Document:

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                        AMENDED AND RESTATED DECLARATION
                                    OF TRUST

                                  by and among

                       STATE STREET BANK AND TRUST COMPANY
                      OF CONNECTICUT, NATIONAL ASSOCIATION,
                            as Institutional Trustee,

                               NORTH BAY BANCORP,
                                   as Sponsor,

                                       and
                TERRY L. ROBINSON, DALE BRAIN and LEE-ANN CIMINO
                               as Administrators,

                            Dated as of June 26, 2002

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

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                                            TABLE OF CONTENTS
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ARTICLE I INTERPRETATION AND DEFINITIONS ...................................................       1
      Section 1.1.     Definitions .........................................................       1

ARTICLE II  ORGANIZATION ...................................................................       7
      Section 2.1.     Name ................................................................       7
      Section 2.2.     Office ..............................................................       7
      Section 2.3.     Purpose .............................................................       7
      Section 2.4.     Authority ...........................................................       7
      Section 2.5.     Title to Property of the Trust ......................................       7
      Section 2.6.     Powers and Duties of the Institutional Trustee and the Administrators       8
      Section 2.7.     Prohibition of Actions by the Trust and the Institutional Trustee ...      11
      Section 2.8.     Powers and Duties of the Institutional Trustee ......................      12
      Section 2.9.     Certain Duties and Responsibilities of the Institutional Trustee and
                       Administrators ......................................................      13
      Section 2.10.    Certain Rights of Institutional Trustee .............................      14
      Section 2.11.    Execution of Documents ..............................................      16
      Section 2.12.    Not Responsible for Recitals or Issuance of Securities ..............      16
      Section 2.13.    Duration of Trust ...................................................      16
      Section 2.14.    Mergers .............................................................      16

ARTICLE III SPONSOR ........................................................................      18
      Section 3.1.     Sponsor's Purchase of Common Securities .............................      18
      Section 3.2.     Responsibilities of the Sponsor .....................................      18
      Section 3.3.     Expenses ............................................................      18
      Section 3.4.     Right to Proceed ....................................................      19

ARTICLE IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS ........................................      19
      Section 4.1.     Institutional Trustee: Eligibility ..................................      19
      Section 4.2.     Administrators ......................................................      20
      Section 4.3.     Appointment, Removal and Resignation of Institutional Trustee and
                       Administrators ......................................................      20
      Section 4.4.     Institutional Trustee Vacancies .....................................      21
      Section 4.5.     Effect of Vacancies .................................................      21
      Section 4.6.     Meetings of the Institutional Trustee and the Administrators ........      21
      Section 4.7.     Delegation of Power .................................................      22
      Section 4.8.     Conversion, Consolidation or Succession to Business .................      22

ARTICLE V DISTRIBUTIONS ....................................................................      22
      Section 5.1.     Distributions .......................................................      22

ARTICLE VI ISSUANCE OF SECURITIES ..........................................................      22
      Section 6.1.     General Provisions Regarding Securities .............................      22
      Section 6.2.     Paying Agent, Transfer Agent and Registrar ..........................      23
      Section 6.3.     Form and Dating .....................................................      23
      Section 6.4.     Mutilated, Destroyed, Lost or Stolen Certificates ...................      24
      Section 6.5.     Temporary Securities ................................................      24
      Section 6.6.     Cancellation ........................................................      24
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                                       i
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      Section 6.7.     Rights of Holders; Waivers of Past Defaults .......................        24

ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST .........................................        26
      Section 7.1.     Dissolution and Termination of Trust ..............................        26

ARTICLE VIII TRANSFER OF INTERESTS .......................................................        27
      Section 8.1.     General ...........................................................        27
      Section 8.2.     Transfer Procedures and Restrictions ..............................        28
      Section 8.3.     Deemed Security Holders ...........................................        30

ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS      30
      Section 9.1.     Liability .........................................................        30
      Section 9.2.     Exculpation .......................................................        30
      Section 9.3.     Fiduciary Duty ....................................................        31
      Section 9.4.     Indemnification ...................................................        31
      Section 9.5.     Outside Businesses ................................................        33
      Section 9.6.     Compensation: Fee .................................................        33

ARTICLE X ACCOUNTING .....................................................................        34
      Section 10.1.    Fiscal Year .......................................................        34
      Section 10.2.    Certain Accounting Matters ........................................        34
      Section 10.3.    Banking ...........................................................        34
      Section 10.4.    Withholding .......................................................        34

ARTICLE XI AMENDMENTS AND MEETINGS .......................................................        35
      Section 11.1.    Amendments ........................................................        35
      Section 11.2.    Meetings of the Holders of Securities; Action by Written Consent ..        36

ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE .....................................        37
      Section 12.1.    Representations and Warranties of Institutional Trustee ...........        37

ARTICLE XIII MISCELLANEOUS ...............................................................        38
      Section 13.1.    Notices ...........................................................        38
      Section 13.2.    Governing Law .....................................................        39
      Section 13.3.    Intention of the Parties ..........................................        39
      Section 13.4.    Headings ..........................................................        39
      Section 13.5.    Successors and Assigns ............................................        39
      Section 13.6.    Partial Enforceability ............................................        39
      Section 13.7.    Counterparts ......................................................        39

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

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                           NORTH BAY STATUTORY TRUST I

                                  June 26, 2002

         AMENDED AND RESTATED  DECLARATION  OF TRUST  ("Declaration")  dated and
effective as of June 26, 2002, by the Institutional Trustee (as defined herein),
the Administrators  (as defined herein),  the Sponsor (as defined herein) and by
the holders,  from time to time, of undivided  beneficial interests in the Trust
(as defined herein) to be issued pursuant to this Declaration;

         WHEREAS, the Institutional  Trustee, the Administrators and the Sponsor
established  North Bay Statutory Trust I (the "Trust"),  a statutory trust under
the Statutory Trust Act (as defined  herein)  pursuant to a Declaration of Trust
dated as of June 5, 2002 (the  "Original  Declaration"),  and a  Certificate  of
Trust filed with the Secretary of State of the State of  Connecticut  on June 5,
2002,  for  the  sole  purpose  of  issuing  and  selling   certain   securities
representing  undivided  beneficial  interests  in the  assets  of the Trust and
investing the proceeds thereof in certain debentures of the Debenture Issuer (as
defined herein);

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

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

         NOW,  THEREFORE,  it being  the  intention  of the  parties  hereto  to
continue the Trust as a statutory  trust under the Statutory  Trust Act and that
this Declaration  constitutes the governing  instrument of such statutory trust,
the Institutional Trustee declares that all assets contributed to the Trust will
be held in trust for the  benefit  of the  holders,  from  time to time,  of the
securities  representing  undivided  beneficial  interests  in the assets of the
Trust issued  hereunder,  subject to the  provisions  of this  Declaration.  The
parties hereto hereby agree as follows:

                                    ARTICLE I

                         INTERPRETATION AND DEFINITIONS

         Section 1.1. Definitions. Unless the context otherwise requires:

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

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

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

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

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

                                       1
<PAGE>

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

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

         "Administrators"  means  each of  Terry L.  Robinson,  Dale  Brain  and
Lee-Ann Cimino,  solely in such Person's  capacity as Administrator of the Trust
created and continued hereunder and not in such Person's individual capacity, or
such  Administrator's  successor in interest in such capacity,  or any successor
appointed as herein provided.

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

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

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

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

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

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

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

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

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

         "Certificate" means any certificate evidencing Securities.

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

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

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

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

                                       2
<PAGE>

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

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

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

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

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

         "Debenture Issuer" means North Bay Bancorp,  a California  corporation,
in its capacity as issuer of the Debentures under the Indenture.

         "Debenture  Trustee"  means  State  Street  Bank and Trust  Company  of
Connecticut,  National  Association,  as  trustee  under the  Indenture  until a
successor is appointed thereunder, and thereafter means such successor trustee.

         "Debentures"  means the Floating  Rate Junior  Subordinated  Deferrable
Interest  Debentures  due 2032 to be issued by the  Debenture  Issuer  under the
Indenture.

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

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

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

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

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

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

         "Distribution  Rate" means, for the period beginning on (and including)
the date of original issuance and ending on (but excluding)  September 26, 2002,
5.3369%,  and for the period beginning on (and including) September 26, 2002 and
thereafter, the Coupon Rate.

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

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

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

                                       3
<PAGE>

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

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

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

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

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

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

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

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

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

         "Indenture"  means the Indenture dated as of the Closing Date,  between
the Debenture Issuer and the Debenture Trustee,  and any indenture  supplemental
thereto pursuant to which the Debentures are to be issued, as such Indenture and
any supplemental  indenture may be amended,  supplemented or otherwise  modified
from time to time.

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

         "Institutional  Trustee"  means the  Trustee  meeting  the  eligibility
requirements set forth in Section 4.1.

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

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

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

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

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

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

                                       4
<PAGE>

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

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

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

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

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

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

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

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

         "Paying Agent" has the meaning specified in Section 6.2.

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

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

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

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

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

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

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

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

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

                                       5
<PAGE>

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

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

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

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

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

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

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

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

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

         "Sponsor"  means North Bay Bancorp,  a California  corporation,  or any
successor entity in a merger, consolidation or amalgamation,  in its capacity as
sponsor of the Trust.

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

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

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

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

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

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

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

         "3-Month LIBOR" has the meaning set forth in paragraph 4(a) of Annex I.

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

                                       6
<PAGE>

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

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

         "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 "North Bay Statutory Trust I,"
as such name may be modified from time to time by the Administrators following
written notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrators.

         Section 2.2.  Office.  The address of the principal office of the Trust
is do State Street Bank and Trust Company of Connecticut,  National Association,
225 Asylum Street, Goodwin Square,  Hartford,  Connecticut 06103. On at least 10
Business   Days  written   notice  to  the  Holders  of  the   Securities,   the
Administrators may designate another principal office, which shall be in a state
of the United States or in the District of Columbia.

         Section 2.3. Purpose. The exclusive purposes and functions of the Trust
are (a) to issue  and  sell the  Securities  representing  undivided  beneficial
interests in the assets of the Trust, (b) to invest the gross proceeds from such
sale to acquire the  Debentures,  (c) to  facilitate  direct  investment  in the
assets of the Trust through  issuance of the Common  Securities  and the Capital
Securities and (d) except as otherwise  limited herein,  to engage in only those
other  activities  necessary or incidental  thereto.  The Trust shall not borrow
money,  issue debt or reinvest proceeds derived from investments,  pledge any of
its assets,  or otherwise  undertake (or permit to be  undertaken)  any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.

         Section  2.4.  Authority.  Except  as  specifically  provided  in  this
Declaration,  the  Institutional  Trustee  shall  have  exclusive  and  complete
authority  to carry  out the  purposes  of the  Trust.  An  action  taken by the
Institutional  Trustee in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Institutional Trustee acting on
behalf of the Trust,  no Person shall be required to inquire into the  authority
of the Institutional  Trustee to bind the Trust.  Persons dealing with the Trust
are  entitled  to  rely   conclusively   on  the  power  and  authority  of  the
Institutional Trustee as set forth in this Declaration. The Administrators shall
have  only  those   ministerial   duties  set  forth   herein  with  respect  to
accomplishing  the  purposes of the Trust and are not  intended to be tmstees 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.

                                       7
<PAGE>

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

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

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

                           (A) the issuance and sale of the Securities;

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

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

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

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

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

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

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

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

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

                                       8
<PAGE>

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

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

                           (A) the establishment of the Property Account;

                           (B) the receipt of the Debentures;

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

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

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

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

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

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

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

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

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

                                       9
<PAGE>

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

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

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

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

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

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

         (d) Notwithstanding anything herein to the contrary, the Administrators
and the Holders of a Majority in liquidation amount of the Common Securities are
authorized  and  directed to conduct the affairs of the Trust and to operate the
Trust so that the  Trust  will not (i) be  deemed  to be an  Investment  Company
required to be registered under the Investment  Company Act, and (ii) fail to be
classified as a "grantor  trust" for United States  federal income tax purposes.
The  Administrators  and the Holders of a Majority in liquidation  amount of the
Common  Securities shall not take any action  inconsistent with the treatment of
the Debentures as indebtedness of the Debenture Issuer for United States federal
income tax purposes. In this connection, the Administrators and the Holders of a
Majority in liquidation  amount of the Common  Securities are authorized to take
any action,  not inconsistent  with applicable laws, the Certificate of Trust or
this Declaration,  as amended from time to time, that each of the Administrators
and the Holders of a Majority  in  liquidation  amount of the Common  Securities
determines in their discretion to be necessary or desirable for such purposes.

