Document:

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                                                                    EXHIBIT 10.3

                        UNDERWRITING MANAGEMENT AGREEMENT

      This Agreement, entered into as of the 1st day of November, 1989 by and
through National Interstate Insurance Agency, Inc., an Ohio corporation
(together with any affiliated agent and agencies, the "Agent"), and Great
American Insurance Company, an Ohio corporation; Agricultural Insurance Company,
a South Dakota corporation; American Alliance Insurance Company, an Arizona
corporation; and American National Fire Insurance Company, a New York
corporation, (the "Company").

                                    PREAMBLE

      The background of this Agreement is that the Company desires to offer a
program of public transportation insurance on a countrywide basis and that the
Agent, which has developed proprietary public transportation insurance
production, underwriting and claims systems (the "Insurance Program"), desires
to make its services available to the Company. Additionally, the Company and
National Interstate Insurance Company ("NIIC"), which is an affiliate of the
Agent, have entered into certain reinsurance agreements with respect to public
transportation insurance issued, underwritten or serviced for each by the Agent.
Nothing in this Agreement will preclude each of the Company and the Agent and
their affiliates from providing similar coverages in the ordinary course of
business; Provided, however, that the Agent shall not enter into any alternative
licensed risk-sharing program without obtaining the prior written consent of the
Company, which consent will not be unreasonably withheld.

      NOW, THEREFORE, the Company and Agent, in consideration of the mutual
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency whereof is hereby acknowledged, agree as follows:

1.    AGENCY.

1.1   Appointment. The Company does hereby nominate, constitute and appoint
      Agent as its agent (i) for the soliciting, issuing, underwriting and
      servicing of the Company's public transportation insurance program and
      such other forms of property and liability insurance as shall be
      determined by mutual written agreement of the parties from time to time
      (such insurance and any policies, binders, endorsements, or certificates
      for such insurance, individually and collectively, the "Insurance"); and
      (ii) for the servicing of reinsurance treaties or agreements entered into
      by the Company and NIIC covering Insurance policies issued, underwritten,
      or serviced by Agent pursuant to this Agreement (individually and
      collectively, the "Reinsurance Treaties").

1.2   Authority. Agent's authority is subject to (i) the limits specified or
      referenced in Section 4 hereof, (ii) the terms and conditions (including
      exclusions) of any Insurance issued, underwritten, or serviced pursuant to
      this Agreement, (iii) the terms and conditions (including exclusions) of
      any Reinsurance Treaties, (iv) applicable laws, rules, and regulations,
      (v) the instructions, guidelines, and business policies of the Company,
      and (vi) the terms and conditions of this Agreement; Provided, however,
      that the Agent

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      shall not bind any Insurance on behalf of the Company if the Company
      notifies Agent that reinsurance acceptable to the Company does not cover
      such Insurance.

1.3   Performance. Agent hereby accepts the foregoing appointment and agrees
      faithfully to perform the duties thereof in a professional manner as a
      fiduciary of the Company and to obey promptly such reasonable instructions
      as it may receive from time to time from the Company in accordance with
      this Agreement. The Agent will use its best efforts in the administration
      of the Insurance Program, but disclaims any warranty or other
      representation that its action on behalf of the Company under this
      Agreement will produce or secure for the Company any particular
      underwriting result.

1.4   Relationship of the Parties. The parties are independent contractors, each
      having full and exclusive control over the time, personnel, conduct of
      operations, business relationships with other entities, selection of
      persons with which to do business, and the ownership of proprietary
      systems, procedures and programs.

      The Agent reserves the right, in its sole discretion, to provide public
      transportation and other insurance services to or on behalf of NIIC,
      notwithstanding any actual or apparent conflict with its obligations to
      the Company under this Agreement.

      The Company reserves the right to market any and all of its products and
      services directly or indirectly through other advisors, managers, agents,
      brokers or producers at the Company's discretion.

2.    TERRITORY.

      Agent's authority to issue or underwrite Insurance extends to insureds or
prospective insureds located in any State of the United States, subject to
applicable licensing requirements. Agent hereby agrees to obtain such licenses
and that the Company at its discretion may revoke Agent's authority as regards
any particular state.

3.    REPRESENTATIONS AND WARRANTIES.

      On the date hereof, during the term of this Agreement, and indefinitely
thereafter, Agent hereby warrants and represents to Company as follows:

3.1   Laws and Licenses. Agent has and will comply with all applicable laws,
      rules and regulations and, whenever necessary, will obtain and maintain at
      its own expense all licenses required for it to perform this Agreement.

3.2   No Breach. This Agreement is a valid and binding obligation of Agent. The
      execution and delivery of this Agreement and the consummation of the
      transactions contemplated herein, will not breach or conflict with Agent's
      Articles of Incorporation or Regulations or with any agreement, covenant,
      or understanding (oral or written) to which Agent is bound, and will not
      adversely affect the application for issuance or the validity of any
      license of the Agent.

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3.3   Status. Agent is a duly organized and validly existing corporation in the
      State of Ohio.

3.4   No Consents. No consent, approval, registration or filing not made on or
      before the date hereof is required to be made by Agent in connection with
      this Agreement.

3.5   Authorization. The execution, delivery, and performance of this Agreement
      by Agent has been duly and properly authorized.

4.    LIMITS OF LIABILITY.

      Agent is hereby authorized to issue and underwrite, on behalf of the
Company, policies of Insurance in amounts not exceeding the limits indicated in
Schedule A hereto. Any such policy or policies of Insurance shall be covered by
Reinsurance Treaties approved in advance by the Company.

5.    DUTIES OF AGENT.

      Subject to the Company's supervision and instructions, Agent agrees to
perform the following duties and services in addition to those otherwise
enumerated in this Agreement:

      (a)   Underwrite, issue and service Insurance on behalf of the Company in
            compliance with rates and rules filed and adopted by the Company;

      (b)   Collect premiums on all Insurance issued or underwritten by Agent;

      (c)   Cancel Insurance issued or underwritten by Agent;

      (d)   Issue Insurance policies, binders, endorsements, and certificates
            only on forms approved by the Company and filed with and approved by
            regulatory authorities wherever such filing and approval is
            required, unless such forms are modified with the prior written
            consent of the Company;

      (e)   Investigate and settle claims as provided in Section 6 below and
            suggest reserves for such claims;

      (f)   Maintain at Agent's expense an office or offices and a staff of
            employees sufficient in number and qualifications to perform this
            Agreement;

      (g)   Underwrite and issue policies of Insurance in accordance with the
            premium rates and underwriting criteria and guidelines as provided
            in the Agent's pricing model (as may be modified from time to time);

      (h)   Immediately upon collection, deposit in a separate and segregated
            premium trust fund account acceptable to the Company (the "PTF
            Account") any and all monies received by Agent in regard to
            Reinsurance Treaties, Insurance or otherwise payable to or on behalf
            of the Company pursuant to Insurance or Reinsurance Treaties which
            PTF shall be designated by and for the benefit of the Company and
            such monies shall be received by Agent in a fiduciary capacity;
            Provided,

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            however, that the Agent may invest PTF Account monies in accordance
            with applicable law and retain for its own use any earnings thereon;

      (i)   Within thirty days after the end of each month, all premiums then
            due whether or not then collected by the Agent, fronting fees,
            premium taxes, agent compensation, assessment escrow contributions,
            as set forth in the reinsurance agreement between the Company and
            NIIC, and reinsurance premiums on all Insurance shall be distributed
            as interests may appear to the Company, NIIC or the Agent's own
            accounts; Provided, however, that any adjustments and refunds on
            account of return premiums shall be determined on the same basis as
            originally calculated;

      (j)   The Agent will issue Company bonds or other appropriate financial
            responsibility filings for NIIC insureds in jurisdictions in which
            NIIC is not authorized to provide filings. Agent will collect from
            NIIC and remit, as provided in Section 9, to the Company a fee equal
            to three percent (3%) of commercial automobile liability premiums on
            any NIIC policy for which such filing is provided; and

      (k)   The Agent will pay or reimburse the Company for its payments of any
            fine, penalty or similar administrative charge assessed against the
            Company resulting from regulatory enforcement actions premised on or
            connected with the Agent's obligations under this Agreement.

6.    CLAIMS SETTLEMENT AUTHORITY.

6.1   Claims. Agent shall investigate and negotiate and settle all Insurance
      claims and all claims concerning Reinsurance Treaties on behalf of the
      Company. All claims or losses shall be reported by Agent to the Company in
      monthly statements pursuant to Section 9.2 below. In addition, upon
      receiving notice or knowledge of any Insurance claim or loss that involves
      a "serious injury" listed in Schedule B or that is in excess of Fifty
      Thousand Dollars ($50,000.00), Agent shall immediately notify the Company
      in writing of such claim or loss, provide the amount of the reserve for
      such claim as suggested by Agent and such other information and records
      concerning such claim or loss as the Company requests.

      In the event of a termination of the Agreement by the Company for cause as
      specified in Section 10.2(c) or (d), the Company may, in its discretion,
      immediately become responsible for the administration of all claims on
      Insurance provided hereunder.

6.2   Legal Counsel and Claim Adjusters. Whenever Agent shall deem it prudent to
      engage legal counsel or a claim adjuster to protect the Company's interest
      regarding claims or losses, such services shall be provided only by
      qualified attorneys-at-law or claim adjusters selected by Agent that are
      licensed where and as required by applicable law; provided, however, that,
      with respect to any claim or loss of any amount, the Agent shall promptly
      furnish the Company, or its designee, any additional claim or loss
      information requested by the Company with respect to a claim or loss
      pertaining to any Insurance or any Reinsurance Treaty covered by this
      Agreement.

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      With respect to any claim or loss of any amount:

      (a)   The Company may defend or assign an attorney of its own choice to
            defend or be associated in the defense of any claim or loss reported
            to the Company and, at the request of the Company, any attorney
            already employed by Agent shall be terminated by Agent forthwith;
            and

      (b)   In the event that the Company is named as a defendant in any
            lawsuit, Agent shall, as soon as it has notice or knowledge of such
            lawsuit, immediately give written notice thereof to the Company
            accompanied by a copy of the complaint and any court papers related
            to such lawsuit.

6.3   Unallocated Costs. No reimbursement shall be paid by the Company to Agent
      for the salaries, office expenses or other expenses incurred by or on
      behalf of Agent (including overhead) in the handling of the Company's
      claims and losses or for fees of outside attorneys or claim adjusters
      retained to monitor claims generally.

6.4   Records. The Company may at any time during regular business hours at
      Agent's place of business have its employees or representatives review all
      claim servicing files maintained by Agent.

7.    COMPENSATION.

      Agent compensation will be as provided in its agreements with the
      Company's reinsurers.

8.    EXPENSES.

      Agent shall pay all commissions to any agents, sub-agents, brokers and
sub-producers, all inspection fees, all refunds of premium, and all costs to
service claims as stated in Paragraph 6.3 above and all costs to collect
premiums in regard to Insurance policies issued, underwritten or serviced
pursuant to this Agreement. The following reasonable expenses regarding
Insurance policies shall be paid or reimbursed by the Company:

      (a)   All of the Company's home office expenses, including compensation
            and expenses of its employees, officers and directors;

      (b)   Premium taxes, board and bureau fees of the Company;

      (c)   Losses and allocated loss adjustment expenses of the Company,
            including pre-judgment and post-judgment interest; the actual,
            reasonable, and verifiable fees by outside attorneys or claim
            adjusters approved in writing by the Company that are retained by
            Agent in accordance with this Agreement; and the actual, reasonable,
            and verifiable out-of-pocket costs of Agent for the production of
            documents in claim litigation pursuant to this agreement; and

      (d)   Legal, actuarial and accounting fees of the Company.

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9.    REPORTS AND SETTLEMENT OF BALANCES.

9.1   Insurance Reports. Agent shall furnish to the Company an itemized
      Insurance account and report in the form required by the Company within
      thirty (30) days after the close of each month.

9.2   Claims and Loss Reports. Agent shall furnish to the Company an itemized
      monthly claim and loss account and report in the form required by the
      Company within thirty (30) days after the close of each month.

9.3   Remittance Summaries and Payments. Within thirty (30) days after the close
      of each month, the Agent shall provide the Company a remittance summary
      for the month on such form as the parties shall agree.

      The amount due the Company will be attached to said remittance summary. If
      a balance is due Agent, the Company shall pay Agent within fifteen (15)
      days thereafter.

9.4   Special Remittance. If, at any time, Agent determines that Insurance
      Premiums on hand are not sufficient to pay current losses, Agent may
      request a special remittance from the Company, which request shall be
      supported by a detailed accounting of all losses and of the Insurance
      Premiums on hand, the amount of such special remittance, and any other
      information the Company requests. The Company shall pay such remittance to
      Agent after it has reviewed and in the event it approves such accounting
      and information. Agent shall credit the Company in the monthly reports and
      accounts in which the special remittance was received by the Agent recited
      above with the loss amount so paid by special remittance. To the maximum
      extent feasible, special remittance requests will be coordinated with
      reinsurance recoverables.

9.5   Accounts. All monies received by Agent shall be held by Agent in a
      fiduciary capacity as trustee for the Company on the PTF Account. The
      keeping of an account between Agent and Company in any form is to be
      deemed a record of business transacted.

10.   TERM AND TERMINATION.

10.1  Term. This Agreement shall be effective as of the date first above written
      and shall continue in full force and effect until terminated as
      provided below.

10.2  Termination. This Agreement may be terminated as provided below:

      (a)   This Agreement shall terminate on December 31, 1994 or on any
            subsequent December 31st only upon at least ninety (90) days prior
            written notice by either party to the other party hereto. Either
            party at any time can revoke any notice of termination it sends to
            the other with the result that such notice will have no force or
            effect;

      (b)   If any law or regulation of the federal or state or local government
            of any jurisdiction in which Agent is doing business shall render
            illegal or invalid any

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            transaction contemplated by this Agreement or any term of this
            Agreement, the Agreement may be terminated immediately insofar as it
            applies to such jurisdiction by the Company giving notice to Agent
            to such effect or by Agent giving notice to the Company to such
            effect;

      (c)   This Agreement, at the option of Agent or the Company may be
            terminated immediately at any time, upon notice by the party not
            described below to the other party following (i) the assignment by
            the Agent of all or any part of its assets for benefit of creditors,
            the filing of any voluntary petition to declare Agent to be
            bankrupt, or the lapse of a period of Sixty (60) consecutive days
            after the filing of any involuntary petition to declare Agent to be
            bankrupt during which period such proceeding continues undismissed
            and unstayed; (ii) liquidation, rehabilitation, or conservation of
            the Company; or (iii) the breach of this Agreement by a party that
            is not cured within ten (10) days after written notice specifying
            such breach; and

      (d)   This Agreement may be terminated immediately at any time upon notice
            by the Company to the Agent following: (i) the termination of any
            Reinsurance Treaty for any reason when in the Company's judgment the
            reinsurance provided thereby cannot promptly be replaced by
            reinsurance acceptable to the Company; or, (ii) if the Agent shall,
            for any reason, no longer have the services of Alan R. Spachman as
            its Chief Executive Officer.

10.3  Limitations on Agent. If at any time the Company sends a notice of
      termination to Agent as provided in Section 10.2 above or the Agreement is
      otherwise terminated as provided herein, Agent shall not issue or
      underwrite any Insurance or renew any existing Insurance for which the
      inception date or renewal date falls after the effective date of
      termination of this Agreement.

10.4  Survival. Unless otherwise indicated by this Agreement, Agent's
      obligations under this Agreement shall survive termination of this
      Agreement until such time as all Insurance issued, underwritten or
      serviced by Agent pursuant to this agreement has expired and all
      Reinsurance Treaties have expired, and all known and unknown claims
      thereunder have been paid or settled, have runoff or otherwise have been
      disposed of in the judgment of the Company and any amounts owed to the
      Company by any Reinsurers or others in regard to any claims have been
      collected by the Company. The only compensation Agent shall receive for
      its performance of its duties hereunder (both during of after the term of
      this Agreement) is set forth in Section 7 above.

10.5  Ownership of Expirations. The use and control of expirations, including
      the records and all Agent work product thereof, shall remain in the
      undisputed ownership of the Agent and the Company shall not use its
      records of those expirations in any marketing method for the sale, service
      or renewal of any form of insurance coverage that would abridge the
      Agent's rights to ownership, use and control of those expirations nor
      shall the Company communicate this expiration information to any other
      agent or broker; Provided,

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      however, if the Agreement shall be terminated by the Company for cause as
      specified in Section 10.2(c) or (d), the use and control of expirations
      will vest in the Company.

11.   BOOKS AND RECORDS.

      Agent shall at its own expense keep such books and records as may be
required by law, rulings, or orders of the insurance departments of the states
having jurisdiction over Agent or Agent's business or over any Insurance or
reinsurance connected with this Agreement and also as reasonably requested by
the Company, and shall make such books and records available for examination,
audit, and copying by the insurance departments of such states and by the
Company, or by their authorized representatives. The Company shall have the
right to examine and review at any reasonable time all books, records, files and
papers, including, but not by way of limitation, claim files and underwriting
files, maintained and kept by Agent that relate to this Agreement, Insurance or
Reinsurance Treaties. Agent shall institute and maintain retention and disposal
systems for claim files and underwriting files in accordance with procedures and
requirements the Company may prescribe in writing from time to time. All books
and records of the Agent shall be maintained at the principal place of business
of Agent and shall be complete, accurate, and up-to-date, and shall reflect all
monies paid or received by Agent and all transactions of Agent pursuant to this
Agreement. Anything to the contrary notwithstanding, all of the books, records,
files, and papers above referenced shall be and remain the sole and exclusive
property of the Agent except that (i) Company shall be entitled to keep and
retain copies thereof during the term of this Agreement and thereafter but
subject to Section 12 below; provided, however, that such copies do not contain
confidential or proprietary information as set forth in Section 12 below, and
(ii) Agent shall own all expirations and renewals of Insurance as set forth in
Section 10.5. Company, at its expense, shall have a reasonable period of time
not exceeding sixty (60) days after the termination of this Agreement to make
copies of the aforesaid books, records, files and papers.

12.   CONFIDENTIALITY.

      The parties agree never to use (except to perform this Agreement) or
disclose to others any confidential or proprietary information of the other
including, without limitation, Insurance Program production, underwriting and
pricing materials produced by or developed for the Agent; Provided, however,
that such information may be disclosed pursuant to the lawful order of any
governmental authority. At the request of the other party, any Insurance Program
books and records that are not reasonably needed to fulfill obligations that
survive termination of this Agreement ("Nonessential Files") will be destroyed
or turned over to the other party. Copies of all books and records other than
Nonessential Files shall be supplied as requested by the other party.

13.   SET-OFF.

      With respect to obligations hereunder, any party hereto shall have the
right to reduce and set-off any monies payable to any other party hereto by the
amount of any monies such party owes to the party exercising such reduction and
set-off rights.

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14.   INDEMNIFICATION.

      Each party hereto (the "Indemnitor") shall indemnify and hold harmless the
other party hereto and its designees (the "Indemnitees") from and against all
losses, damages, costs, expenses, claims, or liabilities of any description
suffered by the Indemnitees which regard the Indemnitor as indicated below
including, without limitation, any attorney's fees in connection with or arising
out of (i) any allegations, whether or not such allegations are groundless, that
the Indemnitor has not complied with any laws, rules, or regulations to which it
is subject, (ii) any breach of any warranty or representation of Indemnitor made
in this Agreement or any other unremedied breach of this Agreement by
Indemnitor, or (iii) any alleged misconduct, negligence, misrepresentation, or
other acts or failures to act of the Indemnitor or of its officers, directors,
employees, agents (except Agent in the event that the Indemnitor is the
Company), or independent contractors. For purposes of this Section 14, an
"unremedied breach" shall be a breach by the Indemnitor of this Agreement that
is not cured within thirty (30) days after written notice by the Indemnitees to
the Indemnitor.

