii) such merger, consolidation, amalgamation or replacement
         does not adversely affect the rights, preferences and privileges of the
         Holders of the Securities (including any Successor Securities) in any
         material respect;

                  (iv) the Institutional Trustee receives written confirmation
         from a nationally recognized statistical rating organization that rates
         securities issued by the initial purchaser of the Capital Securities
         that it will not reduce or withdraw the rating of any such securities
         because of such merger, conversion, consolidation, amalgamation or
         replacement;

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

                                       20
<PAGE>

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

                           (A) such merger, consolidation, amalgamation or
                  replacement does not adversely affect the rights, preferences
                  and privileges of the Holders of the Securities (including any
                  Successor Securities) in any material respect;

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

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

                  (vii) the Sponsor guarantees the obligations of such Successor
         Entity under the Successor Securities at least to the extent provided
         by the Guarantee;

                  (viii) the Sponsor owns 100% of the common securities of any
         Successor Entity; and

                  (ix) prior to such merger, consolidation, amalgamation or
         replacement, 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 under this Section 2.14(c) to
         such transaction have been satisfied.

         (d) Notwithstanding Section 2.14(c), the Trust shall not, except with
the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.

                                  ARTICLE III.

                                     SPONSOR

         Section 3.1. Sponsor's Purchase of Common Securities. On the Closing
Date, the Sponsor will purchase all of the Common Securities issued by the Trust
in an amount at least equal to 3% of the capital of the Trust, at the same time
as the Capital Securities are sold.

         Section 3.2. Responsibilities of the Sponsor. In connection with the
issue and sale of the Capital Securities, the Sponsor shall have the exclusive
right and responsibility to engage in, or direct the Administrators to engage
in, the following activities:

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

                                       21
<PAGE>

         (b) to negotiate the terms of and/or execute on behalf of the Trust,
the Placement Agreement and other related agreements providing for the sale of
the Capital Securities.

         Section 3.3. Expenses. In connection with the offering, sale and
issuance of the Debentures to the Trust and in connection with the sale of the
Securities by the Trust, the Sponsor, in its capacity as Debenture Issuer,
shall:

         (a) pay all reasonable costs and expenses relating to the offering,
sale and issuance of the Debentures, including compensation of the Debenture
Trustee under the Indenture in accordance with the provisions of the Indenture;

         (b) be responsible for and shall pay all debts and obligations (other
than with respect to the Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the organization,
maintenance and dissolution of the Trust), the offering, sale and issuance of
the Securities (including reasonable fees to the placement agents in connection
therewith), the reasonable fees and expenses (including reasonable counsel fees
and expenses) of the Institutional Trustee and the Administrators, the costs and
expenses relating to the operation of the Trust, including, without limitation,
reasonable costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, Paying Agents, Registrars, Transfer Agents, duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and disposition
of Trust assets and the enforcement by the Institutional Trustee of the rights
of the Holders; and

         (c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.

         The Sponsor's obligations under this Section 3.3 shall be for the
benefit of, and shall be enforceable by, any Person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 3.3 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 3.3.

         Section 3.4. Right to Proceed. The Sponsor acknowledges the rights of
Holders of Capital Securities to institute a Direct Action as set forth in
Section 2.8(d) hereto.

                                       22
<PAGE>

                                  ARTICLE IV.

                    INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

         Section 4.1. Institutional Trustee; Eligibility.

         (a) There shall at all times be one 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 trust company organized and
         doing business under the laws of the United States of America or any
         state thereof or the District of Columbia, authorized under such laws
         to exercise corporate trust powers, having a combined capital and
         surplus of at least 50 million U.S. dollars ($50,000,000.00), and
         subject to supervision or examination by Federal, state, or District of
         Columbia authority. If such corporation publishes reports of condition
         at least annually, pursuant to law or to the requirements of the
         supervising or examining authority referred to above, then for the
         purposes of this Section 4.1(a(iii), the combined capital and surplus
         of such corporation shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published.

         (b) If at any time the Institutional Trustee shall cease to be eligible
to so act under Section 4.1(a), the Institutional Trustee shall immediately
resign in the manner and with the effect set forth in Section 4.3(a).

         (c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act of
1939, as amended, 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 U.S. Bank National
Association.

         Section 4.2. Administrators. Each Administrator shall be a U.S. Person,
21 years of age or older and authorized to bind the Sponsor. The initial
Administrators shall be John Modin, Bruce Byrnes and Jeff Jeffreys. There shall
at all times be at least two Administrators. 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.

         Section 4.3. Appointment, Removal and Resignation of Institutional
Trustee and Administrators.

         (a) Notwithstanding anything to the contrary in this Declaration, no
resignation or removal of the Institutional Trustee and no appointment of a
Successor Institutional Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the Successor Institutional Trustee in
accordance with the applicable requirements of this Section 4.3.

                                       23
<PAGE>

         Subject to the immediately preceding paragraph, the Institutional
Trustee may resign at any time by giving written notice thereof to the Holders
of the Securities and by appointing a Successor Institutional 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 its 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
Institutional Trustee required by this Section 4.3 shall not have been delivered
to the Institutional Trustee within 60 days after the giving of such notice of
resignation, the Institutional 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 Institutional Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Institutional Trustee. The Institutional Trustee
shall have no liability for the selection of such successor pursuant to this
Section 4.3.

         The Institutional Trustee may be removed by the act of the Holders of a
Majority in liquidation amount of the Capital Securities, delivered to the
Institutional Trustee (in its individual capacity and on behalf of the Trust) if
an Event of Default shall have occurred and be continuing. If the Institutional
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 Institutional Trustee, shall promptly appoint a
Successor Institutional Trustee, and such Successor Institutional Trustee shall
comply with the applicable requirements of this Section 4.3. If no Successor
Institutional Trustee shall have been so appointed by the Holders of a Majority
in liquidation amount of the Capital Securities and accepted appointment in the
manner required by this Section 4.3, within 30 days after delivery of an
instrument of removal, any Holder who has been a Holder of the Securities for at
least 6 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 the Successor Institutional Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Institutional Trustee.

         The Institutional Trustee shall give notice of its resignation or
removal and each appointment of a Successor Institutional Trustee to all Holders
in the manner provided in Section 13.1(d) and shall give notice to the Sponsor.
Each notice shall include the name of the Successor Institutional Trustee and
the address of its Corporate Trust Office.

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

                                       24
<PAGE>

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

         (d) 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 Holder of the Common Securities.

         Section 4.4. Institutional Trustee Vacancies. If the Institutional
Trustee ceases to hold office for any reason a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Institutional Trustee shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a trustee appointed in accordance with Section 4.3.

         Section 4.5. Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of the Institutional Trustee shall not operate to dissolve,
terminate or annul the Trust or terminate this Declaration.

         Section 4.6. Meetings of the Institutional Trustee and the
Administrators. Meetings of the Administrators shall be held from time to time
upon the call of an Administrator. Regular meetings of the Administrators may be
held in person in the United States or by telephone, at a place (if applicable)
and time fixed by resolution of the Administrators. Notice of any in-person
meetings of the Institutional Trustee with the Administrators or meetings of the
Administrators shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the
Institutional Trustee with the Administrators or meetings of the Administrators
or any committee thereof shall be hand delivered or otherwise delivered in
writing (including by facsimile, with a hard copy by overnight courier) not less
than 24 hours before a meeting. Notices shall contain a brief statement of the
time, place and anticipated purposes of the meeting. The presence (whether in
person or by telephone) of the Institutional Trustee or an Administrator, as the
case may be, at a meeting shall constitute a waiver of notice of such meeting
except where the Institutional 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 grounds that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Institutional Trustee or the Administrators, as the case may be, may be taken at
a meeting by vote of the Institutional Trustee or a majority vote of the
Administrators present (whether in person or by telephone) and eligible to vote
with respect to such matter, provided that a Quorum is present, or without a
meeting by the unanimous written consent of the Institutional Trustee or the
Administrators. Meetings of the Institutional Trustee and the Administrators
together shall be held from time to time upon the call of the Institutional
Trustee or an Administrator.

                                       25
<PAGE>

         Section 4.7. Delegation of Power.

         (a) Any Administrator 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
contemplated in Section 2.6; and

         (b) the Administrators shall have power to delegate from time to time
to such of their number the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrators
or otherwise as the Administrators 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 4.8. Conversion, Consolidation or Succession to Business. Any
Person into which the Institutional Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Institutional Trustee shall be a party,
or any Person succeeding to all or substantially all the corporate trust
business of the Institutional Trustee shall be the successor of the
Institutional Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.

                                   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 or any
principal on the Debentures held by the Institutional Trustee, the Institutional
Trustee shall and is directed to, to the extent funds are available for that
purpose, make a distribution (a "Distribution") of such amounts to Holders.