                                       10
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       11
<PAGE>

         Section 2.8. Powers and Duties of the Institutional Trustee.

         (a) The  legal  title to the  Debentures  shall be owned by and held of
record in the name of the Institutional  Trustee in trust for the benefit of the
Trust and the Holders of the  Securities.  The right,  title and interest of the
Institutional  Trustee to the Debentures shall vest automatically in each Person
who may  hereafter be  appointed as  Institutional  Trustee in  accordance  with
Section 4.3. Such vesting and  cessation of title shall be effective  whether or
not conveyancing  documents with regard to the Debentures have been executed and
delivered.

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

         (c) The Institutional Trustee shall:

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

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

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

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

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

                                       12
<PAGE>

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

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

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

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

         Section 2.9. Certain Duties and  Responsibilities  of the Institutional
Trustee and Administrators.

         (a) The  Institutional  Trustee,  before the occurrence of any Event of
Default and after the curing or waiving of all such  Events of Default  that may
have occurred,  shall undertake to perform only such duties as are  specifically
set forth in this  Declaration and no implied  covenants shall be read into this
Declaration  against the Institutional  Trustee. In case an Event of Default has
occurred  (that has not been  cured or waived  pursuant  to  Section  6.7),  the
Institutional  Trustee shall exercise such of the rights and powers vested in it
by this  Declaration,  and use the  same  degree  of care  and  skill  in  their
exercise,  as a prudent person would exercise or use under the  circumstances in
the conduct of his or her own affairs.

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

         (c) All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities  shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds  from the Trust  Property to enable the  Institutional  Trustee or a
Paying Agent to make payments in accordance with the terms hereof.  Each Holder,
by its acceptance of a Security,  agrees that it will look solely to the revenue
and proceeds from the Trust

                                       13
<PAGE>

Property  to the  extent  legally  available  for  distribution  to it as herein
provided  and that the  Institutional  Trustee  and the  Administrators  are not
personally liable to it for any amount  distributable in respect of any Security
or for any other liability in respect of any Security.  This Section 2.9(c) does
not  limit  the  liability  of the  Institutional  Trustee  expressly  set forth
elsewhere in this Declaration.

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

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

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

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

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

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

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

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

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

                                       14
<PAGE>

terms of this Declaration, the Institutional Trustee may deliver a notice to the
Sponsor requesting the Sponsor's written instructions as to the course of action
to be taken and the  Institutional  Trustee  shall take such action,  or refrain
from taking such action,  as the  Institutional  Trustee  shall be instructed in
writing, in which event the Institutional Trustee shall have no liability except
for its own negligence or willful misconduct;

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

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

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

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

         (g) the Institutional  Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this  Declaration  at the request or
direction  of any of the  Holders  pursuant  to this  Declaration,  unless  such
Holders shall have offered to the  Institutional  Trustee  security or indemnity
reasonably  satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;  provided,
that nothing  contained in this  Section  2.10(g)  shall be taken to relieve the
Institutional  Trustee,  subject to Section  2.9(b),  upon the  occurrence of an
Event of Default, to 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;

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

         (j)   whenever  in  the   administration   of  this   Declaration   the
Institutional  Trustee  shall deem it  desirable  to receive  instructions  with
respect to enforcing  any remedy or right or taking any other  action  hereunder
the Institutional  Trustee (i) may request  instructions from the Holders of the
Capital  Securities  which  instructions may only be given by the Holders of the
same  proportion  in  liquidation  amount of the Capital  Securities as would be
entitled  to direct the  Institutional  Trustee  under the terms of the  Capital

                                       15
<PAGE>

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;

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

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

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

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

         Section 2.11.  Execution of Documents.  Unless otherwise  determined in
writing by the Institutional  Trustee,  and except as otherwise  required by the
Statutory  Trust  Act,  the  Institutional  Trustee,  or any  one or more of the
Administrators,  as the case may be, is  authorized  to execute on behalf of the
Trust any documents that the Institutional Trustee or the Administrators, as the
case may be, have the power and authority to execute pursuant to Section 2.6.

         Section 2.12. Not  Responsible  for Recitals or Issuance of Securities.
The recitals  contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Institutional Trustee does not assume any
responsibility  for  their  correctness.  The  Institutional  Trustee  makes  no
representations as to the value or condition of the property of the Trust or any
part  thereof.  The  Institutional  Trustee makes no  representations  as to the
validity or sufficiency of this Declaration, the Debentures or the Securities.

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

          Section 2.14. Mergers.

         (a) The Trust may not consolidate,  amalgamate,  merge with or into, or
be  replaced  by,  or  convey,  transfer  or lease  its  properties  and  assets
substantially as an entirety to any corporation or other

                                       16
<PAGE>

body,  except  as  described  in this  Section  2.14(b)  and (c) and  except  in
connection  with  the  liquidation  of the  Trust  and the  distribution  of the
Debentures  to Holders of  Securities  pursuant  to  Section  7.l(a)(iv)  of the
Declaration or Section 4 of Annex I.

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       17
<PAGE>

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

                  (ix)  prior to such  merger,  consolidation,  amalgamation  or
         replacement, the Institutional Trustee shall have received an Officers'
         Certificate of the  Administrators  and an opinion of counsel,  each to
         the effect that all conditions  precedent under this Section 2.14(b) to
         such transaction have been satisfied.

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

                                   ARTICLE III

                                     SPONSOR

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

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

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

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

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

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

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

                                       18
<PAGE>

acquisition,  financing,  and disposition of Trust assets and the enforcement by
the Institutional Trustee of the rights of the Holders; and

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

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

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

                                   ARTICLE IV

                    INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

         Section 4.1. Institutional Trustee; Eligibility.

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

                  (i) not be an Affiliate of the Sponsor;

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

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

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

         (c) If the Institutional  Trustee has or shall acquire any "conflicting
interest"  within the meaning of Section 3 10(b) of the Trust  Indenture  Act of
1939, as amended, the Institutional Trustee shall either eliminate such interest
or resign,  to the extent and in the  manner  provided  by, and  subject to this
Declaration.

         (d) The initial  Institutional  Trustee  shall be State Street Bank and
Trust Company of Connecticut, National Association.

                                       19
<PAGE>

         Section 4.2. Administrators. Each Administrator shall be a U.S. Person,
21  years of age or older  and  authorized  to bind  the  Sponsor.  The  initial
Administrators shall be Terry L. Robinson,  Dale Brain and Lee-Ann Cimino. 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.

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

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

         Subject  to the  immediately  preceding  paragraph,  the  Institutional
Trustee may resign at any time by giving  written  notice thereof to the Holders
of the Securities and by appointing a Successor  Institutional Trustee. Upon the
resignation  of the  Institutional  Trustee,  the  Institutional  Trustee  shall
appoint a  successor  by  requesting  from at least  three  Persons  meeting the
eligibility  requirements,  its expenses  and charges to serve as the  successor
Institutional  Trustee on a form provided by the  Administrators,  and selecting
the  Person  who  agrees to the  lowest  expense  and  charges  (the  "Successor
Institutional  Trustee").  If the  instrument  of  acceptance  by the  Successor
Institutional Trustee required by this Section 4.3 shall not have been delivered
to the  Institutional  Trustee within 60 days after the giving of such notice of
resignation or delivery of the instrument of removal, the Institutional  Trustee
may  petition,  at the expense of the Trust,  any Federal,  state or District of
Columbia  court of competent  jurisdiction  for the  appointment  of a Successor
Institutional Trustee. Such court may thereupon,  after prescribing such notice,
if any, as it may deem proper,  appoint a Successor  Institutional  Trustee. The
Institutional  Trustee  shall  have  no  liability  for  the  selection  of such
successor pursuant to this Section 4.3.

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

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

         (b) In case of the appointment  hereunder of a Successor  Institutional
Trustee,  the retiring  Institutional  Trustee and the  Successor  Institutional
Trustee shall execute and deliver an amendment

                                       20
<PAGE>

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

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

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

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

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

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

                                       21
<PAGE>

Institutional Trustee and the Administrators together shall be held from time to
time upon the call of the Institutional Trustee or an Administrator.

         Section 4.7. Delegation of Power.

         (a) Any  Administrator  may,  by  power  of  attorney  consistent  with
applicable law,  delegate to any other natural person over the age of 21 that is
a U.S.  Person  his or her power for the  purpose  of  executing  any  documents
contemplated in Section 2.6; and

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

         Section 4.8. Conversion.  Consolidation or Succession to Business.  Any
Person into which the  Institutional  Trustee may be merged or converted or with
which  it  may be  consolidated,  or  any  Person  resulting  from  any  merger,
conversion or consolidation to which the Institutional Trustee shall be a party,
or any  Person  succeeding  to all or  substantially  all  the  corporate  trust
business  of  the   Institutional   Trustee   shall  be  the  successor  of  the
Institutional  Trustee  hereunder,  provided  such  Person  shall  be  otherwise
qualified and eligible  under this  Article,  without the execution or filing of
any paper or any further act on the part of any of the parties hereto.

                                    ARTICLE V

                                  DISTRIBUTIONS

         Section 5.1.  Distributions.  Holders  shall receive  Distributions  in
accordance  with the  applicable  terms  of the  relevant  Holder's  Securities.
Distributions  shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their  respective  terms. If and
to the extent  that the  Debenture  Issuer  makes a payment of  Interest  or any
principal on the Debentures held by the Institutional Trustee, the Institutional
Trustee  shall and is  directed,  to the  extent  funds are  available  for that
purpose, to make a distribution (a "Distribution") of such amounts to Holders.

                                   ARTICLE VI

                             ISSUANCE OF SECURITIES

         Section 6.1. General Provisions Regarding Securities.

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

                                       22
<PAGE>

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

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

         (d) Upon issuance of the  Securities  as provided in this  Declaration,
the Securities so issued shall be deemed to be validly  issued,  fully paid and,
except as provided  in Section  9.1(b)  with  respect to the Common  Securities,
non-assessable.

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

         Section 6.2.  Paying Agent.  Transfer  Agent and  Registrar.  The Trust
shall maintain in Hartford,  Connecticut,  an office or agency where the Capital
Securities  may be  presented  for payment  ("Paying  Agent"),  and an office or
agency  where  Securities  may be  presented  for  registration  of  transfer or
exchange  (the  "Transfer  Agent").  The Trust shall keep or cause to be kept at
such  office or agency a register  for the  purpose of  registering  Securities,
transfers and exchanges of  Securities,  such register to be held by a registrar
(the  "Registrar").  The  Administrators  may  appoint  the  Paying  Agent,  the
Registrar and the Transfer Agent and may appoint one or more  additional  Paying
Agents or one or more  co-Registrars,  or one or more co-Transfer Agents in such
other  locations as it shall  determine.  The term "Paying  Agent"  includes any
additional paying agent, the term "Registrar"  includes any additional registrar
or co-Registrar and the term "Transfer  Agent" includes any additional  transfer
agent.  The  Administrators  may  change  any Paying  Agent,  Transfer  Agent or
Registrar at any time without  prior  notice to any Holder.  The  Administrators
shall  notify the  Institutional  Trustee of the name and  address of any Paying
Agent,  Transfer  Agent  and  Registrar  not a party  to this  Declaration.  The
Administrators  hereby  initially  appoint the  Institutional  Trustee to act as
Paying Agent,  Transfer  Agent and Registrar for the Capital  Securities and the
Common  Securities.  The  Institutional  Trustee or any of its Affiliates in the
United States may act as Paying Agent, Transfer Agent or Registrar.