15.   ARBITRATION.

      All disputes or controversies arising out of or in connection with this
Agreement, if not resolved by the parties, must be submitted to final and
binding arbitration in accordance with the rules of the American Arbitration
Association at Columbus, Ohio or as may be agreed. Such arbitration shall use
Ohio law in arriving at a decision. Each party shall pay those costs it incurs
pursuant to such arbitration.

16.   NOTICES.

      All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally with receipt acknowledged or sent by registered or
certified mail or equivalent, if available, postage prepaid or by telex of
cablegram, addressed to the parties at the following address or to such other
additional addresses any party shall hereafter specify by Notice to the other
parties:

     If to the Company:           Great American Insurance Company
                                     P.O. Box 2575
                                     Cincinnati, Ohio 45201

                                     Attention:  Richard M. Haverland

     To Agent:                    National Interstate Insurance Agency, Inc.
                                     6060 Rockside Woods Blvd.
                                     Suite 220
                                     Cleveland, Ohio 44131-2317

                                     Attention: Alan R. Spachman

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      Except as otherwise expressly provided herein, all notices hereunder shall
be deemed to have been duly given, received and dated on the date when delivered
personally, one day after being sent by cablegram or telex or three days after
mailing.

17.   ERRORS AND OMISSIONS INSURANCE.

      While this Agreement is in effect, the Agent will maintain a policy of
errors and omissions insurance satisfactory to the Company that provides limits
of at least $1,000,000 per occurrence/$1,000,000 aggregate and the Agent will
immediately notify the Company of any change in coverage terms, conditions or
limits.

18.   GENERAL.

18.1  Assignment. Neither this Agreement nor any duties hereunder may be
      assigned, subcontracted (except in the ordinary course of business), or
      transferred, including an assignment or transfer by operation of law,
      without the prior written consent of the other party.

18.2  Third Parties. The rights and privileges afforded by this Agreement are
      solely for the benefit of the parties hereto and in no circumstances shall
      any other person or entity have any rights or privileges or be entitled to
      any benefits under this Agreement.

18.3  Amendments. This Agreement may be amended or modified only by the
      execution by the parties hereto of a document setting forth such amendment
      or waiver.

18.4  Waiver. The failure of any party at any time to require performance of any
      provision hereof shall in no manner affect its right at a later time to
      enforce the same, and no waiver of any nature by any party, whether by
      conduct or otherwise, shall be deemed to be a continuing waiver.

18.5  Entire Agreement. This Agreement sets forth the sole and entire agreement
      and understanding of the parties in respect of the transactions
      contemplated hereby.

18.6  Choice of Law. This Agreement shall be governed by and construed and
      enforced in accordance with the laws of Ohio.

18.7  Severability. If any one of the provisions contained in this Agreement or
      in any document executed in connection herewith shall be or become
      invalid, illegal or unenforceable in any respect under any applicable law,
      the validity, legality and enforceability of the remaining provisions
      contained herein or therein shall not in any way be affected or impaired;
      provided, however, that in such case the parties shall achieve the purpose
      of the invalid provision which shall become part of this Agreement or such
      document.

18.8  Captions. The captions and headings used to identify Sections herein shall
      not be used to interpret this Agreement.

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18.9  Preamble. The Preamble is part of this Agreement.

      IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Agreement as of the day and year first indicated above.

                                    GREAT AMERICAN INSURANCE COMPANY

                                    By: /s/ Karen Holley Horrell
                                        ------------------------

Attest:______________________

                                    AGRICULTURAL INSURANCE COMPANY

                                    By: /s/ Karen Holley Horrell
                                        ------------------------

Attest:______________________

                                    AMERICAN ALLIANCE INSURANCE COMPANY

                                    By: /s/ Karen Holley Horrell
                                        ------------------------

Attest:______________________

                                    AMERICAN NATIONAL FIRE INSURANCE COMPANY

                                    By: /s/ Karen Holley Horrell
                                        ------------------------

Attest:______________________

                                    NATIONAL INTERSTATE INSURANCE AGENCY, INC.

                                    By: /s/ Alan Spachman
                                        ------------------------

Attest:______________________

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                                   SCHEDULE A

COMMERCIAL AUTO LIABILITY           - UP TO TEN MILLION DOLLARS
                                    ($10,000,000.00) PER OCCURRENCE*

COMMERCIAL GENERAL LIABILITY        - UP TO TEN MILLION DOLLARS
                                    ($10,000,000.00) PER OCCURRENCE*

AUTO PHYSICAL DAMAGE                - UP TO ONE MILLION DOLLARS
                                    ($1,000,000.00) PER OCCURRENCE*

* Limits in excess of Five Million Dollars ($5,000,000.00) liability coverage
and One Million Dollars ($1,000,000.00) physical damage shall be facultatively
placed with assuming reinsurers that shall have been approved by the Company,
with notice immediately to the Company.

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                                   SCHEDULE B

      Serious injuries, for purposes of Section 6.1, shall be any of the
      following:

      1.    Spinal Cord injury - paraplegia, quadriplegia;

      2.    Amputation - requiring a prosthesis;

      3.    Brain damage affecting mentality or central nervous system such as
            permanent disorientation, behavior disorder, personality change,
            seizures, motor deficit, inability to speak (aphasia), hemiplegia or
            unconsciousness (comatose);

      4.    Blindness;

      5.    Burns involving over 10% of body with third degree or 30% of body
            with second degree;

      6.    Multiple fractures involving more than one member or non-union;

      7.    Fracture of both heel bones (fractured bilateral os calcis);

      8.    Nerve damage causing paralysis and loss of sensation in arm and hand
            (brachial plexus nerve damage) or in leg and foot;

      9.    Massive internal injuries affecting body organs;

      10.   Injury to nerves at base of spinal canal (Cauda Equina) or any other
            back injury resulting in incontinence of bowel and/or bladder; and

      11.   Fatalities.

      The Company at its discretion, by written notice to the Agent, may
      prospectively amend Schedule B by adding or deleting specific types of
      injuries.

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                        UNDERWRITING MANAGEMENT AGREEMENT

      The following wholly-owned subsidiaries of Great American Insurance
Company are hereby designated added parties to the Underwriting Management
Agreement dated as of November 1, 1989 by Great American Insurance Company and
National Interstate Insurance Agency, Inc.:

                  AGRICULTURAL EXCESS AND SURPLUS INSURANCE COMPANY

                  AGRICULTURAL INSURANCE COMPANY

                  AMERICAN ALLIANCE INSURANCE COMPANY

                  AMERICAN NATIONAL FIRE INSURANCE COMPANY

                                            GREAT AMERICAN INSURANCE COMPANY

                                            By: /s/ Karen Holley Horrell
                                                ------------------------

<PAGE>

                        UNDERWRITING MANAGEMENT AGREEMENT

                                 AMENDMENT NO. 1

      The first paragraph of the Underwriting Management Agreement dated as of
the 1st day of November, 1989 by and through the undersigned is hereby amended
to read as follows:

            This Agreement, entered into as of the 1st day of November, 1989 by
      and through National Interstate Insurance Agency, Inc., an Ohio
      corporation (together with any affiliated agent and agencies, the
      "Agent"), and Great American Insurance Company, an Ohio corporation
      (together with any wholly-owned subsidiaries that upon designation by
      Great American become added parties, the "Company").

      IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Agreement as of the day and year first indicated above.

                                      GREAT AMERICAN INSURANCE COMPANY

                                      By: /s/ Karen Holley Horrell
                                          ------------------------
                                          Senior Vice President

Attest: /s/ Eve Cutler Rosen
        --------------------
                                      AGRICULTURAL INSURANCE COMPANY

                                      By: /s/ Karen Holley Horrell
                                          ------------------------
                                          Senior Vice President

Attest: /s/ Eve Cutler Rosen
        --------------------
                                      AMERICAN ALLIANCE INSURANCE COMPANY

                                      By: /s/ Karen Holley Horrell
                                          ------------------------
                                          Senior Vice President

Attest: /s/ Eve Cutler Rosen
        --------------------
                                      AMERICAN NATIONAL FIRE INSURANCE COMPANY

                                      By: /s/ Karen Holley Horrell
                                          ------------------------
                                          Senior Vice President

Attest: /s/ Eve Cutler Rosen
        --------------------
                                      NATIONAL INTERSTATE INSURANCE AGENCY, INC.

                                      By: /s/ Alan Spachman
                                          ------------------------

Attest: /s/ J. Gilbert Stallings
        ------------------------

<PAGE>

                        UNDERWRITING MANAGEMENT AGREEMENT

                                 AMENDMENT NO. 2

      The Underwriting Management Agreement dated as of the 1st day of November,
1989 by and through the undersigned is hereby amended by the addition of a new
section 19, as follows:

19.   ADDITIONAL SERVICES.

      The Agent will provide additional statistical information to the Company
      in accordance with the Company's agreed upon requirements for which the
      Company will provide expense reimbursement of $875 per month, which amount
      will be subject to adjustment as may be agreed upon to reflect cost
      changes.

      This amendment will be in effect as of October 1, 1990.

      IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Agreement as of the 1st day of October, 1990.

                                    GREAT AMERICAN INSURANCE COMPANY

                                    By: /s/ Karen Holley Horrell
                                        ------------------------

Attest: /s/ Eve Cutler Rosen
        --------------------
                                    NATIONAL INTERSTATE INSURANCE AGENCY, INC.

                                    By: /s/ Alan Spachman
                                        ------------------------

Attest: /s/ J. Gilbert Stallings
        ------------------------

<PAGE>

                        UNDERWRITING MANAGEMENT AGREEMENT

                                 AMENDMENT NO. 3

The Underwriting Management Agreement dated as of the 1st date of November,
1989, by and through the undersigned is hereby amended as follows:

Paragraph 5 (i) is deleted and replaced with the following:

      (i)   Within thirty (30) days after the end of each month, all premiums
            written, whether or not then collected by the Agent, fronting fees,
            premium taxes, agent compensation, assessment escrow contributions,
            as set forth in the reinsurance agreement between the Company and
            NIIC, and reinsurance premiums on all Insurance shall be distributed
            as interests may appear to the Company, NIIC or the Agent's own
            account; provided however that settlement shall be reduced by
            multiplying the sum of the written premiums (net of management fee
            and reinsurance premiums), fronting fees and premium tax monies for
            the month being settled by 150/360 (the average premium collection
            period, in days) of the published rate for 150/179 day Commercial
            paper placed directly by GE Capital Corporation on the last working
            day of the month being settled, such rate to be found in The Wall
            Street Journal Money Rates column; and provided further, that any
            adjustments and refunds on account of return premiums shall be
            determined on the same basis as originally calculated. The factor
            representing the average premium collection period, which is herein
            designated as 150/360, will be reset annually beginning in January
            1996, with a factor mutually agreed upon by the parties.

      Article 16 is deleted and replaced with the following:

      16.   NOTICES.

      All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally with receipt acknowledged or sent by registered or
certified mail or equivalent, if available, postage prepaid or by telex or
cablegram, addressed to the parties at the following address or to such other
additional addresses any party shall hereafter specify by Notice to the other
parties:

If to the Company:                    Great American Insurance Company
                                      Attention:  Donald D. Larson
                                      580 Walnut Street
                                      Cincinnati, Ohio  45202

with a copy to:                       Great American Insurance Company
                                      Attention: General Counsel
                                      580 Walnut Street
                                      Cincinnati, Ohio 45202

<PAGE>

      To Agent:                   National Interstate Insurance Agency, Inc.
                                  Attention:  Alan R. Spachman
                                  6060 Rockside Woods Blvd., Suite 220
                                  Cleveland, Ohio  44131-2317

      Except as otherwise expressly provided herein, all notices hereunder shall
be deemed to have been duly given, received and dated on the date when delivered
personally, one day after being sent by cablegram or telex or three days after
mailing.

This Amendment is effective January 1, 1995.

IN WITNESS WHEREOF, the duly authorized representatives of the parties have
executed this Agreement as of the 1st day of January, 1995.

                                      GREAT AMERICAN INSURANCE COMPANY

                                      BY: /s/ Roger Smith
                                          ---------------
                                          Name: Roger Smith
                                          Title: Vice President

ATTEST:

BY: _________________________

                                      NATIONAL INTERSTATE INSURANCE AGENCY, INC.

                                      BY: /s/ Alan Spachman
                                          -----------------
                                          Name: Alan Spachman
                                          Title: President

ATTEST:

BY: /s/ Dawn A. Pasek
    -------------------------

<PAGE>

This Amendment is attached to and incorporated in the November 1, 1989
Underwriting Management Agreement among National Interstate Insurance Agency,
Inc. (the "Agent") and Great American Insurance Company, Agricultural Insurance
Company, Agricultural Excess and Surplus Insurance Company, American Alliance
Insurance Company, American National Fire Insurance Company, Seven Hills
Insurance Company and Stonewall Surplus Lines Insurance Company (collectively,
the "Company"). This Amendment shall be effective as of July 1, 1995.

The Agreement is amended as follows:

1.    The following are added as paragraphs (l) and (m) to Section 5:

      "(l)  Within thirty (30) days after the end of each month, policy
            documents, including declaration pages, account information sheets
            with premium broken down by class code and auto type, vehicle
            schedules and reinsurance reports will be provided to Company; and

      "(m)  Monthly, claims documents, including loss draft copies, green bar
            and deductible information and such reinsurance reserve information
            as is requested by Company and reasonably obtainable by Reinsurer
            will be provided to Company."

2.    Agent's address in Section 16 is deleted and replaced with:

      "National Interstate Insurance Company
      29325 Chagrin Boulevard
      Cleveland, Ohio  44122-4613
      Attention:  Alan R. Spachman"

3.    Schedule A is deleted in its entirety and replaced with the attached
      Amended Schedule A.

      Except as modified by this Amendment, the terms of the Underwriting
      Management Agreement remain unchanged.

                             National Interstate Insurance Agency, Inc.

                             By: /s/ Alan Spachman
                                 -----------------

                             Great American Insurance Company

                             By: /s/ Donald D. Larson
                                 ---------------------

<PAGE>

                             Agricultural Insurance Company

                             By: /s/ Donald D. Larson
                                 ---------------------

                             Agricultural Excess and Surplus Insurance Company

                             By: /s/ Donald D. Larson
                                 --------------------

                             American Alliance Insurance Company

                             By: /s/ Donald D. Larson
                                 --------------------

                             American National Fire Insurance Company

                             By: /s/ Donald D. Larson
                                 --------------------

                             Seven Hills Insurance Company

                             By: /s/ Donald D. Larson
                                 --------------------

                             Stonewall Surplus Lines Insurance Company

                             By: /s/ Donald D. Larson
                                 --------------------

<PAGE>

                               AMENDED SCHEDULE A
                             EFFECTIVE JULY 1, 1995

Commercial Auto Liability             -  Up to Twenty-Five Million Dollars
                                      ($25,000,000) Per Occurrence*

Commercial General Liability          -  Up to Twenty-Five Million Dollars
                                      ($25,000,000) Per Occurrence*

Auto Physical Damage                  -  Up to One Million Dollars
                                      ($1,000,000) Per Occurrence*

* Limits in excess of Five Million Dollars ($5,000,000) liability coverage and
One Million Dollars ($1,000,000) physical damage shall be facultatively placed
with assuming reinsurers that shall have been approved by the Company, with
notice immediately to the Company.

<PAGE>

                        UNDERWRITING MANAGEMENT AGREEMENT

                                  AMENDMENT #5

This Amendment is attached to and incorporated in the November 1, 1989
Underwriting Management Agreement among National Interstate Insurance Agency,
Inc. (the "Agent") and Great American Insurance Company, Agricultural Insurance
Company, Agricultural Excess and Surplus Insurance Company, American Alliance
Insurance Company, American National Fire Insurance Company, Seven Hills
Insurance Company and Stonewall Surplus Lines Insurance Company (collectively,
the "Company"). This Amendment shall be effective as of March 1, 1996.

The Agreement is amended as follows:

1.    Amended Schedule A, Effective July 1, 1995 is deleted and replaced with
      Amended Schedule A, Effective March 1, 1996.

Except as modified by this Amendment, the terms of the Underwriting Management
Agreement remain unchanged.

                             National Interstate Insurance Agency, Inc.

                             By: /s/ Alan Spachman
                                 -----------------

                             Great American Insurance Company
                             Agricultural Insurance Company
                             Agricultural Excess and Surplus Insurance Company
                             American Alliance Insurance Company
                             American National Fire Insurance Company
                             Seven Hills Insurance Company
                             Stonewall Surplus Lines Insurance Company

                             By: /s/ Donald D. Larson
                                 --------------------

<PAGE>

                        UNDERWRITING MANAGEMENT AGREEMENT
                               AMENDED SCHEDULE A
                             EFFECTIVE MARCH 1, 1996

This Amended Schedule A replaces the July 1, 1995 Amended Schedule A, effective
March 1, 1996.

Commercial Auto Liability             -  Up to Twenty-Five Million Dollars
                                         ($25,000,000) Per Occurrence*

Commercial General Liability          -  Up to Twenty-Five Million Dollars
                                         ($25,000,000) Per Occurrence*

Auto Physical Damage                  -  Up to One Million Dollars
                                         ($1,000,000) Per Occurrence*

Recreation Vehicle                    -  Up to Two Million Dollars
                                         ($2,000,000) Per Occurrence

Workers' Compensation                 -  Statutory Limits

* Limits in excess of Five Million Dollars ($5,000,000) liability coverage and
One Million Dollars ($1,000,000) physical damage shall be facultatively placed
with assuming reinsurers that shall have been approved by the Company, with
notice immediately to the Company.

<PAGE>

                        UNDERWRITING MANAGEMENT AGREEMENT
                                  AMENDMENT #6

This Amendment is attached to and incorporated in the November 1, 1989
Underwriting Management Agreement among National Interstate Insurance Agency,
Inc. (the "Agent") and Great American Insurance Company, Great American Alliance
Insurance Company, Great American Assurance Company, Great American E & S
Insurance Company, Great American Fidelity Insurance Company and Great American
Insurance Company of New York (collectively, the "Company"). This Amendment
shall be effective as of February 1, 2003.

The Agreement is amended as follows:

1.    Amended Schedule A, effective March 1, 1996 is deleted and replaced with
      Amended Schedule A, effective February 1, 2003.

2.    Agent's address in Section 16 as amended on March 1, 1996 is deleted and
      replaced with:

                  National Interstate Insurance Agency, Inc.
                  3250 Interstate Drive
                  Richfield, Ohio 44286-9000

Except as modified by this Amendment, the terms of the Underwriting Management
Agreement remain unchanged.

                             National Interstate Insurance Agency, Inc.

                             By: /s/ Alan Spachman
                                 -----------------
                                  Alan Spachman
                             Its: President

                             Great American Insurance Company
                             Great American Alliance Insurance Company
                             Great American Assurance Company
                             Great American E & S Insurance Company
                             Great American Fidelity Insurance Company
                             Great American Insurance Company of New York

                             By: /s/ Ronald C. Hayes
                                 -------------------
                                  Ronald C. Hayes
                             Its: Assistant Vice President

<PAGE>

                        UNDERWRITING MANAGEMENT AGREEMENT
                               AMENDED SCHEDULE A
                           EFFECTIVE FEBRUARY 1, 2003

Effective February 1, 2003, this Amended Schedule A replaces the March 1, 1996
Amended Schedule A.