                                  ARTICLE VI.

                             ISSUANCE OF SECURITIES

         Section 6.1. General Provisions Regarding Securities.

         (a) The Administrators shall, on behalf of the Trust, issue one series
of capital securities substantially in the form of Exhibit A-1 representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I and one series of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I. 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 to, 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 as set forth in Annex I.

                                       26
<PAGE>

         (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, and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be an Administrator of the Trust, although at the date of the
execution and delivery of the Declaration any such person was not such an
Administrator. A Capital Security shall not be valid until authenticated by the
facsimile or 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.

         (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,
except as provided in Section 9.1(b) with respect to the Common Securities,
non-assessable.

         (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 and Registrar. The Trust
shall maintain in Hartford, Connecticut, an office or agency where the Capital
Securities may be presented for payment ("Paying Agent"), and an office or
agency where Securities may be presented for registration of transfer 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,
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 or one or more co-Registrars, or one or more co-Transfer Agents in such
other locations as they shall determine. The term "Paying Agent" includes any
additional paying agent, the term "Registrar" includes any additional registrar
or co-Registrar and the term "Transfer Agent" includes any additional transfer
agent. The 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. The Institutional Trustee or any of its Affiliates in the
United States may act as Paying Agent, Transfer Agent or Registrar.

                                       27
<PAGE>

         Section 6.3. Form and Dating. 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 on or before 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 Administrators and the Sponsor, by their execution and delivery of
this Declaration, expressly agree to such terms and provisions and to be bound
thereby. Capital Securities will be issued only in blocks having a stated
liquidation amount of not less than $100,000.00 and any multiple of $1,000.00 in
excess thereof.

         The Capital Securities are being offered and sold by the Trust pursuant
to the Placement Agreement in definitive, registered form 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 protected purchaser, an Administrator on behalf of the Trust shall execute
(and in the case of a Capital Security Certificate, the Institutional Trustee
shall authenticate) and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 6.4, the Registrar or the Administrators may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

                                       28
<PAGE>

         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 the form of
definitive Securities but may have variations that the Administrators consider
appropriate for temporary Securities. Without unreasonable delay, the
Administrators shall prepare and, in the case of the Capital Securities, the
Institutional Trustee shall authenticate, definitive Securities in exchange for
temporary Securities.

         Section 6.6. Cancellation. The Administrators at any time may deliver
Securities to the Institutional Trustee for cancellation. The Registrar shall
forward to the Institutional Trustee any Securities surrendered to it for
registration of transfer, redemption or payment. The Institutional Trustee shall
promptly cancel all Securities surrendered for registration of transfer,
payment, replacement or cancellation and shall dispose of such canceled
Securities as the Administrators direct. The Administrators may not issue new
Securities to replace Securities that have been paid or that have been delivered
to the Institutional Trustee for cancellation.

         Section 6.7. Rights of Holders; Waivers of Past Defaults.

         (a) The legal title to the Trust Property is vested exclusively in the
Institutional Trustee (in its capacity as such) subject to 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 preemptive or similar rights.

         (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 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.

         At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Institutional Trustee, subject to the provisions hereof, fails
to annul any such declaration and waive such default, the Holders of a Majority
in liquidation amount of the Capital Securities, by written notice to the
Institutional Trustee, the Sponsor and the Debenture Trustee, may rescind and
annul such declaration and its consequences if:

                                       29
<PAGE>

                  (i) the Debenture Issuer 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 Additional Interest on all of the
                  Debentures,

                           (C) the principal of (and premium, if any, on) any
                  Debentures that have become due otherwise than by such
                  declaration of acceleration and interest and Additional
                  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,
                  expenses, disbursements and advances of the Debenture Trustee
                  and the Institutional Trustee, their agents and counsel; and

                  (ii) all Events of Default with respect to the Debentures,
         other than the non-payment of the principal of the Debentures that has
         become due solely by such acceleration, have been cured or waived as
         provided in Section 5.7 of the Indenture.

         The Holders of at least a Majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture or any Indenture Event of Default, except a
default or Indenture Event of Default in the payment of principal or interest
(unless such default or Indenture Event of Default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default under the Indenture or an Indenture 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 waiver
shall affect any subsequent default or impair any right consequent thereon.

         Upon receipt by the Institutional Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of any
part of the Capital Securities, a record date shall be established for
determining Holders of outstanding Capital Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Institutional Trustee receives such notice. The Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to join
in such notice, whether or not such Holders remain Holders after such record
date; provided, that unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 6.7.

                                       30
<PAGE>

         (c) Except as otherwise provided in paragraphs (a) and (b) of this
Section 6.7, the Holders of at least a Majority in liquidation amount of the
Capital Securities may, on behalf of the Holders of all the Capital Securities,
waive any past default or Event of Default and its consequences. Upon such
waiver, any such default or Event of Default shall cease to exist, and any
default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon.

                                  ARTICLE VII.

                      DISSOLUTION AND TERMINATION OF TRUST

         Section 7.1. Dissolution and Termination of Trust.

         (a) The Trust shall dissolve on the first to occur of:

                  (i) unless earlier dissolved, on October 29, 2038, the
         expiration of the term of the Trust;

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

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

                  (iv) upon the distribution of the Debentures to the Holders of
         the Securities in accordance with Section 3 of Annex I,

                  (v) upon exercise of the right of the Holder of all of the
         outstanding Common Securities to dissolve the Trust as provided in
         Annex I hereto;

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

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

                  (viii) before the issuance of any Securities, with the consent
         of the Institutional Trustee 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 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 the State of the State of Connecticut.

                                       31
<PAGE>

         (c) The provisions of Section 2.9 and Article IX shall survive the
termination of the Trust.

                                 ARTICLE VIII.

                              TRANSFER OF INTERESTS

         Section 8.1. General.

         (a) Subject to Section 8.1(c), where Capital Securities are presented
to the Registrar or a co-registrar with a request to register a transfer or to
exchange them for an equal number of Capital Securities represented by different
certificates, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Trust shall issue and the Institutional Trustee
shall authenticate Capital Securities at the Registrar's request.

         (b) Upon issuance of the Common Securities, the Sponsor shall acquire
and retain beneficial and record ownership of the Common Securities and for so
long as the Securities remain outstanding, the Sponsor shall maintain 100%
ownership of the Common Securities; provided, however, that any permitted
successor of the Sponsor, in its capacity as Debenture Issuer, under the
Indenture that is a U.S. Person may succeed to the Sponsor's ownership of the
Common Securities.

         (c) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. 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 Securities for any purpose, including but not limited to the receipt of
Distributions on such Securities, and such transferee shall be deemed to have no
interest whatsoever in such 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 of the same tenor to be issued in the name of
the designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Institutional Trustee pursuant
to Section 6.6. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.

                                       32
<PAGE>

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

         Section 8.2. Transfer Procedures and Restrictions.

         (a) The Capital Securities shall bear the Restricted Securities Legend,
which shall not be removed unless there is delivered to the Trust such
satisfactory evidence, which may include an opinion of counsel satisfactory to
the Institutional Trustee, as may be reasonably required by the Trust, that
neither the legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of the
Securities Act. Upon provision of such satisfactory evidence, the Institutional
Trustee, at the written direction of the Trust, shall authenticate and deliver
Capital Securities that do not bear the legend.

         (b) Except as permitted by Section 8.2(a), each Capital Security shall
bear a legend (the "Restricted Securities Legend") in substantially the
following form and a Capital Security shall not be transferred except in
compliance with such legend, unless otherwise determined by the Sponsor, upon
the advice of counsel expert in securities law, in accordance with applicable
law:

                  THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
         OF 1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS
         OR ANY OTHER APPLICABLE SECURITIES LAW. 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,
         ANY APPLICABLE STATE SECURITIES LAWS AND ANY OTHER APPLICABLE
         SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
         AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO
         THE SPONSOR OR THE TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
         HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON
         WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
         IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS THIS
         SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE
         WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN

                                       33
<PAGE>

         ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S
         UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
         WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES
         ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR
         THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
         INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
         CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
         OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
         REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE SPONSOR'S AND THE
         TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
         DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
         INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
         DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR
         OR THE TRUST. HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE
         CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

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

                                       34
<PAGE>

         TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR
         WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

                  THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
         BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100
         SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED
         TRANSFER OF SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS
         THAN $100,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
         WHATSOEVER.

                  THIS SECURITY IS IN REGISTERED FORM WITHIN THE MEANING OF
         TREASURY REGULATIONS SECTION 1.871-14(c)(1)(i) FOR U.S. FEDERAL INCOME
         AND WITHHOLDING TAX PURPOSES.