         Section  6.3.  Form  and  Dating.   The  Capital   Securities  and  the
Institutional   Trustee's   certificate  of  authentication   thereon  shall  be
substantially  in the form of Exhibit  A-l, 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

                                       23
<PAGE>

endorsement is in a form acceptable to the Sponsor).  The Trust at the direction
of the Sponsor  shall  furnish any such legend not  contained in Exhibit A- 1 to
the Institutional Trustee in writing. Each Capital Security shall be dated on or
before  the  date  of  its  authentication.  The  terms  and  provisions  of the
Securities  set  forth  in  Annex I and the  forms of  Securities  set  forth in
Exhibits A-l and A-2 are part of the terms of this Declaration and to the extent
applicable,  the Institutional  Trustee,  the Administrators and the Sponsor, by
their execution and delivery of this Declaration,  expressly agree to such terms
and provisions and to be bound thereby.  Capital  Securities will be issued only
in blocks having a stated  liquidation  amount of not less than  $500,000.00 and
any multiple of $1,000.00 in excess thereof.

         The Capital Securities are being offered and sold by the Trust pursuant
to the Placement  Agreement in definitive,  registered  form without coupons and
with the Restricted Securities Legend.

         Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates.

         If:

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

         (b) there shall be delivered to the Registrar,  the  Administrators and
the Institutional  Trustee such security or indemnity as may be required by them
to keep each of them harmless;

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

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

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

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

         (a) The legal title to the Trust Property is vested  exclusively in the
Institutional  Trustee (in its capacity as such) 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

                                       24
<PAGE>

and they shall have no right to call for any  partition or division of property,
profits or rights of the Trust except as described  below.  The Securities shall
be personal  property giving only the rights  specifically set forth therein and
in this Declaration. The Securities shall have no preemptive or similar rights.

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

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

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

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

                           (B) any  accrued  Additional  Interest  on all of the
                  Debentures,

                           (C) the  principal of (and  premium,  if any, on) any
                  Debentures  that  have  become  due  otherwise  than  by  such
                  declaration  of  acceleration   and  interest  and  Additional
                  Interest thereon at the rate borne by the Debentures, and

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

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

         The Holders of at least a Majority in liquidation amount of the Capital
Securities  may, on behalf of the Holders of all the Capital  Securities,  waive
any past  default or Event of  Default,  except a default or Event of Default in
the payment of  principal  or interest  (unless such default or Event of Default
has been cured and a sum sufficient to pay all matured  installments of interest
and principal due otherwise  than by  acceleration  has been  deposited with the
Debenture  Trustee) or a default or Event of Default in respect of a covenant or
provision  that under the  Indenture  cannot be modified or amended  without the
consent of the holder of each  outstanding  Debenture.  No such rescission shall
affect any subsequent default or impair any right consequent thereon.

         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

                                       25
<PAGE>

unless such  declaration of  acceleration,  or rescission and annulment,  as the
case may be, shall have become  effective by virtue of the requisite  percentage
having  joined in such notice prior to the day that is 90 days after such record
date, such notice of declaration of  acceleration,  or rescission and annulment,
as the case may be, shall automatically and without further action by any Holder
be canceled and of no further effect.  Nothing in this paragraph shall prevent a
Holder,  or a proxy of a Holder,  from giving,  after  expiration of such 90-day
period, a new written notice of declaration of  acceleration,  or rescission and
annulment  thereof,  as the case may be, that is identical  to a written  notice
that has been  canceled  pursuant to the proviso to the preceding  sentence,  in
which event a new record date shall be established pursuant to the provisions of
this Section 6.7.

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

                                   ARTICLE VII

                      DISSOLUTION AND TERMINATION OF TRUST

         Section 7.1. Dissolution and Termination of Trust.

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

                           (i) unless earlier  dissolved,  on June 26, 2037, the
                  expiration of the term of the Trust;

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

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

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

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

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

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

                                       26
<PAGE>

                           (viii)  before the issuance of any  Securities,  with
                  the consent of the Institutional Trustee and the Sponsor.

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

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

                                  ARTICLE VIII

                              TRANSFER OF INTERESTS

         Section 8.1. General.

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

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

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

         (d) The Registrar shall provide for the  registration of Securities and
of transfers of Securities,  which will be effected without charge but only upon
payment (with such indemnity as the Registrar may require) in respect of any tax
or other  governmental  charges  that may be imposed  in  relation  to it.  Upon
surrender for  registration of transfer of any  Securities,  the Registrar shall
cause one or more new  Securities  of the same tenor to be issued in the name of
the  designated  transferee  or  transferees.  Every  Security  surrendered  for
registration  of  transfer  shall be  accompanied  by a  written  instrument  of
transfer in form  satisfactory  to the Registrar  duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Institutional Trustee pursuant
to Section 6.6. A transferee  of a Security  shall be entitled to the rights and
subject  to the  obligations  of a Holder  hereunder  upon the  receipt  by such
transferee of a Security. By acceptance of a Security,  each transferee shall be
deemed to have agreed to be bound by this Declaration.

         (e) The Trust shall not be required (i) to issue, register the transfer
of, or  exchange  any  Securities  during a period  beginning  at the opening of
business 15 days before the day of any  selection of Securities  for  redemption
and ending at the close of business on the earliest date on which the relevant

                                       27
<PAGE>

notice  of  redemption  is  deemed  to have  been  given to all  Holders  of the
Securities  to be redeemed,  or (ii) to register the transfer or exchange of any
Security so selected for  redemption in whole or in part,  except the unredeemed
portion of any Security being redeemed in part.

          Section 8.2. Transfer Procedures and Restrictions.

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

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

                  THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
         OF 1933, AS AMENDED (THE  "SECURITIES  ACT"), ANY STATE SECURITIES LAWS
         OR ANY OTHER  APPLICABLE  SECURITIES LAW. NEITHER THIS SECURITY NOR ANY
         INTEREST OR  PARTICIPATION  HEREIN MAY BE  REOFFERED,  SOLD,  ASSIGNED,
         TRANSFERRED,  PLEDGED,  ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN  THE
         ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM,
         OR NOT SUBJECT TO, THE REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT
         AND ANY APPLICABLE  STATE  SECURITIES LAWS. THE HOLDER OF THIS SECURITY
         BY ITS ACCEPTANCE  HEREOF AGREES TO OFFER,  SELL OR OTHERWISE  TRANSFER
         THIS SECURITY  ONLY (A) TO THE SPONSOR OR THE TRUST,  (B) PURSUANT TO A
         REGISTRATION  STATEMENT  THAT HAS BEEN  DECLARED  EFFECTIVE  UNDER  THE
         SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY  BELIEVES IS
         A  QUALIFIED   INSTITUTIONAL   BUYER  IN  A  TRANSACTION   MEETING  THE
         REQUIREMENTS  OF RULE 144A SO LONG AS THIS  SECURITY  IS  ELIGIBLE  FOR
         RESALE  PURSUANT TO RULE 144A IN  ACCORDANCE  WITH RULE 144A,  (D) TO A
         NON-U.S.  PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903
         OR RULE 904 (AS  APPLICABLE) OF REGULATION S UNDER THE SECURITIES  ACT,
         (E) TO AN  INSTITUTIONAL  "ACCREDITED  INVESTOR"  WITHIN THE MEANING OF
         SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
         THIS CAPITAL  SECURITY FOR ITS OWN ACCOUNT,  OR FOR THE ACCOUNT OF SUCH
         AN INSTITUTIONAL  ACCREDITED INVESTOR,  FOR INVESTMENT PURPOSES AND NOT
         WITH A  VIEW  TO,  OR  FOR  OFFER  OR  SALE  IN  CONNECTION  WITH,  ANY
         DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY
         OTHER  AVAILABLE  EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS OF THE
         SECURITIES ACT, SUBJECT TO THE SPONSOR'S AND THE TRUST'S RIGHT PRIOR TO
         ANY SUCH OFFER,  SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
         OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
         OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH

                                       28
<PAGE>

         MAY BE  OBTAINED  FROM THE SPONSOR OR THE TRUST.  HEDGING  TRANSACTIONS
         INVOLVING THIS SECURITY MAY NOT BE CONDUCTED  UNLESS IN COMPLIANCE WITH
         THE SECURITIES ACT.

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

                  THIS  SECURITY WILL BE ISSUED AND MAY BE  TRANSFERRED  ONLY IN
         BLOCKS HAVING A LIQUIDATION  AMOUNT OF NOT LESS THAN  $500,000.00  (500
         SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED
         TRANSFER OF SECURITIES  IN A BLOCK HAVING A LIQUIDATION  AMOUNT OF LESS
         THAN  $500,000.00  SHALL BE  DEEMED  TO BE VOID AND OF NO LEGAL  EFFECT
         WHATSOEVER.

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

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

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

         (e) All Capital  Securities issued upon any registration of transfer or
exchange  pursuant  to the terms of this  Declaration  shall  evidence  the same
security and shall be entitled to the same benefits

                                       29
<PAGE>

under  this  Declaration  as  the  Capital  Securities   surrendered  upon  such
registration of transfer or exchange.

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

                                   ARTICLE IX

                           LIMITATION OF LIABILITY OF
             HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS

         Section 9.1. Liability.

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

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

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

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

         (c)  Pursuant to the  Statutory  Trust Act,  the Holders of the Capital
Securities  shall be  entitled  to the same  limitation  of  personal  liability
extended to stockholders of private  corporations for profit organized under the
General Corporation Law of the State of Connecticut.

         Section 9.2. Exculpation.

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

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

                                       30
<PAGE>

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, are agreed by the
parties hereto to replace such other duties and  liabilities of the  Indemnified
Person.

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

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

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

         Section 9.4. Indemnification.

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

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

                                       31
<PAGE>

that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.

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

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

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

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

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

                                       32
<PAGE>

Section 9.4 is in effect.  Any repeal or  modification of this Section 9.4 shall
not affect any rights or obligations then existing.

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

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

         (j) The  indemnification  and  advancement of expenses  provided by, or
granted  pursuant to, this Section 9.4 shall,  unless  otherwise  provided  when
authorized  or  ratified,  (i)  continue  as to a Person who has ceased to be an
Indemnified  Person and shall inure to the benefit of the heirs,  executors  and
administrators of such a Person;  and (ii) survive the termination or expiration
of this  Declaration  or the earlier  removal or  resignation  of an Indemnified
Person.

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

         Section 9.6. Compensation; Fee. The Sponsor agrees:

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

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

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

                                       33
<PAGE>

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

                                    ARTICLE X

                                   ACCOUNTING

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

         Section 10.2. Certain Accounting Matters.

         (a) At all times during the existence of the Trust, the  Administrators
shall  keep,  or cause to be kept at the  principal  office  of the Trust in the
United  States,  as  defined  for  purposes  of  Treasury   Regulations  section
301.7701-7, full books of account, records and supporting documents, which shall
reflect in reasonable detail each transaction of the Trust. The books of account
shall be  maintained,  at the Sponsor's  expense,  in accordance  with generally
accepted accounting  principles,  consistently applied. The books of account and
the  records  of the  Trust  shall be  examined  by and  reported  upon  (either
separately or as part of the Sponsor's regularly prepared consolidated financial
report) as of the end of each Fiscal Year of the Trust by a firm of  independent
certified public accountants selected by the Administrators.

         (b) The Administrators shall cause to be duly prepared and delivered to
each of the Holders of  Securities  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.

         (c) The  Administrators,  at the Sponsor's  expense,  shall cause to be
duly  prepared at the  principal  office of the Trust 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.