Commercial Auto Liability             -  Up to Twenty-Five Million
                                         ($25,000,000) Per Occurrence*

Commercial General Liability          -  Up to Twenty-Five Million Dollars
                                         ($25,000,000) Per Occurrence*

Auto Physical Damage                  -  Up to One Million Dollars
                                         ($1,000,000) Per Occurrence*

Recreation Vehicle                    -  Up to Two Million Dollars
                                         ($2,000,000) Per Occurrence*

Workers' Compensation                 -  Statutory Limits

Surety                                -  Up to One Million Dollars
                                         ($1,000,000) Per Occurrence

* Limits in excess of Five Million ($5,000,000) liability coverage and One
Million Dollars ($1,000,000) physical damage shall be facultative placed with
assuming reinsurers that shall have been approved by the Company, with notice
immediately to the Company.<PAGE>

                                                                    EXHIBIT 10.5

                    AMENDED AND RESTATED DECLARATION OF TRUST

                                       OF

                       NATIONAL INTERSTATE CAPITAL TRUST I

                            Dated as of May 22, 2003

<PAGE>

                                TABLE OF CONTENTS

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

SECTION 1.1.   Definitions .....................................................................     1

                                              ARTICLE II
                                             ORGANIZATION

SECTION 2.1.   Name.............................................................................     9
SECTION 2.2.   Office ..........................................................................     9
SECTION 2.3.   Purpose..........................................................................    10
SECTION 2.4.   Authority........................................................................    10
SECTION 2.5.   Title to Property of the Trust ..................................................    10
SECTION 2.6.   Powers and Duties of the Trustees and the Administrators.........................    10
SECTION 2.7.   Prohibition of Actions by the Trust and the Trustees.............................    15
SECTION 2.8.   Powers and Duties of the Institutional Trustee...................................    16
SECTION 2.9.   Certain Duties and Responsibilities of the Trustees and the Administrators.......    17
SECTION 2.10.  Certain Rights of Institutional Trustee..........................................    19
SECTION 2.11.  Delaware Trustee ................................................................    21
SECTION 2.12.  Execution of Documents...........................................................    22
SECTION 2.13.  Not Responsible for Recitals or Issuance of Securities ..........................    22
SECTION 2.14.  Duration of Trust ...............................................................    22
SECTION 2.15.  Mergers .........................................................................    22

                                             ARTICLE III
                                               SPONSOR

SECTION 3.1.   Sponsor's Purchase of Common Securities .........................................    24
SECTION 3.2.   Responsibilities of the Sponsor..................................................    24

                                              ARTICLE IV
                                     TRUSTEES AND ADMINISTRATORS

SECTION 4.1.   Number of Trustees...............................................................    24
SECTION 4.2.   Delaware Trustee ................................................................    25
SECTION 4.3.   Institutional Trustee; Eligibility...............................................    25
SECTION 4.4.   Administrators ..................................................................    26
SECTION 4.5.   Appointment, Removal and Resignation of the Trustees and the Administrators......    26
SECTION 4.6.   Vacancies Among Trustees.........................................................    28
SECTION 4.7.   Effect of Vacancies..............................................................    28
SECTION 4.8.   Meetings of the Trustees and the Administrators .................................    28
SECTION 4.9.   Delegation of Power .............................................................    29
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                 <C>
SECTION 4.10.  Merger, Conversion, Consolidation or Succession to Business .....................    29

                                              ARTICLE V
                                            DISTRIBUTIONS

SECTION 5.1.   Distributions....................................................................    29

                                              ARTICLE VI
                                        ISSUANCE OF SECURITIES

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

                                              ARTICLE VII
                                 DISSOLUTION AND TERMINATION OF TRUST

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

                                             ARTICLE VIII
                                        TRANSFER OF INTERESTS

SECTION 8.1.   General..........................................................................    35
SECTION 8.2.   Transfer Procedures and Restrictions.............................................    36
SECTION 8.3.   Deemed Security Holders .........................................................    39

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

SECTION 9.1.   Liability........................................................................    39
SECTION 9.2.   Exculpation .....................................................................    40
SECTION 9.3.   Fiduciary Duty ..................................................................    40
SECTION 9.4.   Indemnification..................................................................    41
SECTION 9.5.   Outside Businesses ..............................................................    44
SECTION 9.6.   Compensation; Fee ...............................................................    44

                                              ARTICLE X
                                              ACCOUNTING

SECTION 10.1.  Fiscal Year .....................................................................    45
SECTION 10.2.  Certain Accounting Matters.......................................................    45
SECTION 10.3.  Banking..........................................................................    46
SECTION 10.4.  Withholding .....................................................................    46
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                                 <C>
                                              ARTICLE XI
                                       AMENDMENTS AND MEETINGS

SECTION 11.1.  Amendments ......................................................................    46
SECTION 11.2.  Meetings of the Holders of the Securities; Action by Written Consent.............    48

                                             ARTICLE XII
                               REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
                                         AND DELAWARE TRUSTEE

SECTION 12.1.  Representations and Warranties of Institutional Trustee..........................    50
SECTION 12.2.  Representations and Warranties of Delaware Trustee...............................    50

                                             ARTICLE XIII
                                            MISCELLANEOUS

SECTION 13.1.  Notices .........................................................................    51
SECTION 13.2.  Governing Law ...................................................................    53
SECTION 13.3.  Submission to Jurisdiction.......................................................    53
SECTION 13.4.  Intention of the Parties.........................................................    53
SECTION 13.5.  Headings ........................................................................    53
SECTION 13.6.  Successors and Assigns ..........................................................    53
SECTION 13.7.  Partial Enforceability ..........................................................    54
SECTION 13.8.  Counterparts.....................................................................    54
</TABLE>

                              ANNEXES AND EXHIBITS

ANNEX I        Terms of Capital Securities and Common Securities

EXHIBIT A-1    Form of Capital Security

EXHIBIT A-2    Form of Common Security Certificate

EXHIBIT B      Form of Transferee Certificate to be Executed by Transferees
               Other than QIBS

EXHIBIT C      Form of Transferor Certificate to be Executed for QIBS

EXHIBIT D      Form of Officers' Certificate

                                       iii
<PAGE>

                    AMENDED AND RESTATED DECLARATION OF TRUST

                                       OF

                       NATIONAL INTERSTATE CAPITAL TRUST I

                                  May 22, 2003

            AMENDED AND RESTATED DECLARATION OF TRUST (as amended or
supplemented from time to time in accordance with the terms hereof, this
"Declaration"), dated and effective as of May 22, 2003, by the Trustees (as
defined herein), the Administrators (as defined herein), the Sponsor (as defined
herein) and the holders from time to time of undivided beneficial interests in
the assets of the Trust (as defined herein) to be issued pursuant to this
Declaration.

            WHEREAS, certain of the Trustees and the Sponsor established
National Interstate Capital Trust I (the "Trust"), a statutory trust under the
Statutory Trust Act (as defined herein), pursuant to a Declaration of Trust,
dated as of May 12, 2003 (the "Original Declaration"), and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on May 12,
2003, for the sole purpose of issuing and selling the Securities (as defined
herein) representing undivided beneficial interests in the assets of the Trust,
investing the proceeds thereof in the Debentures (as defined herein) of the
Debenture Issuer (as defined herein) and engaging in those activities necessary,
advisable or incidental thereto;

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

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

            NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory trust under the Statutory Trust Act and that
this Declaration constitutes the governing instrument of such statutory trust,
and that all assets contributed to the Trust will be held in trust for the
benefit of the holders, from time to time, of the Securities, subject to the
provisions of this Declaration, and, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, intending to be legally bound hereby, amend
and restate in its entirety the Original Declaration and agree as follows:

                                    ARTICLE I
                         INTERPRETATION AND DEFINITIONS

            SECTION 1.1. Definitions. Unless the context otherwise requires:

<PAGE>

            (a) capitalized terms used in this Declaration but not defined in
the preamble above or elsewhere herein have the respective meanings assigned to
them in this Section 1.1 or, if not defined in this Section 1.1 or elsewhere
herein, in the Indenture;

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

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

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

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

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

            "Additional Interest" has the meaning set forth in Section 3.06 of
the Indenture.

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

            "Administrators" means each of Alan R. Spachman, Gary N. Monda and
Michael A. Schroeder, solely in such Person's capacity as Administrator of the
Trust continued hereunder and not in such Person's individual capacity, or such
Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.

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

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

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

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

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

                                       2
<PAGE>

similar official of such Person or of any substantial part of its property, or
makes any general assignment for the benefit of creditors, or fails generally to
pay its debts as they become due.

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

            "Calculation Agent" has the meaning set forth in Section 1.01 of the
Indenture.

            "Capital Securities" has the meaning set forth in Section 6.1(a).

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

            "Certificate" means any certificate evidencing Securities.

            "Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended and restated from time to time.

            "Closing Date" has the meaning set forth in the Placement Agreement.

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

            "Commission" means the United States Securities and Exchange
Commission.

            "Common Securities" has the meaning set forth in Section 6.1(a).

            "Common Security Certificate" means a definitive Certificate
registered in the name of the Holder representing a Common Security
substantially in the form of Exhibit A-2.

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

            "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 at any particular time its corporate trust business shall be
principally administered, which at all times shall be located within the United
States and at the time of execution of this Declaration

                                       3
<PAGE>

shall be Rodney Square North, 1100 North Market Street, Wilmington, DE
19890-0001, Attention: Corporate Trust Administration.

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

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

            "Debenture Issuer" means National Interstate Corporation, an
insurance holding company incorporated in the State of Ohio, in its capacity as
issuer of the Debentures under the Indenture, and any permitted successor under
the Indenture.

            "Debenture Trustee" means Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.

            "Debentures" means the Floating Rate Junior Subordinated Debt
Securities due 2033 to be issued by the Debenture Issuer under the Indenture.

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

            "Deferred Interest" means any interest on the Debentures that would
have been overdue and unpaid for more than one Distribution Payment Date but for
the imposition of an Extension Period, and the interest that shall accrue (to
the extent that the payment of such interest is legally enforceable) on such
interest at the Coupon Rate applicable during such Extension Period, compounded
quarterly from the date on which such Deferred Interest would otherwise have
been due and payable until paid or made available for payment.

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

            "Delaware Trustee" has the meaning set forth in Section 4.2.

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

            "Distribution" means a distribution payable to Holders of Securities
in accordance with Section 5.1.

            "Distribution Payment Date" has the meaning set forth in paragraph
2(e) of Annex I.

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

            "Event of Default" means the occurrence of an Indenture Event of
Default.

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

                                       4
<PAGE>

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

            "Fiduciary Indemnified Person" shall mean each of the Institutional
Trustee (including in its individual capacity), the Delaware Trustee (including
in its individual capacity), any Affiliate of the Institutional Trustee or the
Delaware Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the Institutional
Trustee or the Delaware Trustee.

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

            "Guarantee" means the Guarantee Agreement, dated as of the Closing
Date, of the Sponsor (the "Guarantor") in respect of the Capital Securities.

            "Holder" means a Person in whose name a Certificate representing a
Security is registered on the register maintained by or on behalf of the
Registrar, such Person being a beneficial owner within the meaning of the
Statutory Trust Act.

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

            "Indenture" means the Indenture, dated as of the Closing Date, among
the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.

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

            "Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 4.3.

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

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

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

            "Legal Action" has the meaning set forth in Section 2.8(e).

            "LIBOR" means the London Interbank Offered Rate for three-month U.S.
Dollar deposits in Europe as determined by the Calculation Agent according to
paragraph 2(b) of Annex I.

            "LIBOR Banking Day" has the meaning set forth in paragraph 2(b)(1)
of Annex I.

            "LIBOR Business Day" has the meaning set forth in paragraph 2(b)(1)
of Annex I.

                                       5
<PAGE>

            "LIBOR Determination Date" has the meaning set forth in paragraph
2(b)(1) of Annex I.

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

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

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

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

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

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

            (a) a statement that each Authorized Officer or Person, as the case
may be, signing the Officers' Certificate has read the covenant or condition and
the definitions relating thereto;

            (b) a brief statement of the nature and scope of the examination or
investigation undertaken by each Authorized Officer or Person, as the case may
be, in rendering the Officers' Certificate;

            (c) a statement that each Authorized Officer or Person, as the case
may be, has made such examination or investigation as, in his or her opinion, is
necessary to enable such Authorized Officer or Person, as the case may be, to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

            (d) a statement as to whether, in the opinion of each Authorized
Officer or Person, as the case may be, such condition or covenant has been
complied with.

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

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

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

            "Payment Amount" has the meaning set forth in Section 5.1.

                                       6
<PAGE>

            "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.

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

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

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

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

            "QIB" means a "qualified institutional buyer" as defined under Rule
144A.

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

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

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

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

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

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

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

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

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

            "Resale Restriction Termination Date" means, with respect to any
Capital Security, the date which is the later of (i) two years (or such shorter
period of time as permitted by Rule 144(k) under the Securities Act) after the
later of (y) the date of original issuance of such Capital Security and (z) the
last date on which the Trust or any Affiliate of the Trust was the

                                       7
<PAGE>

Holder of such Capital Security (or any predecessor thereto) and (ii) such later
date, if any, as may be required by any subsequent change in applicable law.

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

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

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

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

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

            "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 National Interstate Corporation, an insurance
holding company that is incorporated in the State of Ohio, or any permitted
successor of the Debenture Issuer under the Indenture, in its capacity as
sponsor of the Trust.

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

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

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

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

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

                                       8
<PAGE>

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

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

            "Telerate Page 3750" has the meaning set forth in paragraph 2(b)(1)
of Annex I.

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

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

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

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

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

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

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

            "U.S. Person" means a United States Person as defined in Section
7701(a)(30) of the Code.

                                   ARTICLE II
                                  ORGANIZATION

            SECTION 2.1. Name. The Trust is named "National Interstate Capital
Trust I," as such name may be modified from time to time by the Administrators
following written notice to the Institutional Trustee and the Holders of the
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Administrators.

                                       9
<PAGE>

            SECTION 2.2. Office. The address of the principal office of the
Trust, which shall be in a state of the United States or the District of
Columbia, is 3250 Interstate Drive, Richfield, Ohio 44286. On ten Business Days'
written notice to the Institutional Trustee and the Holders of the Securities,
the Administrators may designate another principal office, which shall be in a
state of the United States or the District of Columbia.

            SECTION 2.3. Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and sell the Securities representing undivided beneficial
interests in the assets of the Trust, (b) to invest the gross proceeds from such
sale in the Debentures and (c) except as otherwise limited herein, to engage in
only those other activities deemed necessary, advisable or incidental thereto by
the Institutional Trustee, including, without limitation, those activities
specified in this Declaration. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.

            SECTION 2.4. Authority. Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
on behalf of the Trust and in accordance with such Trustee's powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration. The Administrators shall have only those ministerial
duties set forth herein with respect to accomplishing the purposes of the Trust
and are not intended to be trustees or fiduciaries with respect to the Trust or
the Holders. The Institutional Trustee shall have the right, but shall not be
obligated except as provided in Section 2.6, to perform those duties assigned to
the Administrators.

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

            SECTION 2.6. Powers and Duties of the Trustees and the
Administrators.

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

                                       10
<PAGE>

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

                        (A) the issuance and sale of the Securities;

                        (B) to cause the Trust to enter into, and to execute,
                  deliver and perform on behalf of the Trust, such agreements as
                  may be necessary or desirable in connection with the purposes
                  and function of the Trust, including agreements with the
                  Paying Agent, a subscription agreement for Debentures between
                  the Trust and the Sponsor, a subscription agreement for
                  Capital Securities between the Trust and the purchaser of the
                  Capital Securities and a subscription agreement for Common
                  Securities between the Trust and the Sponsor;

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

                        (D) if and at such time determined solely by the Sponsor
                  at the request of the Holders, assisting in the designation of
                  the Capital Securities for trading in the Private Offering,
                  Resales and Trading through the Automatic Linkages ("PORTAL")
                  system if available;

                        (E) the sending of notices (other than notices of
                  default) and other information regarding the Securities and
                  the Debentures to the Holders in accordance with this
                  Declaration, including notice of any notice received from the
                  Debenture Issuer of its election to defer payments of interest
                  on the Debentures by extending the interest payment period
                  under the Indenture;

                        (F) the appointment of a Paying Agent, Transfer Agent
                  and Registrar in accordance with this Declaration;

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

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

                        (I) unless otherwise determined by the Holders of a
                  Majority in liquidation amount of the Securities or as
                  otherwise required by the Statutory Trust Act, to execute on
                  behalf of the Trust (either acting alone or together with any
                  or all of the Administrators) any documents that the
                  Administrators have the power to execute pursuant to this
                  Declaration;

                                       11
<PAGE>

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

                        (K) to establish a record date with respect to all
                  actions to be taken hereunder that require a record date be
                  established, including Distributions, voting rights,
                  redemptions and exchanges, and to issue relevant notices to
                  the Holders of Capital Securities and Holders of Common
                  Securities as to such actions and applicable record dates;

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

                        (M) to negotiate the terms of, and the execution and
                  delivery of, the Placement Agreement providing for the sale of
                  the Capital Securities;

                        (N) to employ or otherwise engage employees, agents (who
                  may be designated as officers with titles), managers,
                  contractors, advisors, attorneys and consultants and pay
                  reasonable compensation for such services;

                        (O) to incur expenses that are necessary, advisable or
                  incidental to carry out any of the purposes of the Trust;

                        (P) to give the certificate required by Section
                  314(a)(4) of the Trust Indenture Act to the Institutional
                  Trustee, which certificate may be executed by an
                  Administrator; and

                        (Q) to take all action that may be necessary or
                  appropriate for the preservation and the continuation of the
                  Trust's valid existence, rights, franchises and privileges as
                  a statutory trust under the laws of each jurisdiction (other
                  than the State of Delaware) in which such existence is
                  necessary to protect the limited liability of the Holders of
                  the Capital Securities or to enable the Trust to effect the
                  purposes for which the Trust was created.

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

                        (A) the establishment of the Property Account;

                        (B) the receipt of the Debentures;

                                       12
<PAGE>

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

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

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

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

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

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

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

                        (J) to take all action that may be necessary or
                  appropriate for the preservation and the continuation of the
                  Trust's valid existence, rights, franchises and privileges as
                  a statutory trust under the laws of the State of Delaware to
                  protect the limited liability of the Holders of the Capital
                  Securities or to enable the Trust to effect the purposes for
                  which the Trust was created; and

                        (K) to undertake any actions set forth in Section 317(a)
                  of the Trust Indenture Act.

                  (iii) The Institutional Trustee shall have the power and
            authority, and is hereby authorized, to act on behalf of the Trust
            with respect to any of the duties, liabilities, powers or the
            authority of the Administrators set forth in Section 2.6(a)(i)(E)
            and (F) herein but shall not have a duty to do any such act unless
            specifically requested to do so in writing by the Sponsor, and shall
            then be fully protected in acting pursuant to such written request;
            and in the event of a conflict between the action of the
            Administrators and the action of the Institutional Trustee, the
            action of the Institutional Trustee shall prevail.