                  THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH
         THE FOREGOING RESTRICTIONS.

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

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

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

         (e) All Capital Securities 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 Capital Securities surrendered upon such registration of transfer or
exchange.

         Section 8.3. Deemed Security Holders. The Trust, the Administrators,
the Institutional Trustee, the Paying Agent, the Transfer Agent or the Registrar
may treat the Person in whose name any Certificate shall be registered on the
books and records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Administrators, the Institutional
Trustee, the Paying Agent, the Transfer Agent or the Registrar shall have actual
or other notice thereof.

                                       35
<PAGE>

                                  ARTICLE IX.

                           LIMITATION OF LIABILITY OF
             HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE 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; or

                  (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 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 Connecticut.

         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 shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.

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

         Section 9.3. Fiduciary Duty.

                                       36
<PAGE>

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

         (b) The Sponsor shall indemnify, to the full extent permitted by law,
any Indemnified Person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Trust to procure a judgment in its favor arising out of or in connection with
the acceptance or administration of this Declaration by reason of the fact that
he is or was an Indemnified Person against expenses (including reasonable
attorneys' fees and expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust; provided, however, 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 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 shall deem proper.

                                       37
<PAGE>

         (c) 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 (a) and (b) of this Section
9.4, or in defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses (including
attorneys' fees and expenses) actually and reasonably incurred by him in
connection therewith.

         (d) Any indemnification of an Administrator under paragraphs (a) and
(b) of this Section 9.4 (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Indemnified Person is proper in the circumstances because
he has met the applicable standard of conduct set forth in paragraphs (a) and
(b). Such determination shall be made (i) by the Administrators by a majority
vote of a Quorum consisting of such Administrators who were not parties to such
action, suit or proceeding, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Administrators so directs, by
independent legal counsel in a written opinion, or (iii) by the Common Security
Holder of the Trust.

         (e) To the fullest extent permitted by law, expenses (including
reasonable attorneys' fees and expenses) incurred by an Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (a) and (b) of this Section 9.4 shall be
paid by the Sponsor in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Indemnified
Person to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Sponsor as authorized in this Section 9.4.
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Administrators by a
majority vote of a Quorum of disinterested Administrators, (ii) if such a Quorum
is not obtainable, or, even if obtainable, if a quorum of disinterested
Administrators so directs, by independent legal counsel in a written opinion or
(iii) 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 Indemnified Person 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 his conduct was unlawful. In
no event shall any advance be made in instances where the Administrators,
independent legal counsel or the Common Security Holder reasonably determine
that such Indemnified Person deliberately breached his duty to the Trust or its
Common or Capital Security Holders.

         (f) The Institutional Trustee, at the sole cost and expense of the
Sponsor, retains the right to representation by counsel of its own choosing in
any action, suit or any other proceeding for which it is indemnified under
paragraphs (a) and (b) of this Section 9.4, without affecting its right to
indemnification hereunder or waiving any rights afforded to it under this
Declaration or applicable law.

                                       38
<PAGE>

         (g) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 9.4 shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Sponsor or Capital Security
Holders of the Trust or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All rights to
indemnification under this Section 9.4 shall be deemed to be provided by a
contract between the Sponsor and each Indemnified Person who serves in such
capacity at any time while this Section 9.4 is in effect. Any repeal or
modification of this Section 9.4 shall not affect any rights or obligations then
existing.

         (h) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any Person who is or was an Indemnified Person against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Sponsor would have the power to indemnify
him against such liability under the provisions of this Section 9.4.

         (i) For purposes of this Section 9.4, references to "the Trust" shall
include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger, so that any Person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in the same position under the provisions of this Section
9.4 with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.

         (j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4 shall, unless otherwise provided when
authorized or ratified, (i) 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; and (ii) survive the termination or expiration
of this Declaration or the earlier removal or resignation of an Indemnified
Person.

         Section 9.5. Outside Businesses. Any Covered Person, the Sponsor and
the Institutional Trustee (subject to Section 4.1(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 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 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 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.

                                       39
<PAGE>

         Section 9.6. Compensation; Fee. The Sponsor agrees:

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

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

         The provisions of this Section 9.6 shall survive the dissolution of the
Trust and the termination of this Declaration and the removal or resignation of
the Institutional Trustee.

         No Trustee may claim any lien or charge on any property of the Trust as
a result of any amount due pursuant to this Section 9.6.

                                   ARTICLE X.

                               TAX AND ACCOUNTING

         Section 10.1. Fiscal Year. The fiscal year ("Fiscal Year") of the Trust
shall be the calendar year, or such other year as is required by the Code.

         Section 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, at the Sponsor's expense, in accordance with generally
accepted accounting principles, consistently applied. The books of account and
the records of the Trust shall be examined by and reported upon (either
separately or as part of the Sponsor's regularly prepared consolidated financial
report) as of the end of each Fiscal Year of the Trust by a firm of independent
certified public accountants selected by the Administrators.

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

                                       40
<PAGE>

         (c) The Administrators, at the Sponsor's expense, shall cause to be
duly prepared at the principal office of the Sponsor in the United States, as
United States is defined in Section 7701(a)(9) of the Code (or at the principal
office of the Trust if the Sponsor has no such principal office in the United
States), 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, if
any, 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.

         Section 10.3. Banking. The Trust shall maintain in the United States,
as defined for purposes of Treasury Regulations Section 301.7701-7, one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Property Account and no
other funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts (including the Property Account) shall be
designated by the Institutional Trustee.

         Section 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 in the amount
of the withholding to the Holder. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Institutional Trustee or any Paying Agent may reduce subsequent
Distributions by the amount of such withholding.

         Section 10.5. 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.

                                  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 the Institutional Trustee.

                                       41
<PAGE>

         (b) Notwithstanding any other provision of this Article XI, an
amendment may be made, and any such purported amendment shall be valid and
effective only if:

                  (i) the Institutional Trustee shall have first received

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

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

                  (ii) the result of such amendment would not be to

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

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

         (c) Except as provided in Section 11.1(d), (e) or (h), no amendment
shall be made, and any such purported amendment shall be void and ineffective
unless the Holders of a Majority in liquidation amount of the Capital Securities
shall have consented to such amendment.

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

         (e) Sections 9.1(b) and 9.1(c) and this Section 11.1 shall not be
amended without the consent of all of the Holders of the Securities.

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

         (g) The rights of the Holders of the Capital Securities under Article
IV to appoint and remove the Institutional Trustee shall not be amended without
the consent of the Holders of a Majority in liquidation amount of the Capital
Securities.

         (h) This Declaration may be amended by the Institutional Trustee and
the Holders 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;

                                       42
<PAGE>

                           (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 to ensure
                  that the Trust will be classified for United States federal
                  income tax purposes at all times as a grantor trust and will
                  not be required to register as an "investment company" under
                  the Investment Company Act (including without limitation to
                  conform to any change in Rule 3a-5, Rule 3a-7 or any other
                  applicable rule under the Investment Company Act or written
                  change in interpretation or application thereof by any
                  legislative body, court, government agency or regulatory
                  authority) which amendment does not have a material adverse
                  effect on the rights, preferences or privileges of the Holders
                  of Securities;

         provided, however, that no such modification, elimination or addition
referred to in clauses (i), (ii), (iii) or (iv) shall adversely affect in any
material respect the powers, preferences or special rights of Holders of Capital
Securities.

         Section 11.2. Meetings of the Holders of Securities; Action by Written
Consent.

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

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

                  (i) notice of any such meeting shall be given to all the
         Holders of the Securities having a right to vote thereat at least 7
         days and not more than 60 days before the date of such meeting.
         Whenever a vote, consent or approval of the Holders of the Securities
         is permitted or required under this Declaration, such vote, consent or
         approval may be given at a meeting of the Holders of the Securities.
         Any action that may be taken at a meeting of the Holders of the
         Securities may be taken without a meeting if a consent in writing
         setting forth the action so taken is signed by the Holders of the
         Securities owning not less than the minimum amount of Securities in
         liquidation amount 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;

                                       43
<PAGE>

                  (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 Connecticut relating to proxies, and judicial interpretations
         thereunder, as if the Trust were a Connecticut corporation and the
         Holders of the Securities were stockholders of a Connecticut
         corporation; each meeting of the Holders of the Securities shall be
         conducted by the Administrators or by such other Person that the
         Administrators may designate; and

                  (iii) unless the Statutory Trust Act, this Declaration, or the
         terms of the Securities 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

         Section 12.1. Representations and Warranties of Institutional Trustee.
The 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 national banking association with
trust powers, duly organized and validly existing under the laws of the United
States of America 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 execution, delivery and performance by the Institutional
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. This Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether considered in a proceeding in equity or at law);

                                       44
<PAGE>

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

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

                                 ARTICLE XIII.