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

         Section  10.4.  Withholding.  The  Institutional  Trustee or any Paying
Agent and the  Administrators  shall  comply with all  withholding  requirements
under United States federal,  state and local law. The Institutional  Trustee or
any  Paying  Agent  shall  request,   and  each  Holder  shall  provide  to  the
Institutional  Trustee or any Paying Agent,  such forms or  certificates  as are
necessary to establish an exemption from withholding with respect to the Holder,
and any  representations  and  forms as shall  reasonably  be  requested  by the
Institutional Trustee or any Paying Agent to assist it in determining the extent
of; and in fulfilling,  its withholding  obligations.  The Administrators  shall
file required forms with applicable  jurisdictions and, unless an exemption from
withholding is properly  established by a Holder,  shall remit amounts  withheld
with respect to the Holder to applicable  jurisdictions.  To the extent that the
Institutional  Trustee or any Paying  Agent is required to withhold and pay over
any amounts to any

                                       34
<PAGE>

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

                                   ARTICLE XI

                             AMENDMENTS AND MEETINGS

         Section 11.1. Amendments.

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

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

                  (i) the Institutional Trustee shall have first received

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

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

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

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

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

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

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

         (e)  Section  8.1 (b) and  8.1(c)  and this  Section  11.1 shall not be
amended without the consent of all of the Holders of the Securities.

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

                                       35
<PAGE>

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

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

                  (i) cure any ambiguity;

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

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

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

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

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

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

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

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

                                       36
<PAGE>

         in liquidation amount that would be necessary to authorize or take such
         action at a meeting  at which all  Holders of the  Securities  having a
         right to vote  thereon were  present and voting.  Prompt  notice of the
         taking of action without a meeting shall be given to the Holders of the
         Securities  entitled to vote who have not  consented  in  writing.  The
         Administrators  may specify  that any written  ballot  submitted to the
         Holders of the  Securities for the purpose of taking any action without
         a meeting  shall be returned to the Trust within the time  specified by
         the Administrators;

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

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

                                   ARTICLE XII

                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE

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

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

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

                                       37
<PAGE>

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

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

                                  ARTICLE XIII

                                  MISCELLANEOUS

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

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

                  North Bay Statutory Trust I
                  c/o North Bay Bancorp
                  c/o The Vintage Bank
                  1500 Soscol Avenue Napa,
                  California 94559
                  Attention: Terry L. Robinson
                  Telecopy: 707-259-2376

         (b)  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):

                  State Street Bank and Trust Company of Connecticut,
                    National Association
                  225 Asylum Street, Goodwin Square
                  Hartford, Connecticut 06103
                  Attention: Vice President, Corporate Trust Department
                  Telecopy: 860-244-1889

                  With a copy to:

                  State Street Bank and Trust Company
                  P.O. Box 778
                  Boston, Massachusetts 02102-0778
                  Attention: Paul D. Allen, Corporate Trust Department
                  Telecopy: 617-662-1462

         (c) 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):

                  North Bay Bancorp
                  c/o The Vintage Bank
                  1500 Soscol Avenue
                  Napa, California 94559

                                       38
<PAGE>

                  Attention:  Terry L. Robinson
                  Telecopy:   707-259-2376

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

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

         Section 13.2.  Governing  Law. This  Declaration  and the rights of the
parties  hereunder  shall be governed by and  interpreted in accordance with the
law of the State of Connecticut and all rights and remedies shall be governed by
such laws without  regard to the  principles of conflict of laws of the State of
Connecticut or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Connecticut;  provided, however,
that there shall not be applicable to the Trust,  the  Institutional  Trustee or
this Declaration any provision of the laws (statutory or common) of the State of
Connecticut  pertaining  to  trusts  that  relate  to or  regulate,  in a manner
inconsistent with the terms hereof (a) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges, (b)
affirmative  requirements  to post  bonds  for  trustees,  officers,  agents  or
employees  of  a  trust,   (c)  the  necessity  for  obtaining  court  or  other
governmental approval concerning the acquisition, holding or disposition of real
or personal  property,  (d) fees or other sums  payable to  trustees,  officers,
agents or employees of a trust,  (e) the allocation of receipts and expenditures
to income or principal,  or (f)  restrictions  or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets.

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

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

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

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

         Section 13.7. Counterparts.  This Declaration may contain more than one
counterpart  of the signature page and this  Declaration  may be executed by the
affixing  of  the   signature   of  each  of  the   Institutional   Trustee  and
Administrators  to  any  of  such  counterpart  signature  pages.  All  of  such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.

                     Signatures appear on the following page

                                       39
<PAGE>

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

                                       STATE STREET BANK AND TRUST COMPANY OF
                                       CONNECTICUT, NATIONAL ASSOCIATION,
                                       as Institutional Trustee

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

                                       NORTH BAY BANCORP, as Sponsor

                                       By:  /s/  Terry L. Robinson
                                          --------------------------------------
                                                Name:     Terry L. Robinson
                                                Title:    President & CEO

                                       NORTH BAY STATUTORY TRUST I

                                      By:   /s/  Terry L. Robinson
                                          --------------------------------------
                                            Administrator

                                      By:  /s/ ??????????????
                                          --------------------------------------
                                            Administrator

                                      By:  /s/ ??????????????
                                          --------------------------------------
                                            Administrator

                                       40
<PAGE>

                                     ANNEX I

                               TERMS OF SECURITIES

         Pursuant  to Section 6.1 of the Amended  and  Restated  Declaration  of
Trust,  dated  as  of  June  26,  2002  (as  amended  from  time  to  time,  the
"Declaration"), the designation, rights, privileges,  restrictions,  preferences
and  other  terms  and  provisions  of the  Capital  Securities  and the  Common
Securities are set out below (each  capitalized term used but not defined herein
has the meaning set forth in the Declaration):

         1. Designation and Number.

         (a) 10,000  Floating  Rate Capital  Securities  of North Bay  Statutory
Trust I (the "Trust"),  with an aggregate stated liquidation amount with respect
to the assets of the Trust of ten million dollars  ($10,000,000.00) and a stated
liquidation  amount  with  respect to the assets of the Trust of  $1,000.00  per
Capital Security,  are hereby designated for the purposes of identification only
as the "Capital Securities".  The Capital Security  Certificates  evidencing the
Capital  Securities  shall be  substantially  in the form of Exhibit  A-l to the
Declaration,  with such changes and additions thereto or deletions  therefrom as
may be required by ordinary usage, custom or practice.

         (b) 310  Floating  Rate  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.

         2. Distributions.

         (a)  Distributions  will be  payable  on each  Security  for the period
beginning on (and  including)  the date of original  issuance and ending on (but
excluding)  September  26,  2002 at a rate per annum of  5.3369%  and shall bear
interest for each successive  period beginning on (and including)  September 26,
2002,  and  each  succeeding  Distribution  Payment  Date,  and  ending  on (but
excluding) the next succeeding  Distribution Payment Date (each, a "Distribution
Period") at a rate per annum equal to the 3-Month LIBOR, determined as described
below, plus 3.45% (the "Coupon Rate"); provided, however, that prior to June 26,
2007, the Coupon Rate shall not exceed 11.95%, applied to the stated liquidation
amount thereof,  such rate being the rate of interest  payable on the Debentures
to be held by the Institutional Trustee.  Distributions in arrears for more than
one quarterly  period will bear  interest  thereon  compounded  quarterly at the
applicable Distribution Rate (to the extent permitted by law). A Distribution is
payable only to the extent that  payments are made in respect of the  Debentures
held by the Institutional  Trustee and to the extent the  Institutional  Trustee
has funds available therefor. In the event that any date on which a Distribution
is payable on the  Securities  is not a Business  Day,  then payment of interest
payable  on such  date  shall  be made on the  next  succeeding  day  which is a
Business Day (and  without any interest or other  payment in respect of any such
delay),  except that,  if such Business Day is in the next  succeeding  calendar
year, such payment shall be made on the immediately  preceding  Business Day, in
each case with the same force and effect as if made on the date such payment was
originally  payable.  The amount of interest payable for any Distribution Period
will  be  calculated  by  applying  the  Coupon  Rate  to the  principal  amount
outstanding at the commencement of the Distribution  Period and multiplying each
such amount by the actual number of days in the  Distribution  Period  concerned
divided by 360. All percentages  resulting from any  calculations on the Capital
Securities will be rounded, if necessary,  to the nearest one hundred-thousandth
of a percentage  point,  with five  one-millionths of a percentage point rounded
upward (e.g.,  9.876545% or .09876545 being rounded to 9.87655% or .0987655, and
all dollar

                                      I-1

<PAGE>

amounts  used in or  resulting  from such  calculation  will be  rounded  to the
nearest cent (with one-half cent being rounded upward)).

         (b)  Distributions  on the Securities  will be cumulative,  will accrue
from the date of original issuance, and will be payable, subject to extension of
distribution payment periods as described herein,  quarterly in arrears on March
26, June 26, September 26 and December 26 of each year,  commencing on September
26, 2002 (each a  "Distribution  Payment  Date") when,  as and if available  for
payment.  The  Debenture  Issuer  has the  right  under the  Indenture  to defer
payments of interest on the Debentures, so long as no Indenture Event of Default
has occurred  and is  continuing,  by  deferring  the payment of interest on the
Debentures  for up to 20  consecutive  quarterly  periods  (each  an  "Extension
Period") at any time and from time to time, subject to the conditions  described
below,  although such interest would continue to accrue on the Debentures at the
Distribution  Rate compounded  quarterly (to the extent permitted by law) during
any  Extension  Period.  No  Extension  Period  may end on a date  other  than a
Distribution Payment Date. At the end of any such Extension Period the Debenture
Issuer  shall  pay all  interest  then  accrued  and  unpaid  on the  Debentures
(together  with  Additional  Interest  thereon);   provided,  however,  that  no
Extension  Period may extend  beyond the Maturity  Date  and  provided  further,
however,  during  any  such  Extension  Period,  the  Debenture  Issuer  and its
Affiliates  shall 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 or its Affiliates'  capital stock (other than payments of
dividends  or  distributions  to the  Debenture  Issuer)  or make any  guarantee
payments with respect to the foregoing, or (ii) make any payment of principal of
or  interest  or premium,  if any,  on or repay,  repurchase  or redeem any debt
securities of the Debenture  Issuer or any Affiliate that rank pari passu in all
respects with or junior in interest to the Debentures  (other than, with respect
to  clauses  (i)  and  (ii)  above,  (a)   repurchases,   redemptions  or  other
acquisitions  of shares of capital stock of the  Debenture  Issuer in connection
with any employment contract,  benefit plan or other similar arrangement with or
for the benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or 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  stockholders'  rights plan, or the issuance of
rights,  stock or other  property  under any  stockholders'  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 to such  stock and any cash  payments  in lieu of  fractional  shares
issued in connection  therewith,  or (f) payments  under the Capital  Securities
Guarantee).  Prior to the  termination  of any Extension  Period,  the Debenture
Issuer may further extend such period,  provided that such period  together with
all such previous and further consecutive extensions thereof shall not exceed 20
consecutive  quarterly  periods,  or extend beyond the Maturity  Date.  Upon the
termination  of any  Extension  Period and upon the  payment of all  accrued and
unpaid interest and Additional Interest, the Debenture Issuer may commence a new
Extension  Period,  subject  to  the  foregoing  requirements.  No  interest  or
Additional Interest shall be due and payable during an Extension Period,  except
at the end thereof,  but each  installment of interest that would otherwise have
been  due and  payable  during  such  Extension  Period  shall  bear  Additional
Interest. If Distributions are deferred,  the Distributions due shall be paid on
the date  that the  related  Extension  Period  terminates,  to  Holders  of the
Securities  as they  appear on the books and  records of the Trust on the record
date  immediately  preceding such date.  Distributions on the Securities must be
paid on the dates

                                       I-2
<PAGE>

payable  (after giving  effect to any  Extension  Period) to the extent that the
Trust has funds available for the payment of such  distributions in the Property
Account of the Trust.  The  Trust's  funds  available  for  Distribution  to the
Holders  of the  Securities  will be  limited  to  payments  received  from  the
Debenture  Issuer.  The payment of Distributions out of moneys held by the Trust
is guaranteed by the Guarantor pursuant to the Guarantee.