                                       13
<PAGE>

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

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

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

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

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

            (d) Notwithstanding anything herein to the contrary, the
Administrators, the Institutional Trustee and the Holders of a Majority in
liquidation amount of the Common Securities are authorized and directed to
conduct the affairs of the Trust and to operate the Trust so that (i) the Trust
will not be deemed to be an Investment Company required to be registered under
the Investment Company Act (in the case of the Institutional Trustee, to the
actual knowledge of a Responsible Officer), and (ii) the Trust will not fail to
be classified as a grantor trust for United States federal income tax purposes
(in the case of the Institutional Trustee, to the actual knowledge of a
Responsible Officer) and (iii) the Trust will not take any action inconsistent
with the treatment of the Debentures as indebtedness of the Debenture Issuer for

                                       14
<PAGE>

United States federal income tax purposes (in the case of the Institutional
Trustee, to the actual knowledge of a Responsible Officer). In this connection,
the Institutional Trustee, the Administrators and the Holders of a Majority in
liquidation amount of the Common Securities are authorized to take any action,
not inconsistent with applicable laws or this Declaration, as amended from time
to time, that each of the Institutional Trustee, the Administrators and such
Holders determine in their discretion to be necessary or desirable for such
purposes, even if such action adversely affects the interests of the Holders of
the Capital Securities.

            (e) All expenses incurred by the Administrators or the Trustees
pursuant to this Section 2.6 shall be reimbursed by the Sponsor, and the
Trustees shall have no obligations with respect to such expenses.

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

            (g) Legal title to all Trust Property shall be vested at all times
in the Institutional Trustee (in its capacity as such) and shall be held and
administered by the Institutional Trustee for the benefit of the Trust in
accordance with this Declaration.

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

            SECTION 2.7. Prohibition of Actions by the Trust and the Trustees.

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

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

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

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

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

            (e) possess any power or otherwise act in such a way as to vary the
Trust Property or the terms of the Securities;

                                       15
<PAGE>

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

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

            SECTION 2.8. Powers and Duties of the Institutional Trustee.

            (a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust. The right, title and interest of the Institutional Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 4.5. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.

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

            (c) The Institutional Trustee shall:

                  (i) establish and maintain a segregated non-interest bearing
            trust account (the "Property Account") in the United States (as
            defined in Treasury Regulations Section 301.7701-7), in the name of
            and under the exclusive control of the Institutional Trustee, and
            maintained in the Institutional Trustee's trust department, on
            behalf of the Holders of the Securities and, upon the receipt of
            payments of funds made in respect of the Debentures held by the
            Institutional Trustee, deposit such funds into the Property Account
            and make payments to the Holders of the Capital Securities and
            Holders of the Common Securities from the Property Account in
            accordance with Section 5.1. Funds in the Property Account shall be
            held uninvested until disbursed in accordance with this Declaration;

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

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

                                       16
<PAGE>

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

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

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

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

                  (ii) a Successor Institutional Trustee has been appointed and
            has accepted that appointment in accordance with Section 4.5.

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

            (h) The Institutional Trustee must exercise the powers set forth in
this Section 2.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 2.3, and the Institutional Trustee shall not
take any action that is inconsistent with the purposes and functions of the
Trust set out in Section 2.3.

            SECTION 2.9. Certain Duties and Responsibilities of the Trustees and
the Administrators.

            (a) The Institutional Trustee, before the occurrence of any Event of
Default (of which the Institutional Trustee has knowledge (as provided in
Section 2.10(m) hereof)) and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such

                                       17
<PAGE>

duties as are specifically set forth in this Declaration and no implied
covenants shall be read into this Declaration against the Institutional Trustee.
In case an Event of Default (of which the Institutional Trustee has knowledge
(as provided in Section 2.10(m) hereof)), has occurred (that has not been cured
or waived pursuant to Section 6.7), the Institutional Trustee shall exercise
such of the rights and powers vested in it by this Declaration, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.

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

            (c) All payments made by the Institutional Trustee or a Paying Agent
in respect of the Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Institutional Trustee
or a Paying Agent to make payments in accordance with the terms hereof. Each
Holder, by its acceptance of a Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees and the
Administrators are not personally liable to it for any amount distributable in
respect of any Security or for any other liability in respect of any Security.
This Section 2.9(c) does not limit the liability of the Trustees expressly set
forth elsewhere in this Declaration or, in the case of the Institutional
Trustee, in the Trust Indenture Act.

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

                                       18
<PAGE>

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

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

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

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

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

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

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

            (b) if (i) in performing its duties under this Declaration, the
Institutional Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Declaration, the
Institutional Trustee finds the same ambiguous or inconsistent with any other
provisions contained herein, or (iii) the Institutional Trustee is unsure of the
application of any provision of this Declaration, then, except as to any matter
as to which the

                                       19
<PAGE>

Holders of Capital Securities are entitled to vote under the terms of this
Declaration, the Institutional Trustee may deliver a notice to the Sponsor
requesting the Sponsor's opinion as to the course of action to be taken and the
Institutional Trustee shall take such action, or refrain from taking such
action, as the Institutional Trustee in its sole discretion shall deem advisable
and in the best interests of the Holders, in which event the Institutional
Trustee shall have no liability except for its own negligence, willful
misconduct or bad faith;

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

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

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

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

            (g) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at the
request or direction of any of the Holders pursuant to this Declaration, unless
such Holders shall have offered to the Institutional Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction; provided, that nothing contained in this Section 2.10(g) shall be
taken to relieve the Institutional Trustee, upon the occurrence of an Event of
Default (of which the Institutional Trustee has knowledge (as provided in
Section 2.10(m) hereof)) that has not been cured or waived, of its obligation to
exercise the rights and powers vested in it by this Declaration;

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

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

                                       20
<PAGE>

            (j) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Institutional Trustee (i) may request instructions from the Holders of the
Common Securities and the Capital Securities, which instructions may be given
only by the Holders of the same proportion in liquidation amount of the Common
Securities and the Capital Securities as would be entitled to direct the
Institutional Trustee under the terms of the Common Securities and the Capital
Securities in respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in acting in
accordance with such instructions;

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

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

            (m) the Institutional Trustee shall not be charged with knowledge of
an Event of Default unless a Responsible Officer of the Institutional Trustee
has actual knowledge of such event or the Institutional Trustee receives written
notice of such event from any Holder, except that the Institutional Trustee
shall be deemed to have knowledge of any Event of Default pursuant to Sections
5.01(a) or 5.01(b) of the Indenture (other than an Event of Default resulting
from the default in the payment of Additional Interest or resulting from the
default in the payment of any premium payable upon a redemption of Debentures
following a Special Event, in each case if the Institutional Trustee does not
have actual knowledge or written notice that such payment is due and payable);

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

            (o) no provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation, and no permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.

            SECTION 2.11. Delaware Trustee. Notwithstanding any other provision
of this Declaration other than Section 4.2, the Delaware Trustee shall not be
entitled to exercise any

                                       21
<PAGE>

powers, and the Delaware Trustee shall not have any of the duties and
responsibilities of any of the Trustees or the Administrators specified in this
Declaration (except as may be required under the Statutory Trust Act). Except as
set forth in Section 4.2, the Delaware Trustee shall be a Trustee for the sole
and limited purpose of fulfilling the requirements of Section 3807 of the
Statutory Trust Act.

            SECTION 2.12. Execution of Documents. Unless otherwise determined in
writing by the Institutional Trustee, and except as otherwise required by the
Statutory Trust Act, the Institutional Trustee, or any one or more of the
Administrators, as the case may be, is authorized to execute and deliver on
behalf of the Trust any documents, agreements, instruments or certificates that
the Trustees or the Administrators, as the case may be, have the power and
authority to execute pursuant to Section 2.6.

            SECTION 2.13. Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees and Administrators
do not assume any responsibility for their correctness. The Trustees and
Administrators make no representations as to the value or condition of the Trust
Property or any part thereof. The Trustees and Administrators make no
representations as to the validity or sufficiency of this Declaration, the
Debentures or the Securities.

            SECTION 2.14. Duration of Trust. The Trust, unless dissolved
pursuant to the provisions of Article VII hereof, shall have existence for
thirty-five (35) years from the Closing Date.

            SECTION 2.15. Mergers. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other Person, except as described in this Section 2.15 and except with respect
to the distribution of Debentures to Holders of Securities pursuant to Section
7.1(a)(iv) of this Declaration or Section 4 of Annex I.

            (b) The Trust may, with the consent of the Administrators (which
consent will not be unreasonably withheld) and without the consent of the
Institutional Trustee, the Delaware Trustee or the Holders of the Capital
Securities, consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to a trust organized as such under the laws of any
state; provided, that:

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

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

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

                                       22
<PAGE>

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

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

                  (iv) such merger, consolidation, amalgamation, replacement,
            conveyance, transfer or lease does not cause the rating on the
            Capital Securities or any Successor Securities to be downgraded or
            withdrawn by any nationally recognized statistical rating
            organization, if the Capital Securities are then rated;

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

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

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

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

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

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

                                       23
<PAGE>

            (viii) the Sponsor guarantees the obligations of the Successor
      Entity under the Successor Securities to the same extent provided by
      the Indenture, the Guarantee, the Debentures and this Declaration;
      and

            (ix) prior to such merger, consolidation, amalgamation,
      replacement, conveyance, transfer or lease, the Institutional
      Trustee shall have received an Officers' Certificate of the
      Administrators and an opinion of counsel, each to the effect that
      all conditions precedent of this paragraph (b) to such transaction
      have been satisfied.

            (c) Notwithstanding Section 2.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or Successor Entity to be classified as other than a grantor trust for
United States federal income tax purposes.

                                   ARTICLE III

                                     SPONSOR

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

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

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

            (b) to prepare for filing and request the Administrators to cause
the filing by the Trust, as may be appropriate, of an application to the PORTAL
system, for listing or quotation upon notice of issuance of any Capital
Securities, as requested by the Holders of not less than a Majority in
liquidation amount of the Capital Securities; and

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

                                       24
<PAGE>

                                   ARTICLE IV

                           TRUSTEES AND ADMINISTRATORS

            SECTION 4.1. Number of Trustees. The number of Trustees initially
shall be two, and:

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

            (b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holder of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holder of
the Common Securities; provided, however, that there shall be a Delaware Trustee
if required by Section 4.2; and there shall always be one Trustee who shall be
the Institutional Trustee, and such Trustee may also serve as Delaware Trustee
if it meets the applicable requirements, in which case Section 2.11 shall have
no application to such entity in its capacity as Institutional Trustee.

            SECTION 4.2. Delaware Trustee. If required by the Statutory Trust
Act, one Trustee (the "Delaware Trustee") shall be:

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

            (b) if not a natural person, an entity which is organized under the
laws of the United States or any state thereof or the District of Columbia, has
its principal place of business in the State of Delaware, and otherwise meets
the requirements of applicable law, including Section 3807 of the Statutory
Trust Act.

            The initial Delaware Trustee shall be Wilmington Trust Company.

            SECTION 4.3. Institutional Trustee; Eligibility.

            (a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:

                  (i) not be an Affiliate of the Sponsor;

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

                  (iii) be a banking corporation or national association
            organized and doing business under the laws of the United States of
            America or any state thereof or of the District of Columbia and
            authorized under such laws to exercise corporate trust powers,
            having a combined capital and surplus of at least fifty million U.S.
            dollars ($50,000,000), and subject to supervision or examination by
            federal, state or District of Columbia authority. If such
            corporation or national association publishes

                                       25
<PAGE>

            reports of condition at least annually, pursuant to law or to the
            requirements of the supervising or examining authority referred to
            above, then for the purposes of this Section 4.3(a)(iii), the
            combined capital and surplus of such corporation or national
            association shall be deemed to be its combined capital and surplus
            as set forth in its most recent report of condition so published.

            (b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 4.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section 4.5.

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

            (d) The initial Institutional Trustee shall be Wilmington Trust
Company.

            SECTION 4.4. Administrators. Each Administrator shall be a U.S.
Person. There shall at all times be at least one Administrator. Except where a
requirement for action by a specific number of Administrators is expressly set
forth in this Declaration and except with respect to any action the taking of
which is the subject of a meeting of the Administrators, any action required or
permitted to be taken by the Administrators may be taken by, and any power of
the Administrators may be exercised by, or with the consent of, any one such
Administrator acting alone.

            SECTION 4.5. Appointment, Removal and Resignation of the Trustees
and the Administrators.

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

            (b) Subject to Section 4.5(a), a Relevant Trustee may resign at any
time by giving written notice thereof to the Holders of the Securities and by
appointing a successor Relevant Trustee. Upon the resignation of the
Institutional Trustee, the Institutional Trustee shall appoint a successor by
requesting from at least three Persons meeting the eligibility requirements
their expenses and charges to serve as the successor Institutional Trustee on a
form provided by the Administrators, and selecting the Person who agrees to the
lowest expense and charges (the "Successor Institutional Trustee"). If the
instrument of acceptance by the successor Relevant Trustee required by this
Section shall not have been delivered to the Relevant Trustee within 60 days
after the giving of such notice of resignation or delivery of the instrument of
removal, the Relevant Trustee may petition, at the expense of the Trust, any
federal, state or District of Columbia court of competent jurisdiction for the
appointment of a successor Relevant Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Relevant
Trustee. The Institutional Trustee shall have no liability for the selection of
such successor pursuant to this Section.

                                       26
<PAGE>

            (c) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by an act of the Holders of a
Majority in liquidation amount of the Common Securities. If any Trustee shall be
so removed, the Holders of the Common Securities, by act of the Holders of a
Majority in liquidation amount of the Common Securities delivered to the
Relevant Trustee, shall promptly appoint a successor Relevant Trustee, and such
successor Trustee shall comply with the applicable requirements of this Section.
If an Event of Default shall have occurred and be continuing, the Institutional
Trustee or the Delaware Trustee, or both of them, may be removed by the act of
the Holders of a Majority in liquidation amount of the Capital Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of
the Trust). If any Trustee shall be so removed, the Holders of Capital
Securities, by act of the Holders of a Majority in liquidation amount of the
Capital Securities then outstanding delivered to the Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of this Section. If no
successor Relevant Trustee shall have been so appointed by the Holders of a
Majority in liquidation amount of the Capital Securities and accepted
appointment in the manner required by this Section within 30 days after delivery
of an instrument of removal, the Relevant Trustee or any Holder who has been a
Holder of the Securities for at least six months may, on behalf of himself and
all others similarly situated, petition any federal, state or District of
Columbia court of competent jurisdiction for the appointment of a successor
Relevant Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a successor Relevant Trustee or Trustees.

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

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

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

                                       27
<PAGE>

duly assign, transfer and deliver to such successor Relevant Trustee all Trust
Property, all proceeds thereof and money held by such retiring Relevant Trustee
hereunder with respect to the Securities and the Trust subject to the payment of
all unpaid fees, expenses and indemnities of such retiring Relevant Trustee.

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

            (h) The Holders of the Capital Securities will have no right to vote
to appoint, remove or replace the Administrators, which voting rights are vested
exclusively in the Holders of the Common Securities.

            (i) Any Successor Delaware Trustee shall file an amendment to the
Certificate of Trust with the Secretary of State of the State of Delaware
identifying the name and principal place of business of such Delaware Trustee in
the State of Delaware.

            SECTION 4.6. Vacancies Among Trustees. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 4.1, or if the number of Trustees is increased pursuant to Section 4.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
the Trustees or, if there are more than two, a majority of the Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 4.5.

            SECTION 4.7. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust or terminate this Declaration. Whenever a vacancy
in the number of Trustees shall occur, until such vacancy is filled by the
appointment of a Trustee in accordance with Section 4.5, the Institutional
Trustee shall have all the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by this Declaration.

            SECTION 4.8. Meetings of the Trustees and the Administrators.
Meetings of the Trustees or the Administrators shall be held from time to time
upon the call of any Trustee or Administrator, as applicable. Regular meetings
of the Trustees and the Administrators, respectively, may be in person in the
United States or by telephone, at a place (if applicable) and time fixed by
resolution of the Trustees or the Administrators, as applicable. Notice of any
in-person meetings of the Trustees or the Administrators shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Trustees or the Administrators or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Trustee or an Administrator, as the case may be, at a meeting
shall constitute a waiver of notice of such meeting except where a Trustee or an
Administrator, as the case may be, attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Trustees or the Administrators, as the case may
be, may be taken at a meeting by

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<PAGE>

vote of a majority of the Trustees or the Administrators present (whether in
person or by telephone) and eligible to vote with respect to such matter;
provided, that, in the case of the Administrators, a Quorum is present, or
without a meeting by the unanimous written consent of the Trustees or the
Administrators, as the case may be. Meetings of the Trustees and the
Administrators together shall be held from time to time upon the call of any
Trustee or Administrator.

            SECTION 4.9. Delegation of Power. (a) Any Trustee or any
Administrator, as the case may be, may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 that is
a U.S. Person his or her power for the purpose of executing any documents,
instruments or other writings contemplated in Section 2.6.

            (b) The Trustees shall have power to delegate from time to time to
such of their number or to any officer of the Trust that is a U.S. Person, the
doing of such things and the execution of such instruments or other writings
either in the name of the Trust or the names of the Trustees or otherwise as the
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.

            SECTION 4.10. Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided such Person shall be otherwise qualified and eligible under this
Article and, provided, further, that such Person shall file an amendment to the
Certificate of Trust with the Secretary of State of the State of Delaware as
contemplated in Section 4.5(i).

                                    ARTICLE V

                                  DISTRIBUTIONS

            SECTION 5.1. Distributions. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
any Additional Interest or Deferred Interest) or premium, if any, on and/or
principal of the Debentures held by the Institutional Trustee (the amount of any
such payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available in the Property Account for that
purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders. For the avoidance of doubt, funds in the Property Account shall not be
distributed to Holders to the extent of any taxes payable by the Trust, in the
case of withholding taxes, as determined by the Institutional Trustee or any
Paying Agent and, in the case of taxes other than withholding tax taxes, as
determined by the Administrators in a written notice to the Institutional
Trustee.

                                       29
<PAGE>

                                   ARTICLE VI

                             ISSUANCE OF SECURITIES

            SECTION 6.1. General Provisions Regarding Securities.

            (a) The Administrators shall on behalf of the Trust issue one series
of capital securities, evidenced by a certificate substantially in the form of
Exhibit A-1, representing undivided beneficial interests in the assets of the
Trust and having such terms as are set forth in Annex I (the "Capital
Securities"), and one series of common securities, evidenced by a certificate
substantially in the form of Exhibit A-2, representing undivided beneficial
interests in the assets of the Trust and having such terms as are set forth in
Annex I (the "Common Securities"). The Trust shall issue no securities or other
interests in the assets of the Trust other than the Capital Securities and the
Common Securities. The Capital Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event of
Default has occurred and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Capital Securities.

            (b) The Certificates shall be signed on behalf of the Trust by one
or more Administrators. Such signature shall be the facsimile or manual
signature of any Administrator. In case any Administrator of the Trust who shall
have signed any of the Securities shall cease to be such Administrator before
the Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Administrator. Any Certificate may be signed on behalf
of the Trust by such person who, at the actual date of execution of such
Security, shall be an Administrator of the Trust, although at the date of the
execution and delivery of the Declaration any such person was not such an
Administrator. A Capital Security shall not be valid until authenticated by the
manual signature of an Authorized Officer of the Institutional Trustee. Such
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration. Upon written order of the Trust signed by
one Administrator, the Institutional Trustee shall authenticate the Capital
Securities for original issue. The Institutional Trustee may appoint an
authenticating agent that is a U.S. Person acceptable to the Trust to
authenticate the Capital Securities. A Common Security need not be so
authenticated and shall be valid upon execution by one or more Administrators.

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

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

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

                                       30
<PAGE>

            SECTION 6.2. Paying Agent, Transfer Agent, Calculation Agent and
Registrar.