                                  MISCELLANEOUS

         Section 13.1. Notices. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied (which telecopy shall be followed by notice delivered or
mailed by first class mail) or mailed by first class mail, as follows:

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

                  PXRE Capital Statutory Trust V
                  c/o PXRE Group Ltd.
                  Swan Building
                  26 Victoria Street
                  Hamilton, HM12, Bermuda
                  Attention:  Chief Financial Officer
                  Telecopy:  441-296-6162

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):

                  U.S. Bank National Association
                  225 Asylum Street, Goodwin Square
                  Hartford, Connecticut  06103
                  Attention:  Vice President, Corporate Trust Services
                  Telecopy:  860-244-1889

                  With a copy to:

                  U.S. Bank National Association
                  1 Federal Street
                  Boston, Massachusetts  02110
                  Attention:  Paul D. Allen, Corporate Trust Services
                  Telecopy:  617-603-6665

                                       45
<PAGE>

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

                  PXRE Group Ltd.
                  Swan Building
                  26 Victoria Street
                  Hamilton, HM12, Bermuda
                  Attention:  Chief Financial Officer
                  Telecopy:  441-296-6162

         (c) 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 of the
parties hereunder shall be governed by and interpreted in accordance with the
law of the State of Connecticut and all rights and remedies shall be governed by
such laws without regard to the principles of conflict of laws of the State of
Connecticut or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Connecticut; provided, however,
that there shall not be applicable to the Trust, the Institutional Trustee or
this Declaration any provision of the laws (statutory or common) of the State of
Connecticut pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof (a) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges, (b)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (c) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (d) fees or other sums payable to trustees, officers,
agents or employees of a trust, (e) the allocation of receipts and expenditures
to income or principal, or (f) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets.

         Section 13.3. Intention of the Parties. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.

                                       46
<PAGE>

         Section 13.4. Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.

         Section 13.5. Successors and Assigns. Whenever in this Declaration any
of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Institutional Trustee shall bind and
inure to the benefit of their respective successors and assigns, whether or not
so expressed.

         Section 13.6. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.

         Section 13.7. Counterparts. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Institutional Trustee 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.

                     Signatures appear on the following page

                                       47
<PAGE>

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

                                        U.S. BANK NATIONAL ASSOCIATION,
                                          as Institutional Trustee

                                        By: /s/  Paul D. Allen
                                           -------------------------------------
                                                 Name:  Paul D. Allen
                                                 Title: Vice President

                                        PXRE GROUP LTD., as Sponsor

                                        By: /s/  John M. Modin
                                           -------------------------------------
                                                 Name:  John M. Modin
                                                 Title: CFO

                                        PXRE CAPITAL STATUTORY TRUST V

                                        By: /s/  John M. Modin
                                           -------------------------------------
                                                 John Modin
                                                 Administrator

                                        By: /s/  Bruce J. Byrnes
                                           -------------------------------------
                                                 Bruce Byrnes
                                                 Administrator

                                        By: /s/  Jeff Jeffreys
                                           -------------------------------------
                                                 Jeff Jeffreys
                                                 Administrator

                                       48
<PAGE>

                                     ANNEX I

                               TERMS OF SECURITIES

         Pursuant to Section 6.1 of the Amended and Restated Declaration of
Trust, dated as of October 29, 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 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) 20,000 Fixed/Floating Rate Capital Securities of PXRE CAPITAL
Statutory Trust V (the "Trust"), with an aggregate stated liquidation amount
with respect to the assets of the Trust of Twenty Million U.S. dollars
($20,000,000.00) and a stated liquidation amount with respect to the assets of
the Trust of $1,000.00 per Capital Security, are hereby designated for the
purposes of identification only as 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.

         (b) 619 Fixed/Floating Rate Common Securities of the Trust, with an
aggregate stated liquidation amount with respect to the assets of the Trust of
Six Hundred and Nineteen Thousand U.S. dollars ($619,000.00) and a stated
liquidation amount with respect to the assets of the Trust of $1,000.00 per
Common Security (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.

         2. Distributions.

         (a) Distributions will be payable on each Security for the period
beginning on (and including) the date of original issuance and ending on (but
excluding) October 29, 2008 at a rate per annum of 7.70% and shall bear interest
for each successive Distribution Period beginning on (and including) October 29,
2008, and each succeeding Distribution Payment Date, and ending on (but
excluding) the next succeeding Distribution Payment Date (each, a "Distribution
Period") at a rate per annum equal to the 3-Month LIBOR, determined as described
below, plus 3.85% (the "Coupon Rate"), applied to the stated liquidation amount
thereof, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
quarterly period will bear interest thereon compounded quarterly at the
applicable Distribution Rate (to the extent permitted by law). Distributions, as
used herein, include cash distributions, any such compounded distributions and
any Additional Sums payable on the Debentures unless otherwise noted. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. In the event that any date
on which a Distribution is payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable. The amount of the Distribution
payable (i) for any Distribution Period commencing on or after the date of
original issuance but before October 29, 2008 will be computed on the basis of a
360-day year of twelve 30-day months, and (ii) for the Distribution Period
commencing on or after October 29, 2008 and each succeeding Distribution Period
will be calculated by applying the Distribution Rate to the stated liquidation
amount outstanding at the commencement of the Distribution Period and
multiplying each such amount by the actual number of days in the Distribution
Period concerned divided by 360. 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)).

                                      I-1
<PAGE>

         "3-Month LIBOR" means the London interbank offered interest rate for
three-month, U.S. dollar deposits determined by the Debenture Trustee in the
following order of priority:

                  (1) the rate (expressed as a percentage per annum) for U.S.
         dollar deposits having a three-month maturity that appears on Telerate
         Page 3750 as of 11:00 a.m. (London time) on the related Determination
         Date (as defined below). "Telerate Page 3750" means the display
         designated as "Page 3750" on the Dow Jones Telerate Service or such
         other page as may replace Page 3750 on that service or such other
         service or services as may be nominated by the British Bankers'
         Association as the information vendor for the purpose of displaying
         London interbank offered rates for U.S. dollar deposits;

                  (2) if such rate cannot be identified on the related
         Determination Date, the Debenture Trustee will request the principal
         London offices of four leading banks in the London interbank market to
         provide such banks' offered quotations (expressed as percentages per
         annum) to prime banks in the London interbank market for U.S. dollar
         deposits having a three-month maturity as of 11:00 a.m. (London time)
         on such Determination Date. If at least two quotations are provided,
         3-Month LIBOR will be the arithmetic mean of such quotations;

                  (3) if fewer than two such quotations are provided as
         requested in clause (2) above, the Debenture Trustee will request four
         major New York City banks to provide such banks' offered quotations
         (expressed as percentages per annum) to leading European banks for
         loans in U.S. dollars as of 11:00 a.m. (London time) on such
         Determination Date. If at least two such quotations are provided,
         3-Month LIBOR will be the arithmetic mean of such quotations; and

                  (4) if fewer than two such quotations are provided as
         requested in clause (3) above, 3-Month LIBOR will be a 3-Month LIBOR
         determined with respect to the Distribution Period immediately
         preceding such current Distribution Period.

                                      I-2
<PAGE>

         If the rate for U.S. dollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
related Determination Date is superseded on the Telerate Page 3750 by a
corrected rate by 12:00 noon (London time) on such Determination Date, then the
corrected rate as so substituted on the applicable page will be the applicable
3-Month LIBOR for such Determination Date.

         The Interest Rate for any Distribution Period will at no time be higher
than the maximum rate then permitted by New York law as the same may be modified
by United States law.

         "Determination Date" means the date that is two London Banking Days
(i.e., a business day in which dealings in deposits in U.S. dollars are
transacted in the London interbank market) preceding the particular Distribution
Period for which a Coupon Rate is being determined.

         "Interest Rate" means for the period beginning on (and including) the
date of original issuance and ending on (but excluding) October 29, 2008 the
rate per annum of 7.70% and for each Distribution Period thereafter, the Coupon
Rate.

         "Maturity Date" means October 29, 2033.