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

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

         3.  Liquidation  Distribution  Upon  Dissolution.  In the  event of the
voluntary or involuntary liquidation,  dissolution, winding-up or termination of
the Trust (each a  "Liquidation")  other than in connection with a redemption of
the Debentures, the Holders of the Securities will be entitled to receive out of
the assets of the Trust available for distribution to Holders of the Securities,
after  satisfaction  of liabilities to creditors of the Trust (to the extent not
satisfied by the Debenture Issuer), distributions equal to the lesser of (i) the
aggregate  of the stated  liquidation  amount of  $1,000.00  per  Security  plus
accrued and unpaid  Distributions  thereon to the date of payment, to the extent
the Trust shall have funds available therefor,  and (ii) the amount of assets of
the Trust remaining  available for distribution to Holders in liquidation of the
Trust (such amount  being,  in either  case,  the  "Liquidation  Distribution"),
unless in connection with such  Liquidation,  the Debentures in aggregate stated
principal  amount  equal to the  aggregate  stated  liquidation  amount  of such
Securities, with an interest rate equal to the Distribution Rate of, and bearing
accrued  and  unpaid  interest  in an amount  equal to the  accrued  and  unpaid
Distributions  on, and having the same record date as,  such  Securities,  after
paying or making  reasonable  provision to pay all claims and obligations of the
Trust in accordance  with the Statutory Trust Act, shall be distributed on a Pro
Rata basis to the Holders of the Securities in exchange for such Securities.

         The  Sponsor,  as the Holder of all of the Common  Securities,  has the
right at any time to dissolve the Trust (including, without limitation, upon the
occurrence of a Special Event),  subject to the receipt by the Debenture  Issuer
of prior approval from the Board of Governors of the Federal  Reserve System and
any successor  federal agency that is primarily  responsible  for regulating the
activities  of the Sponsor  (the  "Federal  Reserve"),  if the Sponsor is a bank
holding  company,  or from the Office of Thrift  Supervision  and any  successor
federal  agency that is primarily  responsible  for regulating the activities of
Sponsor,  (the "OTS") if the Sponsor is a savings and loan holding  company,  in
either case if then required under applicable  capital guidelines or policies of
the  Federal  Reserve  or  OTS,  as  applicable,   and,  after  satisfaction  of
liabilities to creditors of the Trust, cause the Debentures to be distributed to
the  Holders  of the  Securities  on a Pro  Rata  basis in  accordance  with the
aggregate stated liquidation amount thereof.

                                       I-3
<PAGE>

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

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

         After the date for any  distribution of the Debentures upon dissolution
of the Trust  (i) the  Securities  of the  Trust  will be deemed to be no longer
outstanding,  (ii) upon  surrender of a Holder's  Securities  certificate,  such
Holder of the Securities will receive a certificate  representing the Debentures
to be delivered upon such distribution,  and (iii) any certificates representing
the  Securities  still  outstanding  will  be  deemed  to  represent   undivided
beneficial  interests in such of the  Debentures as have an aggregate  principal
amount equal to the aggregate  stated  liquidation  amount with an interest rate
identical to the  Distribution  Rate of, and bearing accrued and unpaid interest
equal to  accrued  and  unpaid  distributions  on,  the  Securities  until  such
certificates  are presented to the Debenture Issuer or its agent for transfer or
reissuance  (and until such  certificates  are so  surrendered,  no  payments of
interest or principal  shall be made to Holders of  Securities in respect of any
payments  due and payable  under the  Debentures;  provided,  however  that such
failure  to pay  shall not be  deemed  to be an Event of  Default  and shall not
entitle  the Holder to the  benefits of the  Guarantee),  and (iv) all rights of
Holders of Securities  under the  Declaration  shall cease,  except the right of
such Holders to receive  Debentures upon surrender of certificates  representing
such Securities.

         4. Redemption and Distribution.

                  (a)  The  Debentures   will  mature  on  June  26,  2032.  The
Debentures may be redeemed by the Debenture  Issuer,  in whole or in part at any
time and from time to time on or after June 26, 2007, at the  Redemption  Price.
In  addition,  the  Debentures  may be redeemed by the  Debenture  Issuer at the
Special Redemption Price, in whole but not in part, at any Distribution  Payment
Date,  upon the occurrence and  continuation  of a Special Event within 120 days
following the occurrence of such Special Event at the Special  Redemption Price,
upon  not  less  than 30 nor  more  than 60  days'  notice  to  holders  of such
Debentures so long as such Special Event is continuing.  In each case, the right
of the  Debenture  Issuer to redeem the  Debentures  is subject to the Debenture
Issuer having received prior approval from the Federal Reserve (if the Debenture
Issuer  is a bank  holding  company)  or  prior  approval  from  the OTS (if the
Debenture  Issuer is a savings and loan holding  company),  in each case if then
required  under  applicable  capital  guidelines  or policies of the  applicable
federal agency.

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

                  (1) the rate  (expressed  as a percentage  per annum) for U.S.
         dollar deposits having a three-month  maturity that appears on Telerate
         Page 3750 as of 11:00 a.m. (London time) on the

                                       I-4
<PAGE>

         related  Determination  Date (as defined  below).  "Telerate Page 3750"
         means the display  designated as "Page 3750" on the Dow Jones  Telerate
         Service or such other page as may replace  Page 3750 on that service or
         such other  service or  services  as may be  nominated  by the  British
         Bankers'  Association  as the  information  vendor  for the  purpose of
         displaying London interbank offered rates for U.S. dollar deposits;

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

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

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

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

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

         "Capital Treatment Event" means the receipt by the Debenture Issuer and
the Trust of an  opinion of counsel  experienced  in such  matters to the effect
that, as a result of the  occurrence  of any amendment to, or change  (including
any announced  prospective  change) in, the laws,  rules or  regulations  of the
United States or any political  subdivision thereof or therein, or as the result
of  any  official  or   administrative   pronouncement  or  action  or  decision
interpreting  or applying such laws,  rules or  regulations,  which amendment or
change is effective or which  pronouncement,  action or decision is announced on
or after the date of original issuance of the Debentures,  there is more than an
insubstantial risk that the Sponsor will not, within 90 days of the date of such
opinion,  be  entitled  to treat an amount  equal to the  aggregate  liquidation
amount  of the  Debentures  as "Tier 1  Capital"  (or its then  equivalent)  for
purposes of the capital adequacy  guidelines of the Federal Reserve,  as then in
effect and  applicable  to the Sponsor (or if the Sponsor is not a bank  holding
company,  such guidelines  applied to the Sponsor as if the Sponsor were subject
to such  guidelines);  provided,  however,  that the inability of the Sponsor to
treat all or any portion of the  liquidation  amount of the Debentures as Tier 1
Capital shall not constitute the basis for a Capital  Treatment  Event,  if such
inability results from the Sponsor having cumulative  preferred stock,  minority
interests  in  consolidated  subsidiaries,  or any other  class of  security  or
interest which the Federal  Reserve or OTS, as applicable,  may now or hereafter
accord  Tier 1  Capital  treatment  in  excess  of the  amount  which may now or
hereafter  qualify for  treatment  as Tier 1 Capital  under  applicable  capital
adequacy  guidelines;  provided  further,  however,  that  the  distribution  of
Debentures in connection  with the  Liquidation of the Trust shall not in and of
itself  constitute a Capital  Treatment Event unless such Liquidation shall have
occurred in connection with a Tax Event or an Investment Company Event.

                                       I-5
<PAGE>

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

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

         "Maturity Date" means June 26, 2032.

         "Redemption  Date"  shall  mean the date  fixed for the  redemption  of
Capital  Securities,  which shall be March 26, June 26, September 26 or December
26 commencing June 26, 2007.

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

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

         "Special  Redemption  Date"  means a date  on  which  a  Special  Event
redemption  occurs,  which shall be March 26, June 26,  September 26 or December
26.

         "Special  Redemption Price" means (i) 107.5% of the principal amount of
the Debentures  being redeemed on a Special  Redemption  Date that occurs before
June 26,  2007 and (ii) 100% of the  principal  amount of the  Debentures  being
redeemed  on a Special  Redemption  Date that  occurs on June 26, 2007 or after,
plus,  in each case,  accrued  and unpaid  interest  on such  Debentures  to the
Special Redemption Date.

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

                  (b) Upon the  repayment in full at maturity or  redemption  in
whole or in part of the Debentures (other than following the distribution of the
Debentures to the Holders of the Securities), the

                                       I-6
<PAGE>

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

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

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

                  (e) Redemption or Distribution Procedures.

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

                           (ii) If the  Securities  are to be  redeemed  and the
         Trust gives a Redemption! Distribution Notice, which notice may only be
         issued if the  Debentures  are redeemed as set out in this  paragraph 4
         (which   notice  will  be   irrevocable),   then,   provided  that  the
         Institutional  Trustee has a  sufficient  amount of cash in  connection
         with  the  related  redemption  or  maturity  of  the  Debentures,  the
         Institutional Trustee will pay the relevant Redemption Price or Special
         Redemption  Price, as applicable,  to the Holders of such Securities by
         check mailed to the address of each such Holder  appearing on the books
         and   records   of  the   Trust   on   the   Redemption   Date.   If  a
         Redemption/Distribution   Notice   shall  have  been  given  and  funds
         deposited as required then  immediately  prior to the close of business
         on the date of such deposit  Distributions  will cease to accrue on the
         Securities so called for  redemption  and all rights of Holders of such
         Securities so called for redemption will cease, except the right of the
         Holders of such Securities to receive the applicable  Redemption  Price
         or Special  Redemption  Price  specified in paragraph 4(a), but without
         interest on such Redemption Price or Special  Redemption  Price. If any
         date fixed for  redemption  of  Securities  is not a Business Day, then
         payment  of any such  Redemption  Price  or  Special  Redemption  Price
         payable on such date will be made on the next  succeeding day that is a
         Business Day (and  without any interest or other  payment in respect of
         any such delay)  except  that,  if such  Business Day falls in the next
         calendar year, such payment will be made on the  immediately  preceding
         Business Day, in each case with the same force and effect as if made on
         such date fixed for redemption.  If payment of the Redemption  Price or
         Special  Redemption  Price in respect of any  Securities  is improperly
         withheld  or  refused  and  not  paid  either  by the  Trust  or by the
         Debenture Issuer as guarantor pursuant to the Guarantee,  Distributions
         on such Securities

                                       I-7
<PAGE>

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

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

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

         5. Voting Rights - Capital Securities.

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

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

                                       I-8
<PAGE>

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

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

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

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

         In no event will  Holders of the Capital  Securities  have the right to
vote to appoint,  remove or replace the Administrators,  which voting rights are
vested  exclusively in the Sponsor as the Holder of all of the Common Securities
of the Trust. Under certain circumstances as more fully described in the

                                       I-9
<PAGE>

Declaration, Holders of Capital Securities have the right to vote to appoint,
remove or replace the Institutional Trustee.

         6. Voting Rights - Common Securities.

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

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

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

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

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

                                      I-10
<PAGE>

         7. Amendments to Declaration and Indenture.

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

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

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

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

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

         9. Ranking.  The Capital  Securities  rank  pari passu with and payment
thereon shall be made Pro Rata with the Common  Securities except that, where an
Event of Default has occurred and is

                                      I-11

<PAGE>

continuing, the rights of Holders of the Common Securities to receive payment of
Distributions  and payments  upon  liquidation,  redemption  and  otherwise  are
subordinated  to the rights of the  Holders of the Capital  Securities  with the
result that no payment of any  Distribution  on, or Redemption Price (or Special
Redemption  Price) of, any Common  Security,  and no other payment on account of
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all  accumulated and unpaid  Distributions  on
all outstanding  Capital Securities for all distribution  periods terminating on
or prior thereto,  or in the case of payment of the Redemption Price (or Special
Redemption  Price)  the  full  amount  of  such  Redemption  Price  (or  Special
Redemption  Price)  on  all  outstanding  Capital  Securities  then  called  for
redemption,  shall have been made or  provided  for,  and all funds  immediately
available to the Institutional  Trustee shall first be applied to the payment in
full in cash of all  Distributions  on,  or the  Redemption  Price  (or  Special
Redemption Price) of; the Capital Securities then due and payable.