            (a) The Trust shall maintain in Wilmington, Delaware (i) an office
or agency where the Securities may be presented for payment (the "Paying Agent")
and (ii) an office or agency where Securities may be presented for registration
of transfer or exchange (the "Transfer Agent"). The Trust shall keep or cause to
be kept at such office or agency a register for the purpose of registering
Securities and transfers and exchanges of Securities, such register to be held
by a registrar (the "Registrar"). The Administrators may appoint the Paying
Agent, the Registrar and the Transfer Agent, and may appoint one or more
additional Paying Agents, one or more co-Registrars, or one or more co-Transfer
Agents in such other locations as it shall determine. The term "Paying Agent"
includes any additional Paying Agent, the term "Registrar" includes any
additional Registrar or co-Registrar and the term "Transfer Agent" includes any
additional Transfer Agent or co-Transfer Agent. The Administrators may change
any Paying Agent, Transfer Agent or Registrar at any time without prior notice
to any Holder. The Administrators shall notify the Institutional Trustee of the
name and address of any Paying Agent, Transfer Agent and Registrar not a party
to this Declaration. The Administrators hereby initially appoint the
Institutional Trustee to act as Paying Agent, Transfer Agent and Registrar for
the Capital Securities and the Common Securities at its Corporate Trust Office.
The Institutional Trustee or any of its Affiliates in the United States may act
as Paying Agent, Transfer Agent or Registrar.

            (b) The Trust shall also appoint a Calculation Agent, which shall
determine the Coupon Rate in accordance with the terms of the Securities. The
Trust initially appoints the Institutional Trustee as Calculation Agent.

            SECTION 6.3. Form and Dating.

            (a) The Capital Securities and the Institutional Trustee's
certificate of authentication thereon shall be substantially in the form of
Exhibit A-1, and the Common Securities shall be substantially in the form of
Exhibit A-2, each of which is hereby incorporated in and expressly made a part
of this Declaration. Certificates may be typed, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrators, as conclusively evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided, that
any such notation, legend or endorsement is in a form acceptable to the
Sponsor). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Institutional Trustee in writing.
Each Capital Security shall be dated the date of its authentication. The terms
and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Institutional Trustee, the
Delaware Trustee, the Administrators and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby. Capital Securities will be issued only in blocks having an
aggregate liquidation amount of not less than $100,000 and multiples of $1,000
in excess thereof.

                                       31
<PAGE>

            (b) The Capital Securities are being offered and sold by the Trust
initially pursuant to the Placement Agreement in definitive form, registered in
the name of the Holder thereof, without coupons and with the Restricted
Securities Legend.

            SECTION 6.4. Mutilated, Destroyed, Lost or Stolen Certificates. If:

            (a) any mutilated Certificates should be surrendered to the
Registrar, or if the Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate; and

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

            SECTION 6.5. Temporary Securities. Until definitive Securities are
ready for delivery, the Administrators may prepare and, in the case of the
Capital Securities, the Institutional Trustee shall authenticate, temporary
Securities. Temporary Securities shall be substantially in form of definitive
Securities but may have variations that the Administrators consider appropriate
for temporary Securities. Without unreasonable delay, the Administrators shall
prepare and, in the case of the Capital Securities, the Institutional Trustee
shall authenticate definitive Securities in exchange for temporary Securities.

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

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

            (a) The legal title to the Trust Property is vested exclusively in
the Institutional Trustee (in its capacity as such) in accordance with Section
2.5, and the Holders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Trust except as described below. The
Securities shall be personal property giving only the rights specifically set
forth therein and in this Declaration. The Securities shall have no, and the
issuance of the Securities shall not be subject to,

                                       32
<PAGE>

preemptive or other similar rights and when issued and delivered to Holders
against payment of the purchase price therefor, the Securities will be fully
paid and nonassessable by the Trust.

            (b) For so long as any Capital Securities remain outstanding, if,
upon an Indenture Event of Default, the Debenture Trustee fails or the holders
of not less than 25% in principal amount of the outstanding Debentures fail to
declare the principal of all of the Debentures to be immediately due and
payable, the Holders of not less than a Majority in liquidation amount of the
Capital Securities then outstanding shall have the right to make such
declaration by a notice in writing to the Institutional Trustee, the Sponsor and
the Debenture Trustee.

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

                  (i) the Sponsor has paid or deposited with the Debenture
            Trustee a sum sufficient to pay

                        (A) all overdue installments of interest on all of the
                  Debentures;

                        (B) any accrued Deferred Interest on all of the
                  Debentures;

                        (C) all payments on any Debentures that have become due
                  otherwise than by such acceleration and interest and Deferred
                  Interest thereon at the rate borne by the Debentures; and

                        (D) all sums paid or advanced by the Debenture Trustee
                  under the Indenture and the reasonable compensation,
                  documented expenses, disbursements and advances of the
                  Debenture Trustee and the Institutional Trustee, their agents
                  and counsel; and

                  (ii) all Events of Default with respect to the Debentures,
            other than the non-payment of the principal of or premium, if any,
            on the Debentures that has become due solely by such acceleration,
            have been cured or waived as provided in Section 5.07 of the
            Indenture.

            (d) The Holders of a Majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past Default or Event of Default, except a Default or Event of Default
arising from the non-payment of principal of or premium, if any, or interest on
the Debentures (unless such Default or Event of Default has been cured and a sum
sufficient to pay all matured installments of interest, premium and principal
due otherwise than by acceleration has been deposited with the Debenture
Trustee) or a Default or Event of Default in respect of a covenant or provision
that under the Indenture cannot be

                                       33
<PAGE>

modified or amended without the consent of the holder of each outstanding
Debenture. No such rescission shall affect any subsequent default or impair any
right consequent thereon.

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

            (f) Except as otherwise provided in this Section, the Holders of a
Majority in liquidation amount of the Capital Securities may, on behalf of the
Holders of all the Capital Securities, waive any past Default or Event of
Default and its consequences. Upon such waiver, any such Default or Event of
Default shall cease to exist, and any Default or Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Declaration, but 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 May 22, 2038, the expiration
            of the term of the Trust;

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

                  (iii) (other than in connection with a merger, consolidation
            or similar transaction permitted by the Indenture, this Declaration
            or the Guarantee, as the case may be) the filing of a certificate of
            dissolution or its equivalent with respect to the Sponsor or upon
            the revocation of the charter of the Sponsor and the expiration of
            90 days after the date of revocation without a reinstatement
            thereof;

                                       34
<PAGE>

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

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

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

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

            (b) As soon as is practicable after the occurrence of an event
referred to in Section 7.1(a), and after satisfaction of liabilities to
creditors of the Trust as required by applicable law, including Section 3808 of
the Statutory Trust Act, and subject to the terms set forth in Annex I, the
Institutional Trustee shall terminate the Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware.

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

                                  ARTICLE VIII

                              TRANSFER OF INTERESTS

            SECTION 8.1. General. (a) Where Capital Securities are presented to
the Registrar with a request to register a transfer or to exchange them for an
equal aggregate liquidation amount of Capital Securities represented by
different Certificates, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Trust shall issue and the
Institutional Trustee shall authenticate Capital Securities at the Registrar's
request.

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

            (c) Capital Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Capital Securities. To the fullest extent permitted by
applicable law, any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void and will be deemed to be
of no legal effect whatsoever and any such transferee shall be deemed not to be
the Holder of such Capital Securities for any purpose, including, but not
limited to, the receipt of Distributions on such Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such Capital
Securities.

                                       35
<PAGE>

            (d) The Registrar shall provide for the registration of Securities
and of transfers of Securities, which will be effected without charge but only
upon payment (with such indemnity as the Registrar may require) in respect of
any tax or other governmental charges that may be imposed in relation to it.
Upon surrender for registration of transfer of any Securities, the Registrar
shall cause one or more new Securities to be issued in the name of the
designated transferee or transferees. Any Security issued upon any registration
of transfer or exchange pursuant to the terms of this Declaration shall evidence
the same Security and shall be entitled to the same benefits under this
Declaration as the Security surrendered upon such registration of transfer or
exchange. Every Security surrendered for registration of transfer shall be (i)
duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing and (ii) accompanied, if such
Security is being transferred prior to the Resale Restriction Termination Date,
by a certificate substantially in the form set forth as Exhibit B or C, as
applicable, hereto. Each Security surrendered for registration of transfer shall
be canceled by the Institutional Trustee pursuant to Section 6.6. A transferee
of a Security shall be entitled to the rights and subject to the obligations of
a Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Declaration.

            (e) Neither the Trust nor the Registrar shall be required (i) to
issue, register the transfer of, or exchange any Securities during a period
beginning at the opening of business 15 days before the day of any selection of
Securities for redemption and ending at the close of business on the earliest
date on which the relevant notice of redemption is deemed to have been given to
all Holders of the Securities to be redeemed, or (ii) to register the transfer
or exchange of any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.

            SECTION 8.2. Transfer Procedures and Restrictions.

            (a) Prior to the Resale Restriction Termination Date, the Capital
Securities shall bear the Restricted Securities Legend. The Restricted
Securities Legend on any outstanding Capital Security shall not be removed
unless there is delivered to the Trust such satisfactory evidence, which may
include an opinion of counsel, as may be reasonably required by the Trust, that
neither the Restricted Securities Legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with the
provisions of the Securities Act or that such Securities are not "restricted"
within the meaning of Rule 144 under the Securities Act. Upon provision of such
satisfactory evidence, the Institutional Trustee, at the written direction of
the Trust, shall authenticate and deliver Capital Securities that do not bear
the Restricted Securities Legend in exchange for the Capital Securities bearing
the Restricted Securities Legend.

            (b) When Capital Securities are presented to the Registrar (x) to
register the transfer of such Capital Securities, or (y) to exchange such
Capital Securities for an equal aggregate liquidation amount of Capital
Securities represented by different Certificates, the Registrar shall register
the transfer or make the exchange as requested if its reasonable requirements
for such transaction are met; provided, however, that the Capital Securities
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by

                                       36
<PAGE>

a written instrument of transfer in form reasonably satisfactory to the Trust
and the Registrar duly executed by the Holder thereof or his attorney duly
authorized in writing and (i) if such Capital Securities are being transferred
prior to the Resale Restriction Termination Date to a QIB, accompanied by a
certificate of the transferor substantially in the form set forth as Exhibit C
hereto or (ii) if such Capital Securities are being transferred prior to the
Resale Restriction Termination Date otherwise than to a QIB, accompanied by a
certificate of the transferee substantially in the form set forth as Exhibit B
hereto.

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

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, HEREIN AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO
YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405
UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A)
TO THE DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7)
OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE

                                       37
<PAGE>

RIGHT OF THE DEBENTURE ISSUER AND THE TRUST PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM IN ACCORDANCE WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A COPY
OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF
THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF
OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

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

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

            THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN
EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS

                                       38
<PAGE>

SECURITY IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

            (d) Capital Securities may only be transferred in minimum blocks of
$100,000 aggregate liquidation amount (100 Capital Securities) and multiples of
$1,000 in excess thereof. Any attempted transfer of Capital Securities in a
block having an aggregate liquidation amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever. Any such purported
transferee shall be deemed not to be a Holder of such Capital Securities for any
purpose, including, but not limited to, the receipt of Distributions on such
Capital Securities, and such purported transferee shall be deemed to have no
interest whatsoever in such Capital Securities.

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

                                   ARTICLE IX

                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

            SECTION 9.1. Liability. (a) Except as expressly set forth in this
Declaration, the Guarantee and the terms of the Securities, the Sponsor shall
not be:

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

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

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

                                       39
<PAGE>

            (c) Pursuant to Section 3803(a) of the Statutory Trust Act, the
Holders of the Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware, except as otherwise
specifically set forth herein.

            SECTION 9.2. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person (other than an
Administrator) shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's negligence, willful misconduct or bad faith
with respect to such acts or omissions and except that an Administrator shall be
liable for any such loss, damage or claim incurred by reason of such
Administrator's gross negligence, willful misconduct or bad faith with respect
to such acts or omissions.

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

            SECTION 9.3. Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of the Indemnified Person.

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

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

                  (ii) in its "good faith" or under another express standard,
            the Indemnified Person shall act under such express standard and
            shall not be subject

                                       40
<PAGE>

            to any other or different standard imposed by this Declaration or by
            applicable law.

            SECTION 9.4. Indemnification. (a)

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

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

                  (iii) To the extent that an Indemnified Person shall be
            successful on the merits or otherwise (including dismissal of an
            action without prejudice or the settlement of an action without
            admission of liability) in defense of any action, suit or proceeding
            referred to in paragraphs (i) and (ii) of this Section 9.4(a), or in
            defense of any claim, issue or matter therein, such Person shall be
            indemnified, to the fullest extent permitted by law, against
            expenses (including attorneys' fees and expenses) actually and
            reasonably incurred by such Person in connection therewith.

                                       41
<PAGE>

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

                  (v) To the fullest extent permitted by law, expenses
            (including attorneys' fees and expenses) incurred by an Indemnified
            Person in defending a civil, criminal, administrative or
            investigative action, suit or proceeding referred to in paragraphs
            (i) and (ii) of this Section 9.4(a) shall be paid by the Sponsor in
            advance of the final disposition of such action, suit or proceeding
            upon receipt of an undertaking by or on behalf of such Indemnified
            Person to repay such amount if it shall ultimately be determined
            that such Person is not entitled to be indemnified by the Sponsor as
            authorized in this Section 9.4(a). Notwithstanding the foregoing, no
            advance shall be made by the Sponsor if a determination is
            reasonably and promptly made (1) in the case of a Company
            Indemnified Person (A) by the Administrators by a majority vote of a
            Quorum of disinterested Administrators, (B) if such a Quorum is not
            obtainable, or, even if obtainable, if a Quorum of disinterested
            Administrators so directs, by independent legal counsel in a written
            opinion or (C) by the Common Security Holder of the Trust, that,
            based upon the facts known to the Administrators, counsel or the
            Common Security Holder at the time such determination is made, such
            Indemnified Person acted in bad faith or in a manner that such
            Person either believed to be opposed to or did not believe to be in
            the best interests of the Trust, or, with respect to any criminal
            proceeding, that such Indemnified Person believed or had reasonable
            cause to believe such conduct was unlawful, or (2) in the case of a
            Fiduciary Indemnified Person, by independent legal counsel in a
            written opinion that, based upon the facts known to the counsel at
            the time such determination is made, such Indemnified Person acted
            in bad faith or in a manner that such Indemnified Person either
            believed to be opposed to or did not believe to be in the best
            interests of the Trust, or, with respect to any criminal proceeding,
            that such Indemnified Person believed or had reasonable cause to
            believe such conduct was unlawful. In no event shall any advance be
            made (i) to a Company Indemnified Person in instances where the
            Administrators, independent legal counsel or the Common Security
            Holder reasonably determine that such Person deliberately breached
            such Person's duty to the Trust or its Common or Capital Security
            Holders or (ii) to a Fiduciary Indemnified Person in instances where
            independent legal counsel promptly and reasonably determines in a
            written opinion that such Person deliberately breached such Person's
            duty to the Trust or its Common or Capital Security Holders.

            (b) The Sponsor shall indemnify, to the fullest extent permitted by
applicable law, each Indemnified Person from and against any and all loss,
damage, liability, tax (other than taxes based on the income of such Indemnified
Person), penalty, expense or claim of any kind or nature whatsoever incurred by
such Indemnified Person arising out of or in connection

                                       42
<PAGE>

with or by reason of the creation, administration or termination of the Trust,
or any act or omission of such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of authority conferred on such Indemnified Person by this Declaration,
except that no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage, liability, tax, penalty, expense or claim incurred by such
Indemnified Person by reason of negligence, willful misconduct or bad faith with
respect to such acts or omissions.

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

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

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

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

            (g) The provisions of this Section shall survive the termination of
this Declaration or the earlier resignation or removal of the Institutional
Trustee. The obligations of the Sponsor under this Section to compensate and
indemnify the Trustees and to pay or reimburse the Trustees for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustees as
such, except funds held in trust for the benefit of the Holders of particular
Capital Securities, provided, that the Sponsor is the Holder of the Common
Securities.

                                       43
<PAGE>

            SECTION 9.5. Outside Businesses. Any Covered Person, the Sponsor,
the Delaware Trustee and the Institutional Trustee (subject to Section 4.3(c))
may engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the Holders of Securities shall have no rights
by virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. None of any Covered Person, the Sponsor, the Delaware Trustee or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.

            SECTION 9.6. Compensation; Fee. (a) The Sponsor agrees:

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

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

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

                                    ARTICLE X

                                   ACCOUNTING

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

            SECTION 10.2. Certain Accounting Matters.

                                       44
<PAGE>

            (a) At all times during the existence of the Trust, the
Administrators shall keep, or cause to be kept, at the principal office of the
Trust in the United States, as defined for purposes of Treasury Regulations
Section 301.7701-7, full books of account, records and supporting documents,
which shall reflect in reasonable detail each transaction of the Trust. The
books of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently applied.

            (b) The Sponsor shall cause the Administrators to deliver to each
Holder of Securities: (i) within 45 days after the end of each quarterly fiscal
period other than year end, (1) unaudited consolidated financial statements of
the Sponsor (including balance sheet and income statement) covering such period
and (2) an Officer's Certificate of the Sponsor to the effect specified in
Exhibit D hereto; (ii) within 60 days after the end of each year end, (1)
unaudited consolidated financial statements of the Sponsor (including balance
sheet and income statement) covering the related annual period and (2) an
Officer's Certificate of the Sponsor to the effect specified in Exhibit D
hereto; (iii) within 120 days after the end of each year end (1) audited
consolidated financial statements of the Sponsor (including balance sheet and
income statement) covering the related annual period, (2) the report of the
independent accountants with respect to such financial statements and (3) an
Officer's Certificate of the Sponsor detailing any material differences between
the unaudited financial statements for such annual period delivered pursuant to
clause (ii)(1) above and those delivered pursuant to this clause; and (iv)
within 7 days after the filing thereof, each Form 10-K and Form 10-Q that is
prepared by the Sponsor in respect of the Sponsor or the Trust and filed with
the Commission in accordance with the Exchange Act, if any.

            (c) The Administrators shall cause to be duly prepared and delivered
to each of the Holders of Securities Form 1099 or such other annual United
States federal income tax information statement required by the Code, containing
such information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrators
shall endeavor to deliver all such statements within 30 days after the end of
each Fiscal Year of the Trust.

            (d) The Administrators shall cause to be duly prepared in the United
States, as defined for purposes of Treasury Regulations Section 301.7701-7, and
filed an annual United States federal income tax return on a Form 1041 or such
other form required by United States federal income tax law, and any other
annual income tax returns required to be filed by the Administrators on behalf
of the Trust with any state or local taxing authority.

            (e) So long as the only Holder of the Capital Securities is InCapS
Funding I, Ltd. or a trustee thereof, the Administrators will cause copies of
the annual financial statements of the Sponsor and/or Affiliates that are filed
with the insurance regulator in the state in which the Sponsor or any such
Affiliate is incorporated to be delivered to the Holder promptly following their
filing.

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

                                       45
<PAGE>

            SECTION 10.4. Withholding. The Institutional Trustee or any Paying
Agent and the Administrators shall comply with all withholding requirements
under United States federal, state and local law. The Institutional Trustee or
any Paying Agent shall request, and each Holder shall provide to the
Institutional Trustee or any Paying Agent, such forms or certificates as are
necessary to establish an exemption from withholding with respect to the Holder,
and any representations and forms as shall reasonably be requested by the
Institutional Trustee or any Paying Agent to assist it in determining the extent
of, and in fulfilling, its withholding obligations. The Administrators shall
file required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Institutional Trustee or any Paying Agent is required to withhold and pay over
any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a Distribution to the Holder
in the amount of the withholding. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Institutional Trustee or any Paying Agent may reduce subsequent
Distributions by the amount of such withholding.