         (b) Distributions on the Securities will be cumulative, will accrue
from the date of original issuance, and will be payable, subject to extension of
distribution payment periods as described herein, quarterly in arrears on
January, 29, April 29, July 29 and October 29 of each year, commencing on
January 29, 2004 (each a "Distribution Payment Date") when, as and if available
for payment. The Debenture Issuer has the right under the Indenture to defer
payments of interest on the Debentures, so long as no Indenture Event of Default
has occurred and is continuing, by deferring the payment of interest on the
Debentures for up to 20 consecutive quarterly periods (each an "Extension
Period") at any time and from time to time, subject to the conditions described
below, during which Extension Period no interest shall be due and payable.
During any Extension Period, interest will continue to accrue on the Debentures,
and interest on such accrued interest will accrue at an annual rate equal to the
Distribution Rate in effect for each such Extension Period, compounded quarterly
(from the date such interest would have been payable were it not for the
Extension Period), to the extent permitted by law (such interest referred to
herein as "Additional Interest"). No Extension Period may end on a date other
than a Distribution Payment Date. At the end of any such Extension Period the
Debenture Issuer shall pay all interest then accrued and unpaid on the
Debentures (together with Additional Interest thereon); provided, however, that
no Extension Period may extend beyond the Maturity Date and provided further,
however, that during any such Extension Period, the Debenture Issuer shall not,
and shall not permit any Affiliate of the Debenture Issuer controlled by the
Debenture Issuer to, (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 share capital or its Affiliates' capital stock (other
than payments of dividends or distributions to the Debenture Issuer or a
Subsidiary of the Debenture Issuer) or make any guarantee payments with respect
to the foregoing, or (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Debenture Issuer or any Affiliate of the Debenture Issuer controlled by the
Debenture Issuer that rank pari passu in all respects with or junior in interest
to the Debentures (other than, with respect to clauses (i) and (ii) above, (a)
repurchases, redemptions or other acquisitions of shares or capital stock of the

                                      I-3
<PAGE>

Debenture Issuer or any Subsidiary of the Debenture Issuer 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, in
connection with a dividend reinvestment or shareholder share purchase plan or in
connection with the issuance of share capital or capital stock of the Debenture
Issuer or of such Subsidiary (or securities convertible into or exercisable for
such share capital or 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 share capital (or any capital stock of a Subsidiary of the Debenture
Issuer) for any class or series of the Debenture Issuer's share capital (or in
the case of a Subsidiary of the Debenture Issuer, any class or series of such
Subsidiary'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 share capital (or
in the case of indebtedness of a Subsidiary of the Debenture Issuer, of any
class or series of such Subsidiary's indebtedness for any class or series of
such Subsidiary's capital stock), (c) the purchase of fractional interests in
shares of the Debenture Issuer's share capital (or the capital stock of a
Subsidiary of the Debenture Issuer) pursuant to the conversion or exchange
provisions of such share capital or capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with any
shareholders' rights plan, or the issuance of rights, shares, stock or other
property under any shareholders' rights plan, or the redemption or repurchase of
rights pursuant thereto, (e) any dividend in the form of shares, stock,
warrants, options or other rights where the bonus shares, dividend stock, shares
or the stock issuable upon exercise of such warrants, options or other rights
are the same shares or stock as those on which the dividend is being paid or
ranks pari passu with or junior to such shares or stock and any cash payments in
lieu of fractional shares issued in connection therewith, or (f) payments under
the Guarantee). Prior to the termination of any Extension Period, the Debenture
Issuer may further extend such period, provided that such period together with
all such previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and Additional Interest, the Debenture Issuer may commence a new
Extension Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional
Interest. During any Extension Period, Distributions on the Securities shall be
deferred for a period equal to the Extension Period. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, to Holders of the Securities as they appear on the
books and records of the Trust on the record date immediately preceding such
date. Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust's funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.

         (c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. The relevant record dates shall be 15 days before the relevant
Distribution Payment Date. Distributions payable on any Securities that are not
punctually paid on any Distribution Payment Date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, as the case may be,
when due (taking into account any Extension Period), will cease to be payable to
the Person in whose name such Securities are registered on the relevant record
date, and such defaulted Distribution will instead be payable to the Person in
whose name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such payment
date.

                                      I-4
<PAGE>

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

         3. Liquidation Distribution Upon Dissolution. In the event of the
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Trust (each a "Liquidation") other than in connection with a redemption of
the Debentures, the Holders of the Securities will be entitled to receive out of
the assets of the Trust available for distribution to Holders of the Securities,
after satisfaction of liabilities to creditors of the Trust (to the extent not
satisfied by the Debenture Issuer), distributions equal to the lesser of (i) the
aggregate of the stated liquidation amount of $1,000.00 per Security plus
accrued and unpaid Distributions thereon to the date of payment, to the extent
the Trust shall have funds available therefor, and (ii) the amount of assets of
the Trust remaining available for contributions to Holders in liquidation of the
Trust (such amount being, the "Liquidation Distribution"), unless in connection
with such Liquidation, the Debentures in an aggregate stated principal amount
equal to the aggregate stated liquidation amount of such Securities, with an
interest rate equal to the Distribution Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, and
having the same record date as, such Securities, after paying or making
reasonable provision to pay all claims and obligations of the Trust in
accordance with 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 to dissolve the Trust (including, without limitation, upon the
occurrence of a Special Event) and, after satisfaction of liabilities to
creditors of the Trust, cause the Debentures to be distributed to the Holders of
the Securities on a Pro Rata basis in accordance with the aggregate stated
liquidation amount thereof.

         If a Liquidation of the Trust occurs as described in clause (i), (ii),
(iii) or (v) in Section 7.1(a) of the Declaration, the Trust shall be liquidated
by the Institutional Trustee as expeditiously as it determines to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust, to
the Holders of the Securities, the Debentures on a Pro Rata basis to the extent
not satisfied by the Debenture Issuer, unless such distribution is determined by
the Institutional Trustee not to be practical, in which event such Holders will
be entitled to receive out of the assets of the Trust available for distribution
to the Holders, after satisfaction of liabilities of creditors of the Trust to
the extent not satisfied by the Debenture Issuer, an amount equal to the
Liquidation Distribution. An early Liquidation of the Trust pursuant to clause
(iv) of Section 7.1(a) of the Declaration shall occur if the Institutional
Trustee determines that such Liquidation is possible by distributing, after
satisfaction of liabilities to creditors of the Trust, to the Holders of the
Securities on a Pro Rata basis, the Debentures, and such distribution occurs.

                                      I-5
<PAGE>

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

         After the date for any distribution of the Debentures upon dissolution
of the Trust (i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) upon surrender of a Holder's Securities certificate, such
Holder of the Securities will receive a certificate representing the Debentures
to be delivered upon such distribution (iii) any certificates representing the
Securities still outstanding will be deemed to represent undivided beneficial
interests in such of the Debentures as have an aggregate principal amount equal
to the aggregate stated liquidation amount with an interest rate identical to
the Distribution Rate of, and bearing accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissuance (and
until such certificates are so surrendered, no payments of interest or principal
shall be made to Holders of Securities in respect of any payments due and
payable under the Debentures; provided, however that such failure to pay shall
not be deemed to be an Event of Default and shall not entitle the Holder to the
benefits of the Guarantee), and (iv) all rights of Holders of Securities under
the Declaration 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 29, 2033. The Debentures may
be redeemed by the Debenture Issuer, in whole or in part at any Distribution
Payment Date on or after October 29, 2008, at the Optional Redemption Price. In
addition, the Debentures may be redeemed by the Debenture Issuer at the Special
Redemption Price, in whole but not in part, at any Distribution Payment Date,
upon the occurrence and continuation of a Special Event within 120 days
following the occurrence of such Special Event at the Special Redemption Price,
upon not less than 30 nor more than 60 days' notice to holders of such
Debentures so long as such Special Event is continuing. The Sponsor shall
appoint a Quotation Agent, which initially shall be U. S. Bank National
Association, for the purpose of performing the services contemplated in or by
reference in, the definition of Special Redemption Price. Any error in the
calculation of the Special Redemption Price by the Quotation Agent or the
Debenture Trustee may be corrected at any time by notice delivered to the
Sponsor and the holders of the Capital Securities. Subject to the corrective
rights set forth above, all certificates, communications, opinions,
determinations, calculations, quotations and decisions given, expressed, made or
obtained for the purposes of the provisions relating to the payment and
calculation of the Special Redemption Price on the Debentures or the Capital
Securities by the Debenture Trustee, the Quotation Agent or the Institutional
Trustee, as the case may be, shall (in the absence of willful default, bad faith
or manifest error) be final, conclusive and binding on the holders of the
Debentures and the Capital Securities, the Trust and the Sponsor, and no
liability shall attach (except as provided above) to the Debenture Trustee, the
Quotation Agent or the Institutional Trustee in connection with the exercise or
non-exercise by any of them of their respective powers, duties and discretion.