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

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

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

                                      I-12
<PAGE>

                                   EXHIBIT A-I

                      FORM OF CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS  AMENDED  (THE  "SECURITIES  ACT"),  ANY STATE  SECURITIES  LAWS OR ANY OTHER
APPLICABLE   SECURITIES   LAW.   NEITHER  THIS  SECURITY  NOR  ANY  INTEREST  OR
PARTICIPATION  HEREIN MAY BE REOFFERED,  SOLD, ASSIGNED,  TRANSFERRED,  PLEDGED,
ENCUMBERED  OR  OTHERWISE  DISPOSED  OF IN THE ABSENCE OF SUCH  REGISTRATION  OR
UNLESS SUCH  TRANSACTION  IS EXEMPT  FROM,  OR NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS  SECURITY  BY ITS  ACCEPTANCE  HEREOF  AGREES  TO OFFER,  SELL OR
OTHERWISE  TRANSFER  THIS  SECURITY  ONLY (A) TO THE  SPONSOR OR THE TRUST,  (B)
PURSUANT TO A REGISTRATION  STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES  ACT,  (C) TO A  PERSON  WHOM THE  SELLER  REASONABLY  BELIEVES  IS A
QUALIFIED  INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A SO LONG AS THIS  SECURITY IS ELIGIBLE  FOR RESALE  PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S.  PERSON IN AN OFFSHORE  TRANSACTION
IN ACCORDANCE  WITH RULE 903 OR RULE 904 (AS  APPLICABLE)  OF REGULATIONS  UNDER
THE SECURITIES ACT, (E) TO AN  INSTITUTIONAL  "ACCREDITED  INVESTOR"  WITHIN THE
MEANING  OF  SUBPARAGRAPH  (A) OF RULE  501  UNDER  THE  SECURITIES  ACT THAT IS
ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT,  OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL  ACCREDITED INVESTOR,  FOR INVESTMENT PURPOSES AND  NOT  WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION  WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION  REQUIREMENTS OF THE SECURITIES  ACT,  SUBJECT TO THE SPONSOR'S AND
THE  TRUST'S  RIGHT  PRIOR TO ANY SUCH  OFFER,  SALE OR  TRANSFER TO REQUIRE THE
DELIVERY  OF AN OPINION  OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER  INFORMATION
SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY
OF WHICH MAY BE  OBTAINED  FROM THE SPONSOR OR THE TRUST.  HEDGING  TRANSACTIONS
INVOLVING  THIS  SECURITY MAY NOT BE  CONDUCTED  UNLESS IN  COMPLIANCE  WITH THE
SECURITIES  ACT.

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

                                     A-1-1
<PAGE>

MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE,  A TRUSTEE OR OTHER PERSON  ACTING ON BEHALF OF AN EMPLOYEE  BENEFIT
PLAN OR PLAN,  OR ANY OTHER  PERSON OR ENTITY  USING THE ASSETS OF ANY  EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH  PURCHASE,  OR (ii) SUCH  PURCHASE WILL NOT
RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

          THIS  SECURITY  WILL BE ISSUED AND MAY BE  TRANSFERRED  ONLY IN BLOCKS
HAVING A LIQUIDATION  AMOUNT OF NOT LESS THAN  $500,000.00  (500 SECURITIES) AND
MULTIPLES OF $1,000.00 IN EXCESS THEREOF.  ANY ATTEMPTED  TRANSFER OF SECURITIES
IN A BLOCK HAVING A LIQUIDATION  AMOUNT OF LESS THAN $500,000.00 SHALL BE DEEMED
TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

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

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

      Certificate Number P-l                      10,000 Capital Securities

                                  June 26, 2002

             Certificate Evidencing Floating Rate Capital Securities

                                       of

                           North Bay Statutory Trust I

               (liquidation amount $1,000.00 per Capital Security)

         North Bay Statutory  Trust I, a statutory  trust created under the laws
of the State of Connecticut (the "Trust"), hereby certifies that Hare & Co. (the
"Holder"),  as the nominee of The Bank of New York,  indenture trustee under the
Indenture  dated as of June 26, 2002 among  Preferred Term  Securities VI, Ltd.,
Preferred  Term  Securities  VI, Inc. and The Bank of New York is the registered
owner of securities of the Trust representing  undivided beneficial interests in
the assets of the Trust,  (liquidation  amount  $1,000.00 per capital  security)
(the "Capital  Securities").  Subject to the Declaration (as defined below), the
Capital  Securities  are  transferable  on the books and records of the Trust in
person or by a duly authorized attorney, upon surrender of this Certificate duly
endorsed and in proper form for transfer. The designation,  rights,  privileges,
restrictions,  preferences  and  other  terms  and  provisions  of  the  Capital
Securities  represented hereby are issued pursuant to, and shall in all respects
be subject to, the  provisions of the Amended and Restated  Declaration of Trust
of the Trust dated as of June 26, 2002, among Terry L. Robinson,  Dale Brain and
Lee-Ann  Cimino  as  Administrators,  State  Street  Bank and Trust  Company  of
Connecticut,  National Association, as Institutional Trustee, North Bay Bancorp,
as Sponsor,  and the holders from time to time of undivided beneficial interests
in the  assets  of the  Trust,  including  the  designation  of the terms of the
Capital  Securities  as set  forth  in  Annex I to  such  amended  and  restated
declaration  as the same may be amended  from time to time (the  "Declaration").
Capitalized  terms used herein but not defined shall have the meaning given them
in the  Declaration.  The Holder is entitled to the benefits of the Guarantee to
the extent provided therein. The Sponsor will provide a copy of the Declaration,
the  Guarantee,  and the  Indenture  to the Holder  without  charge upon written
request to the Trust at its principal  place of business.

                                      A-l-2
<PAGE>

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

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

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

                       Signatures appear on following page

                                      A-l-3
<PAGE>

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

                                    NORTH BAY STATUTORY TRUST I

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

                           CERTIFICATE OF AUTHENTICATION

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

                                    STATE STREET BANK AND TRUST COMPANY OF
                                    CONNECTICUT, NATIONAL ASSOCIATION,
                                    as the Institutional Trustee

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

                                      A-1-4
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions  payable on each Capital  Security  will be payable at an
annual rate equal to 5.3369%  beginning on (and  including) the date of original
issuance and ending on (but excluding)  September 26, 2002 and at an annual rate
for each successive period beginning on (and including)  September 26, 2002, and
each  succeeding  Distribution  Payment Date, and ending on (but  excluding) the
next succeeding Distribution Payment Date (each a "Distribution Period"),  equal
to 3-Month LIBOR, determined as described below, plus 3.45% (the "Coupon Rate");
provided, however, that prior to June 26, 2007, the Coupon Rate shall not exceed
11.95%,  applied to the  stated  liquidation  amount of  $1,000.00  per  Capital
Security,  such rate being the rate of interest  payable on the Debentures to be
held by the  Institutional  Trustee.  Distributions  in arrears  for more than a
quarterly  period  will  bear  interest  thereon  compounded  quarterly  at  the
Distribution  Rate  (to the  extent  permitted  by  applicable  law).  The  term
"Distributions"  as used herein includes  payments of Interest and any principal
on the Debentures held by the  Institutional  Trustee unless otherwise stated. A
Distribution  is payable only to the extent that payments are made in respect of
the  Debentures  held  by  the  Institutional  Trustee  and to  the  extent  the
Institutional   Trustee  has  funds   available   therefor.   As  used   herein,
"Determination  Date" means the date that is two London  Banking  Days (i.e.,  a
business day in which dealings in deposits in U.S. dollars are transacted in the
London interbank market) preceding the commencement of the relevant Distribution
Period.  In the event that any date on which a  Distribution  is payable on this
Capital  Security  is not a Business  Day,  then a payment  of the  Distribution
payable on such date will be made on the next succeeding day which is a Business
Day (and  without  any  Distribution  or other  payment  in  respect of any such
delay),  except that,  if such Business Day is in the next  succeeding  calendar
year, such payment shall be made on the immediately  preceding  Business Day, in
each case with the same force and effect as if made on the date the  payment was
originally  payable.  The amount of interest payable for any Distribution Period
will  be  calculated  by  applying  the  Coupon  Rate  to the  principal  amount
outstanding at the commencement of the Distribution  Period and multiplying each
such amount by the actual number of days in the  Distribution  Period  concerned
divided by 360.

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

                                      A-l-5
<PAGE>

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

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

         Except as  otherwise  described  below,  Distributions  on the  Capital
Securities  will be cumulative,  will accrue from the date of original  issuance
and will be payable  quarterly in arrears on March 26, June 26, September 26 and
December 26 of each year, commencing on September 26, 2002. 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 an "Extension Period") on the Debentures, subject to the
conditions  described  below, although such interest would continue to accrue on
the  Debentures  at an annual  rate equal to the  Distribution  Rate  compounded
quarterly  to the  extent  permitted  by law  during any  Extension  Period.  No
Extension  Period may end on a date other than a  Distribution  Payment Date. At
the end of any such Extension Period the Debenture Issuer shall pay all interest
then accrued and unpaid on the  Debentures  (together with  Additional  Interest
thereon);  provided,  however,  that no Extension  Period may extend  beyond the
Maturity Date. Prior to the termination of any Extension  Period,  the Debenture
Issuer may further extend such period,  provided that such period  together with
all such previous and further consecutive extensions thereof shall not exceed 20
consecutive  quarterly  periods,  or extend beyond the Maturity  Date.  Upon the
termination  of any  Extension  Period and upon the  payment of all  accrued and
unpaid interest and Additional Interest, the Debenture Issuer may commence a new
Extension  Period,  subject  to  the  foregoing  requirements.  No  interest  or
Additional Interest shall be due and payable during an Extension Period,  except
at the end thereof,  but each  installment of interest that would otherwise have
been  due and  payable  during  such  Extension  Period  shall  bear  Additional
Interest. If Distributions are deferred,  the Distributions due shall be paid on
the date  that the  related  Extension  Period  terminates,  to  Holders  of the
Securities  as they  appear on the books and  records of the Trust on the record
date  immediately  preceding such date.  Distributions on the Securities must be
paid on the dates payable  (after giving effect to any Extension  Period) to the
extent that the Trust has funds available for the payment of such  distributions
in  the  Property  Account  of  the  Trust.  The  Trust's  funds  available  for
Distribution  to the  Holders of the  Securities  will be  limited  to  payments
received from the Debenture  Issuer.  The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

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

                                      A-l-6
<PAGE>

                                   ASSIGNMENT

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

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

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

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

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

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

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

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

          Date:
                --------------------------
         Signature:
                     ---------------------

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

         Signature Guarantee: (1)

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

                                      A-1-7
<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

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

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

      Certificate Number C-I                      310 Common Securities

                                  June 26, 2002

             Certificate Evidencing Floating Rate Common Securities

                                       of

                           North Bay Statutory Trust I

         North Bay Statutory  Trust I, a statutory  trust created under the laws
of the State of  Connecticut  (the  "Trust"),  hereby  certifies  that North Bay
Bancorp (the "Holder") is the registered owner of common securities of the Trust
representing  undivided  beneficial  interests  in the  assets of the Trust (the
"Common  Securities").  The  designation,   rights,  privileges,   restrictions,
preferences and other terms and provisions of the Common Securities  represented
hereby are issued  pursuant  to, and shall in all  respects  be subject  to, the
provisions of the Amended and Restated  Declaration  of Trust of the Trust dated
as of June 26, 2002, among Terry L. Robinson,  Dale Brain and Lee-Ann Cimino, as
Administrators,  State Street Bank and Trust  Company of  Connecticut,  National
Association,  as Institutional  Trustee,  North Bay Bancorp as Sponsor,  and the
holders from time to time of undivided  beneficial interest in the assets of the
Trust  including the  designation  of the terms of the Common  Securities as set
forth in Annex I to such amended and  restated  declaration,  as the same may be
amended from time to time (the "Declaration"). Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration.  The Holder is
entitled to the benefits of the Guarantee to the extent  provided  therein.  The
Sponsor will provide a copy of the Declaration,  the Guarantee and the Indenture
to the  Holder  without  charge  upon  written  request  to the  Sponsor  at its
principal place of business.