                                   ARTICLE XI

                             AMENDMENTS AND MEETINGS

            SECTION 11.1. Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by

                  (i) the Institutional Trustee,

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

                  (iii) if the amendment affects the rights, powers, duties,
            obligations or immunities of the Administrators, the Administrators,
            and

                  (iv) the Holders of a Majority in liquidation amount of the
            Common Securities.

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

                  (i) unless the Institutional Trustee shall have first received

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

                                       46
<PAGE>

                        (B) an opinion of counsel (who may be counsel to the
                  Sponsor or the Trust) that such amendment is permitted by, and
                  conforms to, the terms of this Declaration (including the
                  terms of the Securities) and that all conditions precedent to
                  the execution and delivery of such amendment have been
                  satisfied; or

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

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

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

                        (C) 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 (g), no amendment
shall be made, and any such purported amendment shall be void and ineffective,
unless the Holders of a Majority in liquidation amount of the Capital Securities
shall have consented to such amendment.

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

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

            (f) The rights of the Holders of the Capital Securities and Common
Securities, as applicable, under Article IV to increase or decrease the number
of, and appoint and remove, Trustees shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Capital Securities or
Common Securities, as applicable.

            (g) This Declaration may be amended by the Institutional Trustee and
the Holder of a Majority in liquidation amount of the Common Securities without
the consent of the Holders of the Capital Securities to:

                  (i) cure any ambiguity;

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

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

                                       47
<PAGE>

                  (iv) modify, eliminate or add to any provision of this
                  Declaration to such extent as may be necessary or desirable,
                  including, without limitation, to ensure that the Trust will
                  be classified for United States federal income tax purposes at
                  all times as a grantor trust and will not be required to
                  register as an Investment Company under the Investment Company
                  Act (including without limitation to conform to any change in
                  Rule 3a-5, Rule 3a-7 or any other applicable rule under the
                  Investment Company Act or written change in interpretation or
                  application thereof by any legislative body, court, government
                  agency or regulatory authority);

provided, however, that no such amendment contemplated in clause (i), (ii),
(iii) or (iv) shall adversely affect the powers, preferences, rights or
interests of Holders of Capital Securities.

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

            (a) Meetings of the Holders of the Capital Securities or the Common
Securities may be called at any time by the Administrators (or as provided in
the terms of such Securities) to consider and act on any matter on which Holders
of such Securities are entitled to act under the terms of this Declaration, the
terms of such Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, if any. The Administrators shall
call a meeting of the Holders of such Securities if directed to do so by the
Holders of not less than 10% in liquidation amount of such Securities. Such
direction shall be given by delivering to the Administrators one or more notices
in a writing stating that the signing Holders of such Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of the Securities exercising the
right to call a meeting and only those Securities represented by such
Certificates shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.

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

                  (i) Notice of any such meeting shall be given to all the
            Holders of the Securities having a right to vote thereat at least 7
            days and not more than 60 days before the date of such meeting.
            Whenever a vote, consent or approval of the Holders of the
            Securities is permitted or required under this Declaration or the
            rules of any stock exchange on which the Capital Securities are
            listed or admitted for trading, if any, such vote, consent or
            approval may be given at a meeting of the Holders of the Securities.
            Any action that may be taken at a meeting of the Holders of the
            Securities may be taken without a meeting if a consent in writing
            setting forth the action so taken is signed by the Holders of the
            Securities owning not less than the minimum liquidation amount of
            Securities that would be necessary to authorize or take such action
            at a meeting at which all Holders of the Securities having a right
            to vote thereon were present and voting. Prompt notice of the taking
            of action without a meeting shall be given to the Holders of the
            Securities entitled to vote who have not consented in writing. The
            Administrators may specify that

                                       48
<PAGE>

            any written ballot submitted to the Holders of the Securities for
            the purpose of taking any action without a meeting shall be returned
            to the Trust within the time specified by the Administrators.

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

                  (iii) Unless the Statutory Trust Act, this Declaration, the
            terms of the Securities, the Trust Indenture Act or the listing
            rules of any stock exchange on which the Capital Securities are then
            listed or admitted for trading, if any, otherwise provides, the
            Administrators, in their sole discretion, shall establish all other
            provisions relating to meetings of Holders of Securities, including
            notice of the time, place or purpose of any meeting at which any
            matter is to be voted on by any Holders of the Securities, waiver of
            any such notice, action by consent without a meeting, the
            establishment of a record date, quorum requirements, voting in
            person or by proxy or any other matter with respect to the exercise
            of any such right to vote; provided, however, that each meeting
            shall be conducted in the United States (as that term is defined in
            Treasury Regulations Section 301.7701-7).

                                   ARTICLE XII

                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
                              AND DELAWARE TRUSTEE

            SECTION 12.1. Representations and Warranties of Institutional
Trustee. The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee, that:

            (a) the Institutional Trustee is a banking corporation or national
association with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware or the United States of
America, respectively, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration;

            (b) the Institutional Trustee has a combined capital and surplus of
at least fifty million U.S. dollars ($50,000,000);

                                       49
<PAGE>

            (c) the Institutional Trustee is not an Affiliate of the Sponsor,
nor does the Institutional Trustee offer or provide credit or credit enhancement
to the Trust;

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

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

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

            SECTION 12.2. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:

            (a) if it is not a natural person, the Delaware Trustee is duly
organized, validly existing and in good standing under the laws of the State of
Delaware;

            (b) if it is not a natural person, the execution, delivery and
performance by the Delaware Trustee of this Declaration has been duly authorized
by all necessary corporate action on the part of the Delaware Trustee, and this
Declaration has been duly executed and delivered by the Delaware Trustee, and
under Delaware law (excluding any securities laws) constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether considered in a proceeding in equity or at law);

            (c) if it is not a natural person, the execution, delivery and
performance of this Declaration by the Delaware Trustee does not conflict with
or constitute a breach of the charter or by-laws of the Delaware Trustee;

            (d) it has trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration;

                                       50
<PAGE>

            (e) no consent, approval or authorization of, or registration with
or notice to, any state or federal banking authority governing the trust powers
of the Delaware Trustee is required for the execution, delivery or performance
by the Delaware Trustee of this Declaration; and

            (f) the Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, it is an entity which has its
principal place of business in the State of Delaware and, in either case, a
Person that satisfies for the Trust the requirements of Section 3807 of the
Statutory Trust Act.

                                  ARTICLE XIII

                                  MISCELLANEOUS

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

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

                        National Interstate Capital Trust I
                        c/o National Interstate Corporation
                        3250 Interstate Drive Richfield, OH
                        44286 Attention: Michael A. Schroeder
                        Telecopy: 330-659-8902
                        Telephone: 330-659-8900

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

                        Wilmington Trust Company
                        Rodney Square North
                        1100 North Market Street
                        Wilmington, DE 19890-0001
                        Attention: Corporate Trust Administration
                        Telecopy: 302-651-8882
                        Telephone: 302-651-1000

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

                        Wilmington Trust Company

                                       51
<PAGE>

                        Rodney Square North
                        1100 North Market Street
                        Wilmington, DE 19890-0001
                        Attention: Corporate Trust Administration
                        Telecopy: 302-651-8882
                        Telephone: 302-651-1000

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

                        National Interstate Corporation
                        3250 Interstate Drive
                        Richfield, OH 44286
                        Attention: Michael A. Schroeder
                        Telecopy: 330-659-8902
                        Telephone: 330-659-8900

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

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

            SECTION 13.2. Governing Law. This Declaration and the rights and
obligations of the parties hereunder shall be governed by and interpreted in
accordance with the law of the State of Delaware and all rights, obligations and
remedies shall be governed by such laws without regard to the principles of
conflict of laws of the State of Delaware or any other jurisdiction that would
call for the application of the law of any jurisdiction other than the State of
Delaware.

            SECTION 13.3. Submission to Jurisdiction.

            (a) Each of the parties hereto agrees that any suit, action or
proceeding arising out of or based upon this Declaration, or the transactions
contemplated hereby, may be instituted in any of the courts of the State of New
York and the United States District Courts, in each case located in the Borough
of Manhattan, City and State of New York, and further agrees to submit to the
jurisdiction of any competent court in the place of its corporate domicile in
respect of actions brought against it as a defendant. In addition, each such
party irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of such suit,
action or proceeding brought in any such court and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum and irrevocably waives any right to which it
may be entitled on account of its place of corporate domicile. Each such party
hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or relating to this Declaration or the

                                       52
<PAGE>

transactions contemplated hereby. Each such party agrees that final judgment in
any proceedings brought in such a court shall be conclusive and binding upon it
and may be enforced in any court to the jurisdiction of which it is subject by a
suit upon such judgment.

            (b) Each of the Sponsor, the Trustees, the Administrators and the
Holder of the Common Securities irrevocably consents to the service of process
on it in any such suit, action or proceeding by the mailing thereof by
registered or certified mail, postage prepaid, to it at its address given in or
pursuant to Section 13.1 hereof.

            (c) To the extent permitted by law, nothing herein contained shall
preclude any party from effecting service of process in any lawful manner or
from bringing any suit, action or proceeding in respect of this Declaration in
any other state, country or place.

            SECTION 13.4. Intention of the Parties. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.

            SECTION 13.5. Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.

            SECTION 13.6. Successors and Assigns. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.

            SECTION 13.7. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.

            SECTION 13.8. Counterparts. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees and Administrators to any
of such counterpart signature pages. All of such counterpart signature pages
shall be read as though one, and they shall have the same force and effect as
though all of the signers had signed a single signature page.

                                       53
<PAGE>

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

                                        WILMINGTON TRUST COMPANY, as Delaware
                                            Trustee

                                        By: /s/ Alan Spachman
                                            ---------------------------------
                                            Name:  Alan Spachman
                                            Title: President

                                        WILMINGTON TRUST COMPANY,
                                            as Institutional Trustee

                                        By: /s/ Donald G. MacKelcan
                                            ---------------------------------
                                            Name:  Donald G. MacKelcan
                                            Title: Vice President

                                        NATIONAL INTERSTATE CORPORATION, as
                                            Sponsor

                                        By: /s/ Alan Spachman
                                            ---------------------------------
                                            Name:  Alan Spachman
                                            Title: President

                                        /s/ Alan R. Spachman
                                        -----------------------
                                        Alan R. Spachman,
                                            as Administrator

                                        /s/ Gary N. Monda
                                        -----------------------
                                        Gary N. Monda,
                                            as Administrator

                                        /s/ Michael A. Schroeder
                                        ------------------------
                                        Michael A. Schroeder,
                                            as Administrator

                                       54
<PAGE>

                                     ANNEX I

                                    TERMS OF
                    CAPITAL SECURITIES AND COMMON SECURITIES

            Pursuant to Section 6.1 of the Amended and Restated Declaration of
Trust, dated as of May 22, 2003 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities and the Common
Securities (collectively, the "Securities") are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Declaration):

            1. Designation and Number.

            (a) Capital Securities. 15,000 Capital Securities of National
Interstate Capital Trust I (the "Trust"), with an aggregate liquidation amount
with respect to the assets of the Trust of FIFTEEN MILLION Dollars ($15,000,000)
and a liquidation amount with respect to the assets of the Trust of $1,000 per
Capital Security, are hereby designated for the purposes of identification only
as the "InCapS(SM)" (the "Capital Securities"). The Capital Security
Certificates evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange on which the Capital Securities
are listed, if any.

            (b) Common Securities. 464 Common Securities of the Trust (the
"Common Securities") will be evidenced by Common Security Certificates
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice. In the absence of an Event of Default, the Common
Securities will have an aggregate liquidation amount with respect to the assets
of the Trust of FOUR HUNDRED AND SIXTY-FOUR THOUSAND Dollars ($464,000) and a
liquidation amount with respect to the assets of the Trust of $1,000 per Common
Security.

            2. Distributions. (a) Distributions payable on each Security will be
payable at a floating rate of interest per annum, which, with respect to any
Distribution Period (as defined herein), will be equal to LIBOR, as determined
on the LIBOR Determination Date for such Distribution Period, plus 4.20% (the
"Coupon Rate"); provided, that the Coupon Rate for any Distribution Period prior
to the Distribution Period commencing on the Distribution Payment Date (as
defined herein) in May 2008 may not exceed 12.5% per annum; provided, further,
that the Coupon Rate for any Distribution Period may not exceed the Interest
Rate (as defined in the Indenture) for the related Interest Period (as defined
in the Indenture). Distributions in arrears for more than one Distribution
Period will bear interest thereon, compounded quarterly, at the applicable
Coupon Rate for each Distribution Period thereafter (to the extent permitted by
applicable law). The term "Distributions", as used herein, includes cash
Distributions, any such compounded Distributions and any Additional Interest
payable on the Debentures unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Institutional Trustee and to the extent the Institutional Trustee has funds
legally available in the Property Account therefor. The amount of Distributions
payable for any Distribution Period will be computed on the basis of a 360-day
year and the actual number of days elapsed in such Distribution Period;
provided, however, that if the Special Redemption

                                     A-I-1
<PAGE>

Date is before May 23, 2008, the amounts payable upon redemption of the
Securities pursuant to this Declaration shall be calculated as set forth in the
definition of Special Redemption Price.

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

            (b) LIBOR shall be determined by the Calculation Agent for each
Distribution Period in accordance with the following provisions:

                  (1) On the second LIBOR Business Day (provided, that on such
            day commercial banks are open for business (including dealings in
            foreign currency deposits) in London (a "LIBOR Banking Day"), and
            otherwise the next preceding LIBOR Business Day that is also a LIBOR
            Banking Day) prior to March 1, June 1, September 1, or December 1,
            as the case may be, immediately succeeding the commencement of such
            Distribution Period (or, in the case of the first Distribution
            Period, on May 20, 2003) (each such day, a "LIBOR Determination
            Date"), LIBOR shall equal the rate, as obtained by the Calculation
            Agent, for three-month U.S. Dollar deposits in Europe, which appears
            on Telerate (as defined in the International Swap and Derivatives
            Association, Inc. 2000 Interest Rate and Currency Exchange
            Definitions) page 3750 or such other page as may replace such page
            3750, as of 11:00 a.m. (London time) on such LIBOR Determination
            Date, as reported by Bloomberg Financial Markets Commodities News or
            any successor service ("Telerate Page 3750"). "LIBOR Business Day"
            means any day that is not a Saturday, Sunday or other day on which
            commercial banking institutions in The City of New York or
            Wilmington, Delaware are authorized or obligated by law or executive
            order to be closed. If such rate is superseded on Telerate Page 3750
            by a corrected rate before 12:00 noon (London time) on such LIBOR
            Determination Date, the corrected rate as so substituted will be
            LIBOR for such LIBOR Determination Date.

                  (2) If, on such LIBOR Determination Date, such rate does not
            appear on Telerate Page 3750, the Calculation Agent shall determine
            the arithmetic mean of the offered quotations of the Reference Banks
            (as defined below) to leading banks in the London interbank market
            for three-month U.S. Dollar deposits in Europe (in an amount
            determined by the Calculation Agent) by reference to requests for
            quotations as of approximately 11:00 a.m. (London time) on such
            LIBOR Determination Date made by the Calculation Agent to the
            Reference Banks. If, on such LIBOR Determination Date, at least two
            of the Reference Banks provide such quotations, LIBOR shall equal
            the arithmetic mean of such quotations. If, on such LIBOR
            Determination Date, only one or none of the Reference Banks provide
            such a quotation, LIBOR shall be deemed to be the arithmetic mean of
            the offered quotations that at least two leading banks in The City
            of New York (as selected by the Calculation Agent) are quoting on
            such LIBOR Determination Date for three-month U.S. Dollar deposits
            in Europe at approximately 11:00 a.m. (London time) (in an amount
            determined by the

                                     A-I-2
<PAGE>

            Calculation Agent). As used herein, "Reference Banks" means four
            major banks in the London interbank market selected by the
            Calculation Agent.

                  (3) If the Calculation Agent is required but is unable to
            determine a rate in accordance with at least one of the procedures
            provided above, LIBOR for such Distribution Period shall be LIBOR in
            effect for the immediately preceding Distribution Period.

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

            (d) On each LIBOR Determination Date, the Calculation Agent shall
notify, in writing, the Sponsor and the Paying Agent of the applicable Coupon
Rate that applies to the related Distribution Period. The Calculation Agent
shall, upon the request of a Holder of any Securities, inform such Holder of the
Coupon Rate that applies to the related Distribution Period. All calculations
made by the Calculation Agent in the absence of manifest error shall be
conclusive for all purposes and binding on the Sponsor and the Holders of the
Securities. The Paying Agent shall be entitled to rely on information received
from the Calculation Agent or the Sponsor as to the applicable Coupon Rate. The
Sponsor shall, from time to time, provide any necessary information to the
Paying Agent relating to any original issue discount and interest on the
Securities that is included in any payment and reportable for taxable income
calculation purposes.

            (e) Distributions on the Securities will be cumulative, will accrue
from the date of original issuance, and will be payable, subject to extension of
Distribution Periods as described herein, quarterly in arrears on February 23,
May 23, August 23 and November 23 of each year, commencing on August 23, 2003
(each, a "Distribution Payment Date"). The Debenture Issuer has the right under
the Indenture to defer payments of interest on the Debentures by extending the
interest payment period for up to 20 consecutive quarterly periods (each such
extended interest payment period, together with all previous and future
consecutive extensions thereof, is referred to herein as an "Extension Period")
at any time and from time to time on the Debentures, subject to the conditions
described below and in the Indenture. No Extension Period may end on a date
other than a Distribution Payment Date or extend beyond the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be
(each such term as defined herein). During any Extension Period, interest will
continue to accrue on the Debentures, and interest on such accrued interest
(such accrued interest and interest thereon referred to herein as "Deferred
Interest") will accrue, at an annual rate equal to the Coupon Rate applicable
during such Extension Period, compounded quarterly from the date such Deferred
Interest would have been payable were it not for the Extension Period, to the
extent permitted by applicable law. At the end of any Extension Period, the
Debenture Issuer shall pay all Deferred Interest then accrued and unpaid on the
Debentures; provided, however, that during any Extension Period, the Debenture
Issuer may not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Debenture Issuer's capital stock, (ii) make any payment of principal or premium
or interest on or repay, repurchase or redeem any debt securities of the
Debenture Issuer that rank in all respects pari passu with or junior in interest
to the Debentures or (iii) make any payment under

                                     A-I-3
<PAGE>

any guarantees of the Debenture Issuer that rank in all respects pari passu with
or junior in interest to the Guarantee (other than (a) repurchases, redemptions
or other acquisitions of shares of capital stock of the Debenture Issuer (A) in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, (B) in connection with a dividend reinvestment or
stockholder stock purchase plan or (C) in connection with the issuance of
capital stock of the Debenture Issuer (or securities convertible into or
exercisable for such capital stock), as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange or conversion of any class or series of the Debenture
Issuer's capital stock (or any capital stock of a subsidiary of the Debenture
Issuer) for any class or series of the Debenture Issuer's capital stock or of
any class or series of the Debenture Issuer's indebtedness for any class or
series of the Debenture Issuer's capital stock, (c) the purchase of fractional
interests in shares of the Debenture Issuer's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior in interest to such
stock or (f) any payments under the Guarantee). Prior to the termination of any
Extension Period, the Debenture Issuer may further extend such Extension Period,
provided, that no Extension Period (including all previous and further
consecutive extensions that are part of such Extension Period) shall exceed 20
consecutive quarterly periods. Upon the termination of any Extension Period and
upon the payment of all Deferred Interest, the Debenture Issuer may commence a
new Extension Period, subject to the requirements herein and in the Indenture.
No interest or Deferred Interest (except any Additional Interest that may be due
and payable) shall be due and payable during an Extension Period, except at the
end thereof, but Deferred Interest shall accrue upon each installment of
interest that would otherwise have been due and payable during such Extension
Period until such installment is paid.