                                      I-6
<PAGE>

         "Comparable Treasury Issue" means with respect to any Special
Redemption Date the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Fixed Rate Period Remaining Life
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the Fixed Rate Period Remaining Life. If no United
States Treasury security has a maturity which is within a period from three
months before to three months after October 29, 2008, the two most closely
corresponding fixed, non-callable United States Treasury securities, as selected
by the Quotation Agent, shall be used as the Comparable Treasury Issue, and the
Treasury Rate shall be interpolated and extrapolated on a straight-line basis,
rounding to the nearest month using such securities.

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

         "Federal Reserve" means the Board of Governors of the Federal Reserve
System and any successor federal agency.

         "Fixed Rate Period Remaining Life" means, with respect to any
Debenture, the period from the Special Redemption Date for such Debenture to
October 29, 2008.

         "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 the occurrence of a change in law or regulation or written
change (including any announced prospective 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 issuance of the
Debentures.

         "Maturity Date" means October 29, 2033.

         "Optional Redemption Date" shall mean the date fixed for the redemption
of Capital Securities, which shall be any January, 29, April 29, July 29 or
October 29 on or after October 29, 2008.

          "Optional Redemption Price" means 100% of the principal amount of the
Debentures being redeemed, plus accrued and unpaid interest on such Debentures
to the Optional Redemption Date.

                                      I-7
<PAGE>

          "Primary Treasury Dealer" means either a nationally recognized primary
United States Government securities dealer or an entity of recognized standing
in matters pertaining to the quotation of treasury securities that is reasonably
acceptable to the Sponsor and the Institutional Trustee.

         "Quotation Agent" means U. S. Bank National Association, or its
designee, and its successors; provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Sponsor shall substitute therefor
another Primary Treasury Dealer.

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

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

         "Special Event" means a Tax Event or an Investment Company Event.

         "Special Redemption Date" means a date on which a Special Event
redemption occurs, which shall be any January, 29, April 29, July 29 or October
29.

         "Special Redemption Price" means (a) if the Special Redemption Date
occurs before October 29, 2008, the greater of (i) 107.5% of the principal
amount of the Debentures, plus accrued and unpaid interest (including Additional
Interest) on the Debentures to the occurrence of the Special Redemption Date, or
(ii) as determined by the Quotation Agent, (A) the sum of the present values of
the scheduled payments of principal and interest payable on the Debentures
during the Fixed Rate Period Remaining Life of the Debentures (assuming the
Debentures matured on October 29, 2008), discounted to the Special Redemption
Date on a quarterly basis (assuming a 360-day year consisting of twelve 30-day
months at the Treasury Rate), plus (B) accrued and unpaid interest (including
Additional Interest) on the Debentures to such Special Redemption Date, or (b)
if the Special Redemption Date occurs on or after October 29, 2008, 100% of the
principal amount of the Debentures being redeemed, plus accrued and unpaid
interest (including any Additional Interest) on such Debentures to the Special
Redemption Date.

         "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, field service advice, regulatory procedure, notice
or announcement including any notice or announcement of intent to adopt such
procedures or regulations (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) interest payable
by the Debenture Issuer on the Debentures is not, or within 90 days of the date
of such opinion, will not be, deductible by the Debenture Issuer, in whole or in
part, for United States federal income tax purposes; or (iii) the Trust is, or
will be within 90 days of the date of such opinion, subject to more than a de
minimis amount of other taxes (excluding withholding taxes), duties or other
governmental charges.

                                      I-8
<PAGE>

         "Treasury Rate" means (i) the yield, under the heading which represents
the average for the week immediately prior to the date of calculation, appearing
in the most recently published statistical release designated H.15 (519) or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Fixed Rate Period Remaining Life (if no maturity
is within three months before or after the Fixed Rate Period Remaining Life,
yields for the two published maturities most closely corresponding to the Fixed
Rate Period Remaining Life shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Special Redemption Date. The
Treasury Rate shall be calculated by the Quotation Agent on the third Business
Day preceding the Special Redemption Date.

         (b) Upon the repayment in full at maturity or redemption in whole or in
part of the Debentures (other than following the distribution of the Debentures
to the Holders of the Securities), the proceeds from such repayment or payment
shall concurrently be applied to redeem Pro Rata at the applicable Optional
Redemption Price or Special Redemption Price, as applicable, Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed; provided, however, that holders of such
Securities shall be given not less than 30 nor more than 60 days' notice of such
redemption (other than at the scheduled maturity of the Debentures).

         (c) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Capital Securities will be redeemed Pro Rata and
the Capital Securities to be redeemed will be redeemed Pro Rata from each Holder
of Capital Securities.

         (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 quarterly Distribution periods terminating on or
before the date of redemption.

                                      I-9
<PAGE>

         (e) Redemption or Distribution Procedures.

                  (i) Notice of any redemption of, or notice of distribution of
         the Debentures in exchange for, the Securities (a
         "Redemption/Distribution Notice") will be given by the Trust by mail to
         each Holder of Securities to be redeemed or exchanged not fewer than 30
         nor more than 60 days before the date fixed for redemption or exchange
         thereof which, in the case of a redemption, will be the date fixed for
         redemption of the Debentures. For purposes of the calculation of the
         date of redemption or exchange and the dates on which notices are given
         pursuant to this paragraph 4(e)(i), a Redemption/Distribution Notice
         shall be deemed to be given on the day such notice is first mailed by
         first-class mail, postage prepaid, to Holders of such Securities. Each
         Redemption/Distribution Notice shall be addressed to the Holders of
         such Securities at the address of each such Holder appearing on the
         books and records of the Trust. No defect in the
         Redemption/Distribution Notice or in the mailing thereof with respect
         to any Holder shall affect the validity of the redemption or exchange
         proceedings with respect to any other Holder.

                  (ii) If the Securities are to be redeemed and the Trust gives
         a Redemption/ Distribution Notice, which notice may only be issued if
         the Debentures are redeemed as set out in this paragraph 4 (which
         notice will be irrevocable), then, provided that the Institutional
         Trustee has a sufficient amount of cash in connection with the related
         redemption or maturity of the Debentures, the Institutional Trustee
         will pay the relevant Optional Redemption Price or Special Redemption
         Price, as applicable, 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 Optional Redemption Date. If a
         Redemption/Distribution Notice shall have been given and funds
         deposited as required then immediately prior to the close of business
         on the date of such deposit Distributions will cease to accrue on the
         Securities so called for redemption and all rights of Holders of such
         Securities so called for redemption will cease, except the right of the
         Holders of such Securities to receive the applicable Optional
         Redemption Price or Special Redemption Price specified in paragraph
         4(a), but without interest on such Optional Redemption Price or Special
         Redemption Price. If any date fixed for redemption of Securities is not
         a Business Day, then payment of any such Optional Redemption Price or
         Special Redemption Price payable on such date will be made on the next
         succeeding day that is a Business Day (and without any interest or
         other payment in respect of any such delay) except that, if such
         Business Day falls in the next calendar year, such payment will be made
         on the immediately preceding Business Day, in each case with the same
         force and effect as if made on such date fixed for redemption. If
         payment of the Optional Redemption Price or Special Redemption Price in
         respect of any Securities is improperly withheld or refused and not
         paid either by the Trust or by the Debenture Issuer as guarantor
         pursuant to the Guarantee, Distributions on such Securities will
         continue to accrue at the Distribution Rate from the original Optional
         Redemption Date or Special Redemption Date to the actual date of
         payment, in which case the actual payment date will be considered the
         date fixed for redemption for purposes of calculating the Optional
         Redemption Price or Special Redemption Price. In the event of any
         redemption of the Capital Securities issued by the Trust in part, the
         Trust shall not be required to (i) issue, register the transfer of or
         exchange any Security during a period beginning at the opening of
         business 15 days before any selection for redemption of the Capital
         Securities and ending at the close of business on the earliest date on
         which the relevant notice of redemption is deemed to have been given to
         all Holders of the Capital Securities to be so redeemed or (ii)
         register the transfer of or exchange any Capital Securities so selected
         for redemption, in whole or in part, except for the unredeemed portion
         of any Capital Securities being redeemed in part.

                                      I-10
<PAGE>

                  (iii) Redemption/Distribution Notices shall be sent by the
         Administrators on behalf of the Trust to (A) in respect of the Capital
         Securities, the Holders thereof and (B) in respect of the Common
         Securities, the Holder thereof.