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

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

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

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

                                      A-2-l
<PAGE>

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

                                       NORTH BAY STATUTORY 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 an
annual rate equal to 5.3369%  beginning on (and  including) the date of original
issuance and ending on (but excluding)  September 26, 2002 and at an annual rate
for each successive period beginning on (and including)  September 26, 2002, and
each  succeeding  Distribution  Payment Date, and ending on (but  excluding) the
next succeeding Distribution Payment Date (each a "Distribution Period"),  equal
to 3-Month LIBOR, determined as described below, plus 3.45% (the "Coupon Rate");
provided, however, that prior to June 26, 2007, the Coupon Rate shall not exceed
11.95%,  applied  to the  stated  liquidation  amount of  $1,000.00  per  Common
Security,  such rate being the rate of interest  payable on the Debentures to be
held by the  Institutional  Trustee.  Distributions in arrears for more than one
quarterly period will bear interest thereon  compounded at the Distribution Rate
(to the extent  permitted by applicable law). The term  "Distributions"  as used
herein includes payments of Interest and any principal on the Debentures held by
the  Institutional  Trustee unless  otherwise  stated. A Distribution is payable
only to the extent that payments are made in respect of the  Debentures  held by
the Institutional  Trustee and to the extent the Institutional Trustee has funds
available therefor. As used herein,  "Determination Date" means the date that is
two London  Banking Days (i.e.,  a business day in which dealings in deposits in
U.S.  dollars are  transacted  in the London  interbank  market)  preceding  the
commencement of the relevant  Distribution Period. In the event that any date on
which a Distribution  is payable on this Common  Security is not a Business Day,
then a payment of the Distribution payable on such date will be made on the next
succeeding  day which is a Business Day (and without any  Distribution  or other
payment in respect of any such delay),  except that,  if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding  Business  Day, in each case with the same force and effect as if made
on the date the payment was originally  payable.  The amount of interest payable
for any  Distribution  Period will be  calculated by applying the Coupon Rate to
the principal amount outstanding at the commencement of the Distribution  Period
and  multiplying  each  such  amount  by  the  actual  number  of  days  in  the
Distribution Period concerned divided by 360.

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

                                      A-2-3
<PAGE>

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

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

         Except  as  otherwise  described  below,  Distributions  on the  Common
Securities  will be cumulative,  will accrue from the date of original  issuance
and will be payable  quarterly in arrears on March 26, June 26, September 26 and
December 26 of each year, commencing on September 26, 2002. 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 an "Extension Period") on the Debentures, subject to the
conditions  described below,  although such interest would continue to accrue on
the  Debentures  at an annual  rate equal to the  Distribution  Rate  compounded
quarterly  to the  extent  permitted  by law  during any  Extension  Period.  No
Extension  Period may end on a date other than an Interest  Payment Date. At the
end of any such Extension Period the Sponsor shall pay all interest then accrued
and  unpaid on the  Debentures  (together  with  Additional  Interest  thereon);
provided, however, that no Extension Period may extend beyond the Maturity Date.
Prior to the termination of any Extension Period, the Sponsor may further extend
such  period,  provided  that such period  together  with all such  previous and
further consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods,  or extend  beyond  the  Maturity  Date.  Upon the  termination  of any
Extension  Period and upon the payment of all accrued  and unpaid  interest  and
Additional Interest, the Sponsor may commence a new Extension Period, subject to
the foregoing requirements.  No interest or Additional Interest shall be due and
payable  during  an  Extension  Period,  except  at the end  thereof,  but  each
installment  of interest that would  otherwise  have been due and payable during
such Extension  Period shall bear  Additional  Interest.  If  Distributions  are
deferred,  the  Distributions  due  shall be paid on the date  that the  related
Extension Period terminates,  to Holders of the Securities as they appear on the
books and records of the Trust on the record  date  immediately  preceding  such
date.  Distributions  on the Securities must be paid on the dates payable (after
giving  effect to any  Extension  Period) to the extent that the Trust has funds
available for the payment of such  distributions  in the Property Account of the
Trust.  The  Trust's  funds  available  for  Distribution  to the Holders of the
Securities will be limited to payments received from the Debenture  Issuer.  The
payment of  Distributions  out of moneys held by the Trust is  guaranteed by the
Guarantor pursuant to the Guarantee.

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

                                      A-2-4
<PAGE>

                                   ASSIGNMENT

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

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

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

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

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

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

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

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

                              Date:______________________________________

                              Signature:_________________________________

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

                              Signature:

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

          Signature Guarantee (2)

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

                                      A-2-5
<PAGE>

                                    EXHIBIT B

                          SPECIMEN OF INITIAL DEBENTURE

                                (See Tab No. 16)

                                       B-1
<PAGE>

                                    EXHIBIT C

                               PLACEMENT AGREEMENT

                                 (See Tab No. 1)

                                      C-1Prepared by R.R. Donnelley Financial -- Exhibit 10.1

  
  Exhibit 10.1
 CHANGE IN CONTROL
AGREEMENT
                        This Change in Control Agreement
(“Agreement”) is entered into by and between SunTrust Banks, Inc., a Georgia corporation (“SunTrust”), and Sandra W. Jansky (“Executive”).
                        WHEREAS, Executive is employed by SunTrust or provides services directly or indirectly
to SunTrust as a senior executive of SunTrust or one, or more than one, SunTrust Affiliate; and
                        WHEREAS, the Board and the Compensation Committee have decided that SunTrust should
provide certain benefits to Executive in the event Executive’s employment is terminated without Cause or Executive resigns for Good Reason following a Change in Control; and
                        WHEREAS, this Agreement sets forth the benefits which the Board and the Compensation
Committee have decided SunTrust shall provide under such circumstances and the terms and conditions under which the Board and the Compensation Committee have decided that such benefits shall be provided;
                        NOW, THEREFORE, in consideration of the mutual promises and agreements contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, SunTrust and Executive hereby agree as follows:

	 § 1.
 
 
	 
	 Definitions
 
	  
 
	                        1.1  Board.  The term “Board” for purposes of this
Agreement shall mean the Board of Directors of SunTrust.
 
	  
 	  
 
	                        1.2  Cause.  The term “Cause” for purposes of this
Agreement shall (subject to § 1.2(e)) mean:
 
	  
 	  
 
	  
 	             (a)  The willful and continued failure by Executive to perform satisfactorily the duties of
Executive’s job;
 
	  
 	  
 
	  
 	             (b)  Executive is convicted of a felony or has engaged in a dishonest act,
misappropriation of funds, embezzlement, criminal conduct or common law fraud;
 
	  
 	  
 
	  
 	             (c)  Executive has engaged in a material violation of the SunTrust Code of Conduct; or

	  
 	  
 
	  
 	             (d)  Executive has engaged in any willful act that materially damages or materially prejudices
SunTrust or a SunTrust Affiliate or has engaged in conduct or activities materially damaging to the property, business or reputation of SunTrust or a  SunTrust Affiliate; provided, however,
 
	  
 
	  
 	             (e)  No such act, omission or event shall be treated as “Cause” under this
Agreement unless (i) Executive has been provided a detailed, written statement of the basis for SunTrust’s belief that such act, omission or event constitutes “Cause” and an opportunity to meet with the Compensation Committee
(together with Executive’s counsel if Executive chooses to have Executive’s counsel present at such meeting) after Executive has had a reasonable period in which to review such
 

 1

 

	 	 statement and, if the allegation is under § 1.2(a), has had at least a thirty (30) day period to take corrective action and (ii) the Compensation Committee after such
meeting (if Executive meets with the Compensation Committee) and after the end of such thirty (30) day correction period (if applicable) determines reasonably and in good faith and by the affirmative vote of at least two thirds of the members of the
Compensation Committee then in office at a meeting called and held for such purpose that “Cause” does exist under this Agreement.
 

 

	                        1.3  Change in
Control.  The term “Change in Control” for purposes of this Agreement shall mean a change in control of SunTrust of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act as in effect at the time of such “change in control”, provided that such a change in control shall be deemed to have occurred at such time as (i) any “person” (as that term is used in Sections
13(d) and 14(d)(2) of the Exchange Act), is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly, of securities representing 20% or more of the combined voting power for election of directors of
the then outstanding securities of SunTrust or any successor of SunTrust; (ii) during any period of two consecutive years or less, individuals who at the beginning of such period constitute the Board cease, for any reason, to constitute at least a
majority of the Board, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; (iii) the shareholders
of SunTrust approve any reorganization, merger, consolidation or share exchange as a result of which the common stock of SunTrust shall be changed, converted or exchanged into or for securities of another corporation (other than a merger with a
wholly-owned subsidiary of SunTrust) or any dissolution or liquidation of SunTrust or any sale or the disposition of 50% or more of the assets or business of SunTrust; or (iv) the shareholders of SunTrust approve any reorganization, merger,
consolidation or share exchange unless (A) the persons who were the beneficial owners of the outstanding shares of the common stock of SunTrust immediately before the consummation of such transaction beneficially own more than 65% of the outstanding
shares of the common stock of the successor or survivor corporation in such transaction immediately following the consummation of such transaction and (B) the number of shares of the common stock of such successor or survivor corporation
beneficially owned by the persons described in § 1.3(iv)(A) immediately following the consummation of such transaction is beneficially owned by each such person in substantially the same proportion that each such person had beneficially owned
shares of SunTrust common stock immediately before the consummation of such transaction, provided (C) the percentage described in § 1.3(iv)(A) of the beneficially owned shares of the successor or survivor corporation and the number described in
§ 1.3(iv)(B) of the beneficially owned shares of the successor or survivor corporation shall be determined exclusively by reference to the shares of the successor or survivor corporation which result from the beneficial ownership of shares of
common stock of SunTrust by the persons described in § 1.3(iv)(A) immediately before the consummation of such transaction.
 
	  
 	  
 	 

	                        1.4  Change in
Control Date.  The term “Change in Control Date” for purposes of this Agreement shall mean the date which includes the “closing” of the transaction which results from a Change in Control or, if there is no transaction
which results from a Change in Control, the date such Change in Control is reported by SunTrust to the Securities and Exchange Commission.
 
	 
	  
 	  
 	 

	                        1.5  Code.  The term “Code” for purposes of this
Agreement shall mean the Internal Revenue Code of 1986, as amended.
 
	 
	  
 	  
 	 

	                        1.6  Compensation Committee.  The term “Compensation
Committee” for purposes of this Agreement shall mean the Compensation Committee of the Board.
 
	 
	  
 	  
 	 

	                        1.7  Confidential or Proprietary Information.  The term
“Confidential or Proprietary Information” for purposes of this Agreement shall mean any secret, confidential, or proprietary information of SunTrust or a SunTrust Affiliate (not otherwise included in the definition of Trade Secret in
§ 1.20 of this Agreement) that has
 
				

 2

 

	 not become generally available to the public by the act of one who has the right to disclose such information without violating any right of SunTrust or a SunTrust
Affiliate.
 