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

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

            (f) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Registrar on the relevant
regular record dates. The relevant "regular record dates" shall be 15 days
before the relevant Distribution Payment Dates. Distributions payable on any
Securities that are not punctually paid on any Distribution Payment Date as a
result of the Debenture Issuer having failed to make a payment under the
Debentures

                                     A-I-4
<PAGE>

when due (taking into account any Extension Period) will cease to be payable to
the Person in whose name such Securities are registered on the original relevant
regular record date, and such defaulted Distributions will instead be payable to
the Person in whose name such Securities are registered on the regular record
date preceding the Distribution Payment Date on which the related Extension
Period terminates or, in the absence of an Extension Period, a special record
date therefor selected by the Administrators.

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

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

            3. Liquidation Distribution Upon Dissolution. In the event of the
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Trust (each, a "Liquidation"), the Holders of the Securities will be
entitled to receive out of the assets of the Trust legally available for
distribution to Holders of the Securities, after satisfaction of liabilities to
creditors of the Trust (to the extent not satisfied by the Debenture Issuer), an
amount in cash equal to the aggregate of the liquidation amount of $1,000 per
Security plus unpaid Distributions accrued thereon to the date of payment
(collectively, the "Liquidation Distribution"), unless: (i) the Debentures have
been redeemed in full in accordance with the terms thereof and of the Indenture;
or (ii) the Debentures in an aggregate principal amount equal to the aggregate
liquidation amount of such Securities and bearing accrued and unpaid interest in
an amount equal to the accrued and unpaid Distributions on such Securities,
after paying or making reasonable provision to pay all claims and obligations of
the Trust in accordance with Section 3808(e) of the Statutory Trust Act, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.

            The Sponsor, as the Holder of all of the Common Securities, has the
right at any time, upon receipt by the Debenture Issuer and the Institutional
Trustee for the benefit of the Trust of an opinion of nationally recognized tax
counsel, which opinion may rely on private rulings of the Internal Revenue
Service or public rulings of the Internal Revenue Service, that Holders will not
recognize any gain or loss for United States Federal income tax purposes as a
result of the distribution of Debentures, to dissolve the Trust (including,
without limitation, upon the occurrence of a Tax Event or an Investment Company
Event, each as defined herein) and, after satisfaction of liabilities to
creditors of the Trust, cause the Debentures to be distributed to the Holders of
the Securities on a Pro Rata basis in accordance with the aggregate liquidation
amount thereof.

            The Trust shall dissolve on the first to occur of (i) May 22, 2038,
the expiration of the term of the Trust, (ii) a Bankruptcy Event with respect to
the Sponsor, the Trust or the Debenture Issuer, (iii) (other than in connection
with a merger, consolidation or similar transaction permitted by the Indenture,
this Declaration or the Guarantee, as the case may be) the filing of a
certificate of dissolution or its equivalent with respect to the Sponsor or upon
the revocation of the charter of the Sponsor and the expiration of 90 days after
the date of revocation

                                     A-I-5
<PAGE>

without a reinstatement thereof, (iv) the distribution of all of the Debentures
to the Holders of the Securities, upon exercise of the right of the Holders of
all of the outstanding Common Securities to dissolve the Trust as described
above, (v) the entry of a decree of a judicial dissolution of any Holder of the
Common Securities, the Sponsor, the Trust or the Debenture Issuer, (vi) when all
of the Securities are then subject to redemption and the amounts necessary for
redemption thereof shall have been paid to the Holders in accordance with the
terms of the Securities, or (vii) before the issuance of any Securities, with
the consent of all of the Trustees and the Sponsor. As soon as practicable after
the dissolution of the Trust and upon completion of the winding up of the Trust,
the Trust shall terminate upon the filing of a certificate of cancellation with
the Secretary of State of the State of Delaware.

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

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

            Upon any Liquidation of the Trust involving a distribution of the
Debentures, if at the time of such Liquidation, the Capital Securities were
rated by at least one nationally-recognized statistical rating organization, the
Debenture Issuer will use its reasonable best efforts to obtain from at least
one such or other rating organization a rating for the Debentures.

            After the date for any distribution of the Debentures upon any
Liquidation of the Trust, (i) the Securities of the Trust will be deemed to be
no longer outstanding, (ii) any certificates representing the Capital Securities
will be deemed to represent undivided beneficial interests in such of the
Debentures as have an aggregate principal amount equal to the aggregate
liquidation amount of such Capital Securities and bearing accrued and unpaid
interest equal to accrued and unpaid distributions on such Capital Securities
until such certificates are presented to the Debenture Issuer or its agent for
transfer or reissuance (and until such certificates are so surrendered, no
payments shall be made to Holders of Securities in respect of any payments due
and payable under the Debentures) and (iii) all rights of Holders of Securities
shall cease, except

                                     A-I-6
<PAGE>

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 May 23, 2033 (the "Maturity Date")
at an amount in cash equal to 100% of the principal amount thereof plus unpaid
interest accrued thereon to such date (the "Maturity Redemption Price"). The
Debentures may be redeemed by the Debenture Issuer, at its option, in whole or
in part, on any Distribution Payment Date on or after May 23, 2008 (each, an
"Optional Redemption Date"), at the Optional Redemption Price, upon not less
than 30 nor more than 60 days' prior written notice to holders of such
Debentures. In addition, upon the occurrence and continuation of a Tax Event or
an Investment Company Event, the Debentures may be redeemed by the Debenture
Issuer, at its option, in whole but not in part, at any time within 90 days
following the occurrence of such Tax Event or Investment Company Event, as the
case may be (the "Special Redemption Date"), at the Special Redemption Price,
upon not less than 30 nor more than 60 days' prior written notice to holders of
the Debentures so long as such Tax Event or Investment Company Event, as the
case may be, is continuing. Additional interest may also be payable by the
Debenture Issuer in connection with such Tax Event or Investment Company Event
as specified in Section 10.02 of the Indenture. Any such interest received by
the Trust will be distributed promptly to Holders of the Securities on a Pro
Rata basis.

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

            "Investment Company Event" means the receipt by the Debenture Issuer
and the Institutional Trustee for the benefit of the Trust of an opinion of
counsel experienced in such matters to the effect that, as a result of a change
in law or regulation or written change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Trust is or, within

                                     A-I-7
<PAGE>

90 days of the date of such opinion will be, considered an Investment Company
that is required to be registered under the Investment Company Act, which change
or prospective change becomes effective or would become effective, as the case
may be, on or after the date of the original issuance of the Debentures.

            "Optional Redemption Price" means an amount in cash equal to 100% of
the principal amount of the Debentures being redeemed plus unpaid interest
accrued on such Debentures to the related Optional Redemption Date or, in the
case of a redemption due to the occurrence of a Special Event, to the Special
Redemption Date if the Special Redemption Date is on or after May 23, 2008.

            "Special Event" means either a Tax Event or an Investment Company
Event, or both.

            "Special Redemption Price" means, with respect to the redemption of
the Debentures following a Special Event, an amount in cash equal to (1) if the
Special Redemption Date is before May 23, 2008, the greater of (a) 100% of the
outstanding principal amount thereof or (b) as determined by the Quotation
Agent, the sum of the present value of the principal amount payable as part of
the Optional Redemption Price with respect to a redemption as of May 23, 2008,
together with the present value of interest payments calculated at a fixed rate
of interest per annum equal to 7.60% over the Remaining Life of such Debentures,
discounted to the Special Redemption Date on a quarterly basis (assuming a
360-day year consisting of twelve 30day months) at the Treasury Rate plus 2.0%,
plus, in the case of either (a) or (b), unpaid interest accrued on such
Debentures to the Special Redemption Date and (2) if the Special Redemption Date
is on or after May 23, 2008, the Optional Redemption Price for the Special
Redemption Date.

            "Comparable Treasury Issue" means, with respect to the Special
Redemption Date, the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Remaining Life that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the Remaining Life. If no United States Treasury security has a
maturity which is within a period from three months before to three months after
May 23, 2008, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.

            "Comparable Treasury Price" means, with respect to the Special
Redemption Date, (a) the average of three Reference Treasury Dealer Quotations
(as defined herein) for the Special Redemption Date received by the Quotation
Agent, after excluding the highest and lowest of five such Reference Treasury
Dealer Quotations so received, or (b) if the Quotation Agent receives fewer than
five such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations.

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

                                     A-I-8
<PAGE>

            "Quotation Agent" means Citigroup Global Markets Inc. and its
successors; provided, however, that if the foregoing shall cease to be a Primary
Treasury Dealer, the Debenture Issuer shall substitute therefor another Primary
Treasury Dealer.

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

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the 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 the Special Redemption Date.

            "Remaining Life" means the period from the Special Redemption Date
through May 23, 2008.

            "Treasury Rate" means, with respect to the Special Redemption Price,
(i) the yield, under the heading which represents the average for the week
immediately prior to the third Business Day immediately preceding the Special
Redemption Date, appearing in the most recently published statistical release
designated H.15 (519) or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Remaining Life (provided that if no maturity is within
three months before or after the Remaining Life, then the yields for the two
published maturities most closely corresponding to the Remaining Life shall be
determined and the Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding to the nearest month) or (ii) if such
release (or any successor release) is not published during the week immediately
prior to the third Business Day immediately preceding the Special Redemption
Date or does not contain such yields, the rate per annum equal to the quarterly
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 the Special
Redemption Date.

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

                                     A-I-9
<PAGE>

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

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

            (e) Redemption or Distribution Procedures.

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

                  (ii) In the event that fewer than all the outstanding Capital
      Securities are to be redeemed, the Capital Securities to be redeemed shall
      be redeemed Pro Rata from each Holder.

                  (iii) If the Securities are to be redeemed and the Trust gives
      a Redemption/Distribution Notice, which notice may only be issued if the
      Debentures are redeemed or repaid as set out in this Section (which notice
      will be irrevocable), then, provided, that the Institutional Trustee has a
      sufficient amount of cash in connection with the related redemption or
      maturity of the Debentures, the Institutional Trustee will pay the price
      payable upon redemption of the Securities to the Holders of such
      Securities by check mailed to the address of each such Holder appearing on
      the books and records of the Trust on the related date of redemption. If a
      Redemption/Distribution Notice shall have been given and funds deposited
      as required, then immediately prior to the close of business on the date
      of such deposit, Distributions will cease to accrue on the Securities so
      subject to redemption and all rights of Holders of such Securities so
      subject to redemption will cease, except the right of the Holders of such
      Securities to receive the applicable price specified in Section 4(a), but
      without interest on such price. If any date of redemption of the
      Securities falls on a day that is not a Business Day, then payment of all
      amounts payable on such date will be made on the next succeeding Business
      Day, and no additional Distributions will accrue in respect of such
      payment on such next succeeding Business Day. If any amount payable upon
      redemption of the Securities is improperly withheld or refused and not
      paid either by the Trust, the Debenture Issuer or the Sponsor as guarantor
      pursuant to the Guarantee, Distributions on such Securities will continue
      to

                                     A-I-10
<PAGE>

      accrue at the Coupon Rate applicable from the date of redemption to the
      actual date of payment, in which case the actual payment date will be
      considered the date of redemption for purposes of calculating the price
      payable upon redemption of the Securities.

            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 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
      Securities to be so redeemed or (ii) register the transfer of or exchange
      any Securities so selected for redemption, in whole or in part, except for
      the unredeemed portion of any Securities being redeemed in part.

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

                  (v) Subject to the foregoing and applicable law (including,
      without limitation, United States federal securities laws), 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, provided that such Capital Securities are delivered to the
      Institutional Trustee for cancellation.

            5. Voting Rights - Capital Securities. (a) Except as provided under
Sections 5(b) and 7 and as otherwise required by law and the Declaration, the
Holders of the Capital Securities will have no voting rights. The Administrators
are required to call a meeting of the Holders of the Capital Securities if
directed to do so by Holders of not less than 10% in liquidation amount of the
Capital Securities.

            (b) Subject to the requirements of obtaining a tax opinion by the
Institutional Trustee in certain circumstances set forth in the last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the Capital
Securities, voting separately as a class, have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waiving any past default and its
consequences that are waivable under the Indenture, (iii) exercising any right
to rescind or annul an acceleration of the principal of all the Debentures or
(iv) consenting on behalf of all the Holders of the Capital Securities to any
amendment, modification or termination of the Indenture or the Debentures where
such consent shall be required; provided, however, that, where a consent or
action under the Indenture would require the consent or act of the holders of
greater than a simple majority in principal amount of Debentures (a "Super
Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of not less
than the proportion in liquidation amount of the Capital Securities outstanding
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding. If the Institutional Trustee fails to enforce its
rights under the Debentures after the Holders of a Majority or Super Majority,
as the case may be, in liquidation amount of such Capital Securities have so
directed the Institutional

                                     A-I-11
<PAGE>

Trustee, to the fullest extent permitted by law, a Holder of the Capital
Securities may institute a legal proceeding directly against the Debenture
Issuer to enforce the Institutional Trustee's rights under the Debentures
without first instituting any legal proceeding against the Institutional Trustee
or any other person or entity. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or premium, if any, on or
principal of the Debentures on the date such interest, premium, if any, or
principal is payable (or in the case of redemption, the date of redemption),
then a Holder of the Capital Securities may directly institute a proceeding for
enforcement of payment, on or after the respective due dates specified in the
Debentures, to such Holder directly of the principal of or premium, if any, or
interest on the Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Capital Securities of such Holder. Except
with respect to directing the time, method and place of conducting a proceeding
for a remedy, the Institutional Trustee shall not take any of the actions
described in clause (i), (ii), (iii) or (iv) above unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action, the Trust will not be classified as other than a grantor trust
for United States federal income tax purposes.

            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, in the case of clause (y), where the Default relates
to the payment of principal of or premium, if any, or interest on any of the
Debentures. Such notice shall state that such Indenture Event of Default also
constitutes an Event of Default hereunder.

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

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

            In no event will Holders of the Capital Securities have the right to
vote to appoint, remove or replace the Administrators, which voting rights are
vested exclusively in the Sponsor

                                     A-I-12
<PAGE>

as the Holder of all of the Common Securities of the Trust. Under certain
circumstances as more fully described in the Declaration, Holders of Capital
Securities have the right to vote to appoint, remove or replace the
Institutional Trustee and the Delaware Trustee.

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

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

            (c) Subject to Section 6.7 of the Declaration and only after each
Event of Default (if any) with respect to the Capital Securities has been cured,
waived or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waiving any past default and its
consequences that are waivable under the Indenture, or (iii) exercising any
right to rescind or annul an acceleration of the principal of all the
Debentures, provided, however, that, where a consent or action under the
Indenture would require a Super Majority, the Institutional Trustee may only
give such consent or take such action at the written direction of the Holders of
not less than the proportion in liquidation amount of the Common Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding. Notwithstanding this Section 6(c), the
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote or consent of the Holders of the Capital Securities. Other
than with respect to directing the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action described in clause (i), (ii) or (iii) above, unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration, to the
fullest extent permitted by law, any Holder of the Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the Declaration, without first instituting
a legal proceeding against the Institutional Trustee or any other Person.

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

                                     A-I-13
<PAGE>

Holders are entitled to vote or of such matter upon which written consent is
sought and (iii) instructions for the delivery of proxies or consents.

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

            7. Amendments to Declaration and Indenture. In addition to any
requirements under Section 11.1 of the Declaration, if any proposed amendment to
the Declaration provides for, or the Trustees otherwise propose to effect, (i)
any action that would adversely affect the powers, preferences or special rights
of the Securities, whether by way of amendment to the Declaration or otherwise,
or (ii) the Liquidation of the Trust, other than as described in Section 7.1 of
the Declaration, then the Holders of outstanding Securities, voting together as
a single class, will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of a Majority in liquidation amount of the Securities affected thereby;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Capital Securities or only the Common
Securities, then only Holders of the affected Securities will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of a Majority in liquidation
amount of such Securities.

            (a) In the event the consent of the Institutional Trustee, as the
holder of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification, or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
a Super Majority, the Institutional Trustee may only give such consent at the
written direction of the Holders of not less than the proportion in liquidation
amount of the Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.

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

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

                                     A-I-14
<PAGE>

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

            9. Ranking. The Capital Securities rank pari passu with, and payment
thereon shall be made Pro Rata with, the Common Securities except that, where an
Event of Default has occurred and is continuing, the rights of Holders of the
Common Securities to receive payment of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of the
Holders of the Capital Securities with the result that no payment of any
Distribution on, or any amount payable upon the redemption of, any Common
Security, and no payment to the Holder of any Common Security on account of the
Liquidation of the Trust, shall be made unless payment in full in cash of (i)
all accrued and unpaid Distributions on all outstanding Capital Securities for
all Distribution Periods terminating on or prior thereto, (ii) all amounts
payable upon Capital Securities then subject to redemption and (iii) all amounts
payable upon Capital Securities in the event of the Liquidation of the Trust, in
each case, shall have been made or provided for, and all funds immediately
available to the Institutional Trustee shall first be applied to the payment in
full in cash of the amounts specified in clause (i), (ii) and (iii) above that
are then due and payable.

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

            11. No Preemptive Rights. The Holders of the Securities shall have
no, and the issuance of the Securities is not subject to, preemptive or similar
rights to subscribe for any additional securities.

            12. Miscellaneous. These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Guarantee and the
Indenture to a Holder without charge on written request to the Sponsor at its
principal place of business.

                                     A-I-15
<PAGE>

                                   EXHIBIT A-1

                      FORM OF CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, HEREIN AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO
YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE
SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND
(Z) THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405
UNDER THE SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH
INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A)
TO THE DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7)
OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE DEBENTURE ISSUER AND THE
TRUST PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C), (D) OR
(E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED
AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY BE

                                     A-1-1
<PAGE>

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

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

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

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

                                     A-1-2
<PAGE>

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

                                     A-1-3
<PAGE>

Certificate Number P-1                       Number of Capital Securities 15,000

                    Certificate Evidencing Capital Securities

                                       of

                       NATIONAL INTERSTATE CAPITAL TRUST I

                               Capital Securities

                (liquidation amount $1,000 per Capital Security)

            National Interstate Capital Trust I, a statutory trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that JPMorgan
Chase Bank, as Trustee for the benefit of Noteholders of InCapS Funding I, Ltd.,
is the registered owner (the "Holder") of 15,000 capital securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
designated as InCapS(SM) (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). Subject to the Declaration (as defined below), the
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this Certificate duly
endorsed and in proper form for transfer. The Capital Securities represented
hereby are issued pursuant to, and the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities shall in all respects be subject to, the provisions of the Amended
and Restated Declaration of Trust of the Trust, dated as of May 22, 2003, among
Alan R. Spachman, Gary N. Monda and Michael A. Schroeder, as Administrators,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Institutional Trustee, National Interstate Corporation, as Sponsor, and the
holders from time to time of undivided beneficial interests in the assets of the
Trust, including the designation of the terms of the Capital Securities as set
forth in Annex I to the Declaration, as the same may be amended from time to
time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee and the Indenture to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Guarantee, and the Indenture
to the Holder without charge upon written request to the Sponsor at its
principal place of business.