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

         5. Voting Rights - Capital Securities.

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

         (b) Subject to the requirements of obtaining a tax opinion by the
Institutional Trustee in certain circumstances set forth in the last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the Capital
Securities, voting separately as a class, have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture as the holder of the Debentures, (ii) waive any
past default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable or (iv) consent on behalf of all the Holders of the Capital
Securities to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required; provided, however, that, where
a consent or action under the Indenture would require the consent or act of the
holders of greater than a simple majority in aggregate 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 at least the proportion in liquidation amount of the Capital
Securities outstanding which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. If the Institutional
Trustee fails to enforce its rights under the Debentures after the Holders of a
Majority in liquidation amount of such Capital Securities have so directed the
Institutional Trustee, to the fullest extent permitted by law, a Holder of the
Capital Securities may institute a legal proceeding directly against the
Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event

                                      I-11
<PAGE>

is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date the interest or principal is payable (or
in the case of redemption, the Optional Redemption Date or the Special
Redemption Date, as applicable), then a Holder of record of the Capital
Securities may directly institute a proceeding for enforcement of payment on or
after the respective due dates specified in the Debentures, to such Holder
directly of the principal of or interest on the Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such Holder. The Institutional Trustee shall notify all Holders of
the Capital Securities of any default actually known to the Institutional
Trustee with respect to the Debentures unless (x) such default has been cured
prior to the giving of such notice or (y) the Institutional Trustee determines
in good faith that the withholding of such notice is in the interest of the
Holders of such Capital Securities, except where the default relates to the
payment of principal of or interest on any of the Debentures. Such notice shall
state that such Indenture Event of Default also constitutes an Event of Default
hereunder. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Institutional Trustee shall not take
any of the actions described in clauses (i), (ii) or (iii) above unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes.

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

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

                                      I-12
<PAGE>

         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.

         6. Voting Rights - Common Securities.

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

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

         (c) Subject to Section 6.7 of the Declaration and only after each Event
of Default (if any) with respect to the Capital Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waiving any past default and its
consequences that is waivable under the Indenture, or (iii) exercising any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable; provided, however, that, where a consent or action under the
Indenture would require a Super Majority, the Institutional Trustee may only
give such consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. Notwithstanding this paragraph 6(c), the Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
or consent of the Holders of the Capital Securities. Other than with respect to
directing the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action described in (i),
(ii) or (iii) above, unless the Institutional Trustee has obtained an opinion of
tax counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights under the
Declaration 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.

                                      I-13
<PAGE>

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

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

         7. Amendments to Declaration and Indenture.

         (a) In addition to any requirements under Section 11.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Institutional Trustee, Sponsor or Administrators 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 at least a Majority in liquidation amount of the
Securities, affected thereby; provided, however, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
Securities or only the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities.

         (b) In the event the consent of the Institutional Trustee as the holder
of the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture 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
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.

         (c) Notwithstanding the foregoing, no amendment or modification may be
made to 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.

                                      I-14
<PAGE>

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

         8. Pro Rata. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of the Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities then outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Capital Securities Pro Rata according to the aggregate liquidation amount of the
Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of the Common Securities Pro Rata according to the aggregate
liquidation amount of the Common Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Common Securities outstanding.

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

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

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

                                      I-15
<PAGE>

         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.

                                      I-16
<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"), ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. 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, ANY APPLICABLE STATE SECURITIES LAWS AND ANY
OTHER APPLICABLE SECURITIES LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE
SPONSOR OR THE TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE)
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE SPONSOR'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE
TRUST. HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT.

         THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN ASSETS" OF

                                      A-1-1
<PAGE>

ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR
ADMINISTRATIVE EXEMPTION.

         THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100 SECURITIES) AND
MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SECURITIES
IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED
TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

         THIS SECURITY IS IN REGISTERED FORM WITHIN THE MEANING OF TREASURY
REGULATIONS SECTION 1.871-14(c)(1)(i) FOR U.S. FEDERAL INCOME AND WITHHOLDING
TAX PURPOSES.

         THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE
FOREGOING RESTRICTIONS.

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

           Certificate Number P-1         20,000 Capital Securities

                                October 29, 2003

          Certificate Evidencing Fixed/Floating Rate Capital Securities

                                       of

                         PXRE Capital Statutory Trust V

               (liquidation amount $1,000.00 per Capital Security)

                                      A-1-2
<PAGE>

         PXRE Capital Statutory Trust V, a statutory trust created under the
laws of the State of Connecticut (the "Trust"), hereby certifies that Hare & Co.
(the "Holder"), as the nominee of The Bank of New York, indenture trustee under
the Indenture dated as of October 29, 2003, among I-Preferred Term Securities
III, Ltd., I-Preferred Term Securities III, Inc. and The Bank of New York, is
the registered owner of capital securities of the Trust representing undivided
beneficial interests in the assets of the Trust, (liquidation amount $1,000.00
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 October
29, 2003, among John Modin, Bruce Byrnes and Jeff Jeffreys, as Administrators,
U.S. Bank National Association, as Institutional Trustee, PXRE Group Ltd., 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 such amended and restated declaration as
the same may be amended from time to time (the "Declaration"). Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Guarantee, and the Indenture to the Holder without charge upon written request
to the Sponsor at its principal place of business.

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

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

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

                       Signatures appear on following page

                                      A-1-3

<PAGE>

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

                                                PXRE CAPITAL STATUTORY TRUST V

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

                          CERTIFICATE OF AUTHENTICATION

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

                                               U.S. BANK NATIONAL
                                               ASSOCIATION, as the
                                               Institutional Trustee

                                               By:
                                                   ---------------------------
                                                     Authorized Officer

                                      A-1-4

<PAGE>

                      [FORM OF REVERSE OF CAPITAL SECURITY]

         Distributions payable on each Capital Security will be payable at an
annual rate equal to 7.70% beginning on (and including) the date of original
issuance and ending on (but excluding) October 29, 2008 and at an annual rate
for each successive Distribution Period beginning on (and including) October 29,
2008, and each succeeding Distribution Payment Date, and ending on (but
excluding) the next succeeding Distribution Payment Date (each a "Distribution
Period"), equal to 3-Month LIBOR, determined as described below, plus 3.85% (the
"Coupon Rate"), applied to the stated liquidation amount of $1,000.00 per
Capital Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears will bear
interest thereon compounded quarterly at the Distribution Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
payments of cash distributions and any such compounded distributions and any
Additional Sums payable on the Debentures unless otherwise noted. A Distribution
is payable only to the extent that payments are made in respect of the
Debentures held by the Institutional Trustee and to the extent the Institutional
Trustee has funds available therefor. As used herein, "Determination Date" means
the date that is two London Banking Days (i.e., a business day in which dealings
in deposits in U.S. dollars are transacted in the London interbank market)
preceding the commencement of the relevant Distribution Period. In the event
that any date on which a Distribution is payable on this Capital Security is not
a Business Day, then a payment of the Distribution payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. The amount of
the Distribution payable (i) for any Distribution Period commencing on or after
the date of original issuance but before October 29, 2008 will be computed on
the basis of a 360-day year of twelve 30-day months, and (ii) for the
Distribution Period commencing on or after October 29, 2008 and each succeeding
Distribution Period will be computed on the Distribution Rate to the stated
liquidation amount outstanding at the commencement of the Distribution Period
and multiplying each such amount by the actual number of days in the
Distribution Period concerned divided by 360.

         "3-Month LIBOR" as used herein, means the London interbank offered
interest rate for three-month U.S. dollar deposits determined by the Debenture
Trustee in the following order of priority: (i) the rate (expressed as a
percentage per annum) for U.S. dollar deposits having a three-month maturity
that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date ("Telerate Page 3750" means the display designated as "Page
3750" on the Dow Jones Telerate Service or such other page as may replace Page
3750 on that service or such other service or services as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits); (ii) if
such rate cannot be identified on the related Determination Date, the Debenture
Trustee will request the principal London offices of four leading banks in the
London interbank market to provide such banks' offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date. If at least two quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture Trustee
will request four major New York City banks to provide such banks' offered
quotations (expressed as percentages per annum) to leading European banks for
loans in U.S. dollars as of 11:00 a.m. (London time) on such Determination Date.
If at least two such quotations are provided, 3-Month LIBOR will be the
arithmetic mean of such quotations; and (iv) if fewer than two such quotations
are provided as requested in clause (iii) above, 3-Month LIBOR will be a 3-Month
LIBOR determined with respect to the Distribution Period immediately preceding
such current Distribution Period. If the rate for U.S. dollar deposits having a
three-month maturity that initially appears on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date is superseded on the
Telerate Page 3750 by a corrected rate by 12:00 noon (London time) on such
Determination Date, then the corrected rate as so substituted on the applicable
page will be the applicable 3-Month LIBOR for such Determination Date.

                                      A-1-5
<PAGE>

         "Interest Rate" means for the period beginning on (and including) the
date of original issuance and ending on (but excluding) October 29, 2008 the
rate per annum of 7.70% and for each Distribution Period thereafter, the Coupon
Rate.

         The Interest Rate for any Distribution Period will at no time be higher
than the maximum rate then permitted by New York law as the same may be modified
by United States law.