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

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

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

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

                                     A-1-4
<PAGE>

                                          NATIONAL INTERSTATE CAPITAL TRUST I

                                           By:__________________________________
                                           Name:
                                           Title: Administrator

                                           Dated:_______________________________

                          CERTIFICATE OF AUTHENTICATION

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

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

                                           By:__________________________________
                                               Authorized Officer

                                           Dated:_______________________________

                                     A-1-5
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

            Distributions payable on each Capital Security will be payable at a
floating rate of interest per annum, which, with respect to any Distribution
Period, will be equal to LIBOR, as determined on the LIBOR Determination Date
for such Distribution Period, plus 4.20% (the "Coupon Rate"); provided, that the
Coupon Rate for any Distribution Period prior to the Distribution Period
commencing on the Distribution Payment Date (as defined below) in May 2008 may
not exceed 12.5% per annum; provided, further, that the Coupon Rate for any
Distribution Period may not exceed the Interest Rate (as defined in the
Indenture) for the related Interest Period (as defined in the Indenture).
Distributions in arrears for more than one Distribution Period will bear
interest thereon, compounded quarterly, at the applicable Coupon Rate for each
Distribution Period thereafter (to the extent permitted by applicable law). The
term "Distributions", as used herein, includes cash Distributions, any such
compounded Distributions and any Additional Interest payable on the Debentures,
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional Trustee
and to the extent the Institutional Trustee has funds legally available in the
Property Account therefor. The amount of Distributions payable for any
Distribution Period will be computed on the basis of a 360-day year and the
actual number of days elapsed in the applicable Distribution Period; provided,
however, if the Special Redemption Date is before May 23, 2008, the amounts
payable upon redemption of this Capital Security shall be calculated as set
forth in the definition of Special Redemption Price in the Declaration.

            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 February 23, May 23, August 23 and
November 23 of each year, commencing on August 23, 2003 (each, a "Distribution
Payment Date"), subject to the Business Day convention specified in the
Declaration. The Debenture Issuer has the right under the Indenture to defer
payments of interest on the Debentures by extending the interest payment period
for up to 20 consecutive quarterly periods (each such extended interest payment
period, together with all previous and future consecutive extensions thereof, is
referred to herein as an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below and in the
Declaration and the Indenture. No Extension Period may end on a date other than
a Distribution Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be. During any
Extension Period, interest will continue to accrue on the Debentures, and
interest on such accrued interest (such accrued interest and interest thereon
referred to herein as "Deferred Interest") will accrue, at an annual rate equal
to the Coupon Rate applicable during such Extension Period, compounded quarterly
from the date such Deferred Interest would have been payable were it not for the
Extension Period, to the extent permitted by applicable law. At the end of any
Extension Period, the Debenture Issuer shall pay all Deferred Interest then
accrued and unpaid on the Debentures; provided, however, that prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such Extension Period, provided, that no Extension Period (including all
previous and further consecutive extensions that are part of such Extension
Period) shall exceed 20 consecutive quarterly periods. Upon the termination of
any Extension Period and upon the payment of all Deferred Interest, the
Debenture Issuer may commence a new Extension Period, subject to the
requirements set forth herein and in the Declaration and the Indenture. No
interest or Deferred Interest (except any Additional Interest that may be due
and payable) shall be due and payable during an Extension Period, except at the
end thereof, but Deferred Interest shall

                                     A-1-6
<PAGE>

accrue upon each installment of interest that would otherwise have been due and
payable during such Extension Period until such installment is paid.

            As a consequence of any Extension Period, Distributions will be
deferred. If Distributions are deferred, the Distributions due shall be paid on
the date that the related Extension Period terminates to Holders of the
Securities as they appear on the books and records of the Trust on the regular
record date immediately preceding the Distribution Payment Date on which such
Extension Period terminates to the extent that the Trust has funds legally
available for the payment of such Distributions in the Property Account of the
Trust.

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

                                     A-1-7
<PAGE>

                                   ASSIGNMENT

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

_______________________

_______________________

_______________________

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

_______________________

_______________________

_______________________

(Insert address and zip code of assignee),

and irrevocably appoints__________________________________________________ as
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for it, him or her.

            Date:___________________________

            Signature:____________________________

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

            Signature Guarantee:(1)_______________________

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

                                     A-1-8
<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

            THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.

            EXCEPT AS SET FORTH IN SECTION 8.1(b) OF THE DECLARATION (AS DEFINED
BELOW), THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED.

                                     A-2-1
<PAGE>

Certificate Number C-1                           Number of Common Securities 464

                    Certificate Evidencing Common Securities

                                       of

                       NATIONAL INTERSTATE CAPITAL TRUST I

            National Interstate Capital Trust I, a statutory trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that National
Interstate Corporation is the registered owner (the "Holder") of 464 common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust (liquidation amount $1,000 per Common Security)(the "Common
Securities"). The Common Securities represented hereby are issued pursuant to,
and the designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities shall in all respects be subject
to, the provisions of the Amended and Restated Declaration of Trust of the
Trust, dated as of May 22, 2003, among Alan R. Spachman, Gary N. Monda and
Michael A. Schroeder, as Administrators, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Institutional Trustee, the Holder, as
Sponsor, and the holders from time to time of undivided beneficial interests in
the assets of the Trust, including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration, as the same may be
amended from time to time (the "Declaration"). Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration and the Indenture to the Holder without
charge upon written request to the Sponsor at its principal place of business.

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

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

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

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

IN WITNESS WHEREOF, the Trust has executed this certificate this 22nd day of
May, 2003.

                                           NATIONAL INTERSTATE CAPITAL TRUST I

                                           By:__________________________________
                                           Name:
                                           Title: Administrator

                                     A-2-2
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

            Distributions payable on each Common Security will be identical in
amount to the Distributions payable on each Capital Security, which is at a
floating rate of interest per annum, which, with respect to any Distribution
Period, will be equal to LIBOR, as determined on the LIBOR Determination Date
for such Distribution Period, plus 4.20% (the "Coupon Rate"); provided, that the
Coupon Rate for any Distribution Period prior to the Distribution Period
commencing on the Distribution Payment Date (as defined below) in May 2008 may
not exceed 12.5% per annum; provided, further, that the Coupon Rate for any
Distribution Period may not exceed the Interest Rate (as defined in the
Indenture) for the related Interest Period (as defined in the Indenture).
Distributions in arrears for more than one Distribution Period will bear
interest thereon, compounded quarterly, at the applicable Coupon Rate for each
Distribution Period thereafter (to the extent permitted by applicable law). The
term "Distributions", as used herein, includes cash Distributions, any such
compounded Distributions and any Additional Interest payable on the Debentures,
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional Trustee
and to the extent the Institutional Trustee has funds legally available in the
Property Account therefor. The amount of Distributions payable for any
Distribution Period will be computed on the basis of a 360-day year and the
actual number of days elapsed in the applicable Distribution Period; provided,
however, that if the Special Redemption Date is before May 23, 2008, the amounts
payable upon redemption of this Common Security shall be calculated as set forth
in the definition of Special Redemption Price in the Declaration.

            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 February 23, May 23, August 23 and
November 23 of each year, commencing on August 23, 2003 (each, a "Distribution
Payment Date"), subject to the Business Day convention specified in the
Declaration. The Debenture Issuer has the right under the Indenture to defer
payments of interest on the Debentures by extending the interest payment period
for up to 20 consecutive quarterly periods (each such extended interest payment
period, together with all previous and future consecutive extensions thereof, is
referred to herein as an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below and in the
Declaration and the Indenture. No Extension Period may end on a date other than
a Distribution Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be. During any
Extension Period, interest will continue to accrue on the Debentures, and
interest on such accrued interest (such accrued interest and interest thereon
referred to herein as "Deferred Interest") will accrue, at an annual rate equal
to the Coupon Rate applicable during such Extension Period, compounded quarterly
from the date such Deferred Interest would have been payable were it not for the
Extension Period, to the extent permitted by applicable law. At the end of any
Extension Period, the Debenture Issuer shall pay all Deferred Interest then
accrued and unpaid on the Debentures; provided, however, that prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such Extension Period, provided, that no Extension Period (including all
previous and further consecutive extensions that are part of such Extension
Period) shall exceed 20 consecutive quarterly periods. Upon the termination of
any Extension Period and upon the payment of all Deferred Interest, the
Debenture Issuer may commence a new Extension Period, subject to the
requirements set forth herein and in the Declaration and the Indenture. No
interest or Deferred Interest (except any Additional Interest that may be due
and payable) shall be due

                                     A-2-3
<PAGE>

and payable during an Extension Period, except at the end thereof, but Deferred
Interest shall accrue upon each installment of interest that would otherwise
have been due and payable during such Extension Period until such installment is
paid.

            As a consequence of any Extension Period, Distributions will be
deferred. If Distributions are deferred, the Distributions due shall be paid on
the date that the related Extension Period terminates to Holders of the
Securities as they appear on the books and records of the Trust on the regular
record date immediately preceding the Distribution Payment Date on which such
Extension Period terminates to the extent that the Trust has funds legally
available for the payment of such Distributions in the Property Account of the
Trust.

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

                                     A-2-4
<PAGE>

                                   ASSIGNMENT

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

_________________________

_________________________

_________________________

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

_________________________

_________________________

_________________________

(Insert address and zip code of assignee),

and irrevocably appoints___________________________________ as agent to
transfer this Capital Security Certificate on the books of the Trust. The agent
may substitute another to act for it, him or her.

                  Date:___________________________

                  Signature:____________________________

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

                  Signature Guarantee:(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-2-5
<PAGE>

                                                                       EXHIBIT B

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

                                                           ______________, [   ]

National Interstate Corporation
National Interstate Capital Trust I
3250 Interstate Drive
Richfield, Ohio 44286

Re: Purchase of $1,000 liquidation amount of InCapS(SM)
     (the "Capital Securities") of National Interstate Capital Trust I

Ladies and Gentlemen:

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

            1. We understand that the InCapS(SM) (the "Capital Securities") of
National Interstate Capital Trust I (the "Trust") have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or sold except as permitted in the following sentence. We agree on our
own behalf and on behalf of any investor account for which we are purchasing the
Capital Securities that, if we decide to offer, sell or otherwise transfer any
such Capital Securities prior to the date which is the later of (i) two years
(or such shorter period of time as permitted by Rule 144(k) of the Securities
Act) after the later of (Y) the date of original issuance of the Capital
Securities and (Z) the last date on which the Trust or any Affiliate (as defined
in Rule 405 under the Securities Act) of the Trust was the holder of any such
Capital Securities (or any predecessor thereto) and (ii) such later date, if
any, as may be required by any subsequent change in applicable law (the "Resale
Restriction Termination Date"), then such offer, sale or other transfer will be
made only (a) to the Company or the Trust, (b) pursuant to Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB"), that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (c) pursuant to an exemption from registration, to an
"accredited investor" within the meaning of subparagraph (a) (1), (2), (3), (7)
or (8) of Rule 501 under the Securities Act that is acquiring any such Capital
Securities for its own account or for the account of such an accredited investor
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act, or
(d) pursuant to another available exemption from the registration requirements
of the Securities Act, and in each of the foregoing cases in accordance with any
applicable state securities laws and any requirements of law that govern the
disposition of our property. If any resale or other transfer of the Capital
Securities is proposed to be made pursuant to clause (c) or (d) above, the
transferor shall deliver a letter from the transferee substantially in the form
of this letter to the Institutional Trustee as Transfer Agent, which shall
provide as applicable, among other things, that the transferee is an accredited
investor within the meaning of subparagraph (a)(1), (2), (3), (7) or (8) of Rule
501 under the Securities Act that is acquiring such Capital Securities for
investment purposes and not for any distribution in violation of the Securities
Act. We acknowledge on our

                                      B-1
<PAGE>

behalf and on behalf of any investor account for which we are purchasing Capital
Securities that the Company and the Trust reserve the right prior to any offer,
sale or other transfer pursuant to clause (c) or (d) to require the delivery of
any opinion of counsel, certifications and/or other information satisfactory to
National Interstate Corporation (the "Company") and the Trust. We understand
that the certificates for any Capital Securities that we receive prior to the
Resale Restriction Termination Date will bear a legend substantially to the
effect of the foregoing.

            2. We are an accredited investor within the meaning of subparagraph
(a) (1), (2), (3), (7) or (8) of Rule 501 under the Securities Act purchasing
for our own account or for the account of such an accredited investor, and we
are acquiring the Capital Securities for investment purposes and not with view
to, or for offer or sale in connection with, any distribution in violation of
the Securities Act, and we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Capital Securities, and we and any account for which we are
acting are each able to bear the economic risks of our or its investment.

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

            4. In the event that we purchase any Capital Securities, we will
acquire such Capital Securities having an aggregate liquidation amount of not
less than $100,000 for our own account and for each separate account for which
we are acting.

            5. We acknowledge that we either (A) are not a fiduciary of a
pension, profitsharing or other employee benefit plan or arrangement subject to
the Employee Retirement Income Security Act of 1974, as amended or to Section
4975 of the Internal Revenue Code of 1986, as amended (a "Plan"), or an entity
whose assets include "plan assets" by reason of any Plan's investment in the
entity and are not purchasing the Capital Securities on behalf of or with "plan
assets" by reason of any Plan's investment in the entity and are not purchasing
the Capital Securities on behalf of or with "plan assets" of any Plan or (B) are
eligible for the exemptive relief available under one or more of the following
prohibited transaction class exemptions ("PTCEs") issued by the U.S. Department
of Labor: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.

            6. We acknowledge that each Plan, by its purchase of the Capital
Securities, will be deemed to have directed the Trust to invest in the
Debentures, and to have consented to the appointment of the Institutional
Trustee.

            7. We acknowledge that the Company, the Trust and others will rely
upon the truth and accuracy of the foregoing acknowledgments, representations,
warranties and agreements and agree that if any of our acknowledgments,
representations, warranties and agreements are no longer accurate, we shall
promptly notify the Placement Agent. If we are acquiring any Capital Securities
as a fiduciary or agent for one or more investor accounts, we represent that we
have sole discretion with respect to each such investor account and that we

                                      B-2
<PAGE>

have full power to make the foregoing acknowledgments, representations and
agreements on behalf of each such investor account.

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

                                           _____________________________________
                                           (Name of Purchaser)

                                           By:__________________________________

                                           Date:________________________________

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

Name:____________________________________

Address:_________________________________

Taxpayer ID Number:

                                      B-3
<PAGE>

                                    EXHIBIT C

                         FORM OF TRANSFEROR CERTIFICATE
                             TO BE EXECUTED FOR QIBs

                                                              __________, [    ]

National Interstate Corporation
National Interstate Capital Trust I
3250 Interstate Drive Richfield,
Ohio 44286

Re: Purchase of $1,000 liquidation amount of InCapS(SM)
     (the "Capital Securities") of National Interstate Capital Trust I__________

            Reference is hereby made to the Amended and Restated Declaration of
Trust of National Interstate Capital Trust I, dated as of [CLOSING DATE] (the
"Declaration"), among Alan R. Spachman, Gary N. Monda and Michael A. Schroeder,
as Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington
Trust Company, as Institutional Trustee, National Interstate Corporation, as
Sponsor, and the holders from time to time of undivided beneficial interests in
the assets of National Interstate Capital Trust I. Capitalized terms used but
not defined herein shall have the meanings given them in the Declaration.

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

            In accordance with Section 8.2(b) of the Declaration, the Transferor
does hereby certify that such Capital Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Capital
Securities and (ii) Rule 144A under the Securities Act ("Rule 144A"), to a
transferee that the Transferor reasonably believes is purchasing the Capital
Securities for its own account or an account with respect to which the
transferee exercises sole investment discretion and the transferee and any such
account is a "qualified institutional buyer" within the meaning of Rule 144A, in
a transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.

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

                                         By:____________________________________
                                            Name:_______________________________
                                            Title:______________________________
                                            Date:_______________________________

                                       C-1
<PAGE>

                                   EXHIBIT D

                         FORM OF OFFICERS' CERTIFICATE

                           QUARTERLY FINANCIAL REPORT

TO: Wilmington Trust Company
Roiney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001 Attention:
Corporate Trust Administration

            PLEASE COMPLETE FOR EACH INSURANCE SUBSIDIARY

<TABLE>
<S>                                                                                     <C>
Name of Insurance Company:_________________________________

Date of Report:                                                                                 _______

Current A.M. Best Insurer's Financial Strength Rating:                                          _______

Please provide the following information for the most recent quarterly period ended

Quarter: [ ] March 31 [ ] June 30 [ ] September 30 [ ] December 31 Year: 20______________

Most Recently Reported NAIC Risk Based Capital Ratio                                    _______________%

Total Policyholders' Surplus                                                            $______________

Ratio of Consolidated Debt and Preferred Stock
to Total Policyholders' Surplus                                                         _______________%

Total Admitted Assets                                                                   $______________

Ratio of NAIC Class 1 & 2 Rated Investments
to Total Fixed Income Investments                                                       _______________%

Ratio of NAIC Class 1 & 2 Rated Investments to
Total Investments                                                                       _______________%

Return on Policyholders' Surplus for the Trailing Twelve Month Period                   _______________%

For Property & Casualty Companies:

Expense Ratio                                                                           _______________%

Loss and LAE Ratio                                                                      _______________%

Combined Ratio                                                                          _______________%
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                     <C>
Net Premiums Written (trailing twelve month period)
to Policyholders' Surplus                                                               _______________%
</TABLE>

<PAGE>

                                  CERTIFICATION

            The undersigned hereby certifies that he/she has duly executed the
attached Quarterly Financial Report, dated____________________________________,
for and on behalf of_______________________, that he/she is
the________________________of such Company, and that he/she has authority to
execute and file such instrument. The undersigned further certifies that he/she
is familiar with such instrument and that the facts therein set forth are true
to the best of his/her knowledge, information and belief.

                                           Name:________________________________

<PAGE>

                                     LEGEND

<TABLE>
<S>                                           <C>
NAIC Risk Based Capital Ratio-P&C             (Total Adjusted Capital (as defined in the
                                              NAIC RBC Instructions for P&C Insurers)
                                              /Authorized Control Level Risk-Based Capital)

NAIC Risk Based Capital Ratio-Life            (Total Adjusted Capital (as defined in the
                                              NAIC RBC Instructions for Life Insurers)
                                              /Authorized Control Level Risk-Based Capital)

Total Capital and Surplus-Life                Common Capital Stock + Preferred Capital
                                              Stock + Aggregate Write-Ins for other than
                                              special surplus funds + Surplus Notes + Gross
                                              Paid-In and Contributed Surplus + Aggregate
                                              Write-Ins for Special Surplus Funds +
                                              Unassigned Funds (Surplus) + Asset Valuation
                                              Reserve - Treasury Stock

Total Capital and Surplus-P&C                 Aggregate Write-Ins for Special Surplus Funds
                                              + Common Capital Stock + Preferred Capital
                                              Stock + Aggregate Write-Ins for other than
                                              special surplus funds + Surplus Notes +Gross
                                              Paid-In and Contributed Surplus +
                                              Unassigned Funds (Surplus) - Treasury Stock

Total Admitted Assets                         Total admitted assets as determined in
                                              accordance with statutory accounting
                                              principles

Return on Policyholders' Surplus for the      Net Income/Policyholders' Surplus for the
Trailing Twelve Month Period                  Trailing Twelve Month Period

Expense Ratio                                 Other Underwriting Expenses Incurred/Net
                                              premiums Earned

Loss and LAE Ratio                            (Losses Incurred + Loss Expenses
                                              Incurred)/Net Premiums Earned

Combined Ratio                                Expense Ratio + Loss and LAE Ratio

Net Premiums Written (trailing twelve month   Net Premiums Written of the trailing twelve
period) to Policyholders' Surplus             month period/Policyholders' Surplus
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]