         All percentages resulting from any calculations on the Capital
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)).

         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, 29, April 29, July 29 and
October 29 of each year, commencing on January 29, 2004. The Debenture Issuer
has the right under the Indenture to defer payments of interest on the
Debentures, so long as no Indenture Event of Default has occurred and is
continuing, by extending the interest payment period for up to 20 consecutive
quarterly periods (each an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below, during which
Extension Period no interest shall be due and payable. During any Extension
Period, interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Distribution Rate in
effect for each such Extension Period, compounded quarterly from the date such
interest would have been payable were it not for the Extension Period, to the
extent permitted by law (such interest referred to herein as "Additional
Interest"). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period the Debenture Issuer shall
pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no Extension Period may
extend beyond the Maturity Date. Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions
thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the payment
of all accrued and unpaid interest and Additional Interest, the Debenture Issuer
may commence a new Extension Period, subject to the foregoing requirements. No
interest or Additional Interest shall be due and payable during an Extension
Period, except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension Period shall bear
Additional Interest. During any Extension Period, Distributions on the Capital
Securities shall be deferred for a period equal to the Extension Period. If
Distributions are deferred, the Distributions due shall be paid on the date that

                                      A-1-6
<PAGE>

the related Extension Period terminates, to Holders of the Capital Securities as
they appear on the books and records of the Trust on the record date immediately
preceding such date. Distributions on the Capital Securities must be paid on the
dates payable (after giving effect to any Extension Period) to the extent that
the Trust has funds available for the payment of such distributions in the
Property Account of the Trust. The Trust's funds available for Distribution to
the Holders of the Capital Securities will be limited to payments received from
the Debenture Issuer. The payment of Distributions out of moneys held by the
Trust is guaranteed by the Guarantor pursuant to the Guarantee.

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

                                      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

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

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

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

         Signature:
                   ----------------------------------

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

         Signature Guarantee:(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, 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.

         THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH SECTION
8.1 OF THE DECLARATION.

         THIS COMMON SECURITY IS IN REGISTERED FORM WITHIN THE MEANING OF
TREASURY REGULATIONS SECTION 1.871-14(c)(1)(i) FOR U.S. FEDERAL INCOME AND
WITHHOLDING TAX PURPOSES.

            Certificate Number C-1       619 Common Securities

                                October 29, 2003

          Certificate Evidencing Fixed/Floating Rate Common Securities

                                       of

                         PXRE Capital Statutory Trust V

         PXRE Capital Statutory Trust V, a statutory trust created under the
laws of the State of Connecticut (the "Trust"), hereby certifies that PXRE Group
Ltd. (the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust (the
"Common Securities"). Subject to the Declaration (as defined below), the Common
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 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 October 29, 2003, among John Modin, Bruce
Byrnes and Jeff Jeffreys, as Administrators, U.S. Bank National Association, as
Institutional Trustee, PXRE Group Ltd., as Sponsor, and the holders from time to
time of undivided beneficial interest in the assets of the Trust including the
designation of the terms of the Common Securities as set forth in Annex I to
such amended and restated declaration, as the same may be amended from time to
time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to the Holder
without charge upon written request to the Sponsor at its principal place of
business.

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

                                     A-2-1
<PAGE>

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

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

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

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

                                               PXRE CAPITAL STATUTORY TRUST V

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

                                     A-2-2

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Common Security will be payable at an
annual rate equal to 7.70% beginning on (and including) the date of original
issuance and ending on (but excluding) October 29, 2008 and at an annual rate
for each successive Distribution Period beginning on (and including) October 29,
2008, and each succeeding Distribution Payment Date, and ending on (but
excluding) the next succeeding Distribution Payment Date (each a "Distribution
Period"), equal to 3-Month LIBOR, determined as described below, plus 3.85% (the
"Coupon Rate"), applied to the stated liquidation amount of $1,000.00 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears will bear interest
thereon compounded quarterly at the Distribution Rate (to the extent permitted
by applicable law). The term "Distributions" as used herein includes cash
distributions and any such compounded distributions and any Additional Sums
payable on the Debentures unless otherwise noted. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. As used herein, "Determination Date" means the date that is
two London Banking Days (i.e., a business day in which dealings in deposits in
U.S. dollars are transacted in the London interbank market) preceding the
commencement of the relevant Distribution Period. In the event that any date on
which a Distribution is payable on this Common Security is not a Business Day,
then a payment of the Distribution payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable. The amount of the Distribution
payable (i) for any Distribution Period commencing on or after the date of
original issuance but before October 29, 2008 will be computed on the basis of a
360-day year of twelve 30-day months, and (ii) for the Distribution Period
commencing on or after October 29, 2008 and each succeeding Distribution Period
will be calculated by applying the Distribution Rate to the stated liquidation
amount outstanding at the commencement of the Distribution Period and
multiplying each such amount by the actual number of days in the Distribution
Period concerned divided by 360.

         "3-Month LIBOR" as used herein, means the London interbank offered
interest rate for three-month U.S. dollar deposits determined by the Debenture
Trustee in the following order of priority: (i) the rate (expressed as a
percentage per annum) for U.S. dollar deposits having a three-month maturity
that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date ("Telerate Page 3750" means the display designated as "Page
3750" on the Dow Jones Telerate Service or such other page as may replace Page
3750 on that service or such other service or services as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits); (ii) if
such rate cannot be identified on the related Determination Date, the Debenture
Trustee will request the principal London offices of four leading banks in the
London interbank market to provide such banks' offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London time) on
such Determination Date. If at least two quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture Trustee
will request four major New York City banks to provide such banks' offered
quotations (expressed as percentages per annum) to leading European banks for
loans in U.S. dollars as of 11:00 a.m. (London time) on such Determination Date.

                                     A-2-3
<PAGE>

If at least two such quotations are provided, 3-Month LIBOR will be the
arithmetic mean of such quotations; and (iv) if fewer than two such quotations
are provided as requested in clause (iii) above, 3-Month LIBOR will be a 3-Month
LIBOR determined with respect to the Distribution Period immediately preceding
such current Distribution Period. If the rate for U.S. dollar deposits having a
three-month maturity that initially appears on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date is superseded on the
Telerate Page 3750 by a corrected rate by 12:00 noon (London time) on such
Determination Date, then the corrected rate as so substituted on the applicable
page will be the applicable 3-Month LIBOR for such Determination Date.

         "Interest Rate" means for the period beginning on (and including) the
date of original issuance and ending on (but excluding) October 29, 2008 the
rate per annum of 7.70% and for each Distribution Period thereafter, the Coupon
Rate.

         The Interest Rate for any Distribution Period will at no time be higher
than the maximum rate then permitted by New York law as the same may be modified
by United States law.

         All percentages resulting from any calculations on the Common
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)).

         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, 29, April 29, July 29 and
October 29 of each year, commencing on January 29, 2004. The Debenture Issuer
has the right under the Indenture to defer payments of interest on the
Debentures, so long as no Indenture Event of Default has occurred and is
continuing, by extending the interest payment period for up to 20 consecutive
quarterly periods (each an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below, during which
Extension Period no interest shall be due and payable. During any Extension
Period, interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Distribution Rate in
effect for each such Extension Period, compounded quarterly from the date such
interest would have been payable were it not for the Extension Period, to the
extent permitted by law (such interest referred to herein as "Additional
Interest"). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period, the Debenture Issuer
shall pay all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no Extension Period may
extend beyond the Maturity Date. Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions
thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the payment
of all accrued and unpaid interest and Additional Interest, the Debenture Issuer
may commence a new Extension Period, subject to the foregoing requirements. No
interest or Additional Interest shall be due and payable during an Extension
Period, except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension Period shall bear
Additional Interest. During any Extension Period, Distributions on the Common
Securities shall be deferred for a period equal to the Extension Period. If

                                     A-2-4
<PAGE>

Distributions are deferred, the Distributions due shall be paid on the date that
the related Extension Period terminates, to Holders of the Common Securities as
they appear on the books and records of the Trust on the record date immediately
preceding such date. Distributions on the Common Securities must be paid on the
dates payable (after giving effect to any Extension Period) to the extent that
the Trust has funds available for the payment of such distributions in the
Property Account of the Trust. The Trust's funds available for Distribution to
the Holders of the Common Securities will be limited to payments received from
the Debenture Issuer.

         The Common Securities shall be redeemable 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

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

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

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

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

         Signature:
                   -------------------------------------------

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

         Signature:
                   -------------------------------------------

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

         Signature Guarantee (2)

--------
(2) 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

                          SPECIMEN OF INITIAL DEBENTURE

<PAGE>

                                    EXHIBIT C

                               PLACEMENT AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]