	 
	  
 	  
 	 

	                        1.8  Current
Compensation Package.  The term “Current Compensation Package” for purposes of § 3(a)(2)(A) of this Agreement shall mean the sum of the following:
 
	 
	  
 	  
 	 

	  
 	             (a)  Executive’s highest annual base salary from SunTrust and any SunTrust Affiliate
which (but for any salary deferral election) is in effect at any time during the 1 year period which ends on the date Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or
§ 3(f);
 
	 
	  
 	  
 	 

	  
 	             (b)  The greater of (i) Executive’s target annual MIP bonus for the calendar year in
which Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or § 3(f) or (ii) the greater of (A) the average of the annual MIP bonus which was paid to Executive (or, if
greater, which would have been paid to Executive but for any bonus deferral election) for the 3 full calendar years in which Executive has participated in the MIP (or, if less, the number of full calendar years in which Executive has participated in
the MIP) which immediately precedes the calendar year in which Executive’s employment so terminates or, if Executive was not eligible to participate in the MIP in the calendar year which immediately precedes the calendar year in which
Executive’s employment so terminates, (B) the greater of (1) the average MIP bonus described in §1.8(b)(ii)(A) or (2) the last MIP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus
deferral election); and
 
	 
	  
 	  
 	 

	  
 	             (c) (i)  The average of the PUP bonus which was paid to Executive (or, if greater, which
would have been paid to Executive but for any bonus deferral election) for the 3 full performance cycles in which Executive has participated in the PUP (or, if less, for the number of full performance cycles in which Executive has participated in
the PUP) which immediately precede the performance cycle which ends in the calendar year in which Executive’s employment with SunTrust or a SunTrust Affiliate terminates under the circumstances described in § 3(a) or § 3(f) or, if
Executive was not eligible to participate in the PUP for the performance cycle which ends in the calendar year in which Executive’s employment so terminates or if there is no such cycle, (ii) the average PUP bonus described in §1.8(c)(i)
or the last PUP bonus which was paid to Executive (or, if greater, which would have been paid to Executive but for any bonus deferral election), whichever is greater.
 
	 
	  
 	  
 	 

	                        1.9  Disability Termination.  The term “Disability
Termination” for purposes of this Agreement shall mean a termination of Executive’s employment on or after the date Executive has a right immediately upon such termination to receive disability income benefits under SunTrust’s long
term disability plan or any successor to or replacement for such plan.
 
	 
	  
 	  
 	 

	                        1.10  Exchange
Act.  The term “Exchange Act” for purposes of this Agreement shall mean the Securities Exchange Act of 1934, as amended.
 
	 
	  
 	  
 	 

	                        1.11  Good
Reason.  The term “Good Reason” for purposes of this Agreement shall (subject to § 1.11(e)) mean:
 
	 
	  
 	  
 	 

	  
 	             (a) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of
Executive’s Protection Period reduces Executive’s base salary or opportunity to receive comparable incentive compensation or bonuses without Executive’s express written consent;
 
					

 3

 

	  
 	             (b) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of
Executive’s Protection Period reduces the scope of Executive’s principal or primary duties, responsibilities or authority without Executive’s express written consent;
 
	 
	  
 	  
 	 

	  
 	             (c) SunTrust or any SunTrust Affiliate at any time after a Change in Control but before the
end of Executive’s Protection Period (without Executive’s express written consent) transfers Executive’s primary work site from Executive’s primary work site on the date of such Change in Control or, if Executive subsequently
consents in writing to such a transfer under this Agreement, from the primary work site which was the subject of such consent, to a new primary work site which is outside the “standard metropolitan statistical area” which then includes
Executive’s then current primary work site unless such new primary work site is closer to Executive’s primary residence than Executive’s then current primary work site; or
 
	 
	  
 	  
 	 

	  
 	             (d) SunTrust or any SunTrust Affiliate after a Change in Control but before the end of
Executive’s Protection Period fails (without Executive’s express written consent) to continue to provide to Executive health and welfare benefits, deferred compensation and retirement benefits, stock option and restricted stock grants that
are in the aggregate comparable to those provided to Executive immediately prior to the Change in Control Date; provided, however,
 
	 
	  
 	  
 	 

	  
 	             (e) No such act or omission shall be treated as “Good Reason” under this Agreement
unless
 
	 
	  
 	  
 	 

	  
 	  
 	             (i) (A)  Executive delivers to the Compensation Committee a detailed, written statement
of the basis for Executive’s belief that such act or omission constitutes Good Reason, (B) Executive delivers such statement before the later of (1) the end of the ninety (90) day period which starts on the date there is an act or omission
which forms the basis for Executive’s belief that Good Reason exists or (2) the end of the period mutually agreed upon for purposes of this § 1.11(e)(i)(B) in writing by Executive and the Chairman of the Compensation Committee, (C)
Executive gives the Compensation Committee a thirty (30) day period after the delivery of such statement to cure the basis for such belief and (D) Executive actually submits Executive’s written resignation to the Compensation Committee during
the sixty (60) day period which begins immediately after the end of such thirty (30) day period if Executive reasonably and in good faith determines that Good Reason continues to exist after the end of such thirty (30) day period, or

	 
	  
 	  
 	 

	  
 	  
 	             (ii)  SunTrust states in writing to Executive that Executive has the right to treat such
act or omission as Good Reason under this Agreement and Executive resigns during the sixty (60) day period which starts on the date such statement is actually delivered to Executive;
 
	 
	  
 	  
 	 

	  
 	             (f) If (i)  Executive gives the Compensation Committee the statement described in §
1.11(e)(i) before the end of the thirty (30) day period which immediately follows the end of the Protection Period and Executive thereafter resigns within the period described in § 1.11(e)(i) or (ii) SunTrust provides the statement to Executive
described in § 1.11(e)(ii) before the end of the thirty (30) day period which immediately follows the end of the Protection Period and Executive thereafter resigns within the period described in § 1.11(e)(ii), then (iii) such resignation
shall be treated under this Agreement as if made in Executive’s Protection Period; and
 
	 
	  
 	  
 	 

	  
 	             (g) If Executive consents in writing to any reduction described in § 1.11(a) or §
1.11(b), to any transfer described in § 1.11(c) or to any failure described in § 1.11(d) in lieu of exercising
 
						

 4

 

	  
 	 Executive’s right to resign for Good Reason and delivers such consent to SunTrust, the date such consent is delivered to SunTrust thereafter shall be treated under this
definition as the date of a Change in Control for purposes of determining whether Executive subsequently has Good Reason under this Agreement to resign under § 3(a) or § 3(f) as a result of any subsequent reduction described in §
1.11(a) or § 1.11(b), any subsequent transfer described in § 1.11(c) or any subsequent failure described in § 1.11(d).
 
	  
 
	                        1.12  Gross Up
Payment.  The term “Gross Up Payment” for purposes of this Agreement shall mean a payment to or on behalf of Executive which shall be sufficient to pay (i) any excise tax described in § 9 in full, (ii) any federal, state and
local income tax and social security and other employment tax on the payment made to pay such excise tax as well as any additional taxes on such payment and (iii) any interest or penalties assessed by the Internal Revenue Service on Executive which
are related to the payment of such excise tax unless such interest or penalties are attributable to Executive’s willful misconduct or negligence.
 
	  
 
	                        1.13 
MIP.  The term “MIP” for purposes of this Agreement shall mean the SunTrust Banks, Inc. Management Incentive Plan or, if there is any material change in the terms, operation or administration of such plan following a Change in
Control, any successor to such plan in which Executive is eligible to participate and which provides an opportunity for a bonus for Executive which is comparable to the opportunity which Executive had under such plan before such Change in Control
or, if Executive reasonably determines that there is no such plan in which Executive is eligible to participate but SunTrust or a parent corporation maintains a short term bonus plan for the benefit of senior executives which provides for such an
opportunity, such other plan as agreed to by Executive and the Compensation Committee.
 
	  
 
	                        1.14  Protection
Period.  The term “Protection Period” for purposes of this Agreement shall (subject to § 1.11(f)) mean the two (2) year period which begins on a Change in Control Date.
 
	  
 
	                        1.15 
PUP.  The term “PUP” for purposes of this Agreement shall mean the SunTrust Banks, Inc. Performance Unit Plan or, if there is any material change in the terms, operation or administration of such plan following a Change in
Control, any successor to such plan in which Executive is eligible to participate and which provides an opportunity for a bonus for Executive which is comparable to the opportunity which Executive had under such plan before such Change in Control
or, if Executive reasonably determines that there is no such plan in which Executive is eligible to participate but SunTrust or a parent corporation maintains a long term bonus plan for the benefit of senior executives which provides for such an
opportunity, such other plan as agreed to by Executive and the Compensation Committee.
 
	  
 
	                        1.16 Restricted
Period.  The term “Restricted Period” for purposes of this Agreement shall mean the period which starts on the date Executive’s employment by SunTrust or a SunTrust Affiliate terminates under circumstances which require SunTrust
to make the payments and provide the benefits described in § 3 and which ends on the earlier of (a)(i) the first anniversary of such termination date for purposes of § 5 and (ii) the second anniversary of such termination date for all
other purposes under this Agreement, or (b) on the first date following such a termination on which SunTrust either breaches any obligation to Executive under § 3 or no longer has any obligation to Executive under § 3.
 
	  
 
	                        1.17 
SunTrust.  The term “SunTrust” for purposes of this Agreement shall mean SunTrust Banks, Inc. and any successor to SunTrust.
 
	  
 
	                        1.18  SunTrust
Affiliate.  The term “SunTrust Affiliate” for purposes of this Agreement shall mean any corporation which is a subsidiary corporation (within the meaning of § 424(f) of the Code) of SunTrust except a corporation which has
subsidiary corporation status under § 424(f) of the Code exclusively as a result of
 

 5

 

	 SunTrust or a SunTrust Affiliate holding stock in such corporation as a fiduciary with respect to any trust, estate, conservatorship, guardianship or
agency.
 
	  
 
	                        1.19 
Term.  The term “Term” for purposes of this Agreement shall mean the period described in § 2(b).
 
	  
 
	                        1.20  Trade
Secret.  The term “Trade Secret” for purposes of this Agreement shall mean information, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers that:
 
	  
 
	  
 	             (a) derives economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and
 
	  
 
	  
 	             (b) is the subject of reasonable efforts by SunTrust or a SunTrust Affiliate to maintain its
secrecy.
 
	  
 
	 § 2.
 
	  
 
	 Effective Date and Term
 
	  
 
	  
 	             (a) Effective Date.  This Agreement shall be effective on the date of this
Agreement as set forth in the signature section of this Agreement.
 
	  
 
	  
 	             (b) Term.
 
	  
 
	  
 	             (1) The Term of this Agreement shall be the period which starts on the date on which this Agreement
becomes effective under § 2(a) and ends (subject to § 2(b)(2) and § 2(b)(3)) on the third anniversary of such effective date.
 
	  
 
	  
 	             (2) The Term of this Agreement shall automatically be extended for one additional year effective as of the
first anniversary of the date on which this Agreement becomes effective under § 2(a) and one additional year effective as of each such anniversary date thereafter unless either Executive or SunTrust delivers to the other person notice to the
effect that there will be no such one year extension before the beginning of the 90 day period which ends on the anniversary date on which such automatic one year extension otherwise would have been effective.
 
	  
 
	  
 	             (3) (A)  If Executive’s Protection Period starts before the Term of this Agreement (as extended,
if applicable, under § 2(b)(2)) expires, the then Term of this Agreement shall automatically be extended until the expiration of such Protection Period.
 
	  
 
	  
 	             (B)  If Executive’s employment terminates during Executive’s Protection Period under the
circumstances described in § 3(a) or if Executive’s employment terminates under the circumstances described in § 3(f) before the Term of this Agreement (as extended, if applicable, under § 2(b)(2)) expires, the then Term of this
Agreement shall automatically be extended until the earlier of (1) the date Executive agrees that all SunTrust’s obligations to Executive under this Agreement have been satisfied in full or (B) the date a final
 
			

 6

 

	  
 	 determination is made pursuant to § 8 that SunTrust has no further obligations to Executive under this Agreement.
 
	  
 
	 § 3.
 
	  
 
	 Compensation and Benefits
 
	  
 
	  
 	             (a) General.  If a Change in Control occurs during the Term of this Agreement
and
 
	  
 
	  
 	             (1) SunTrust or a SunTrust Affiliate terminates Executive’s employment without Cause
during Executive’s Protection Period or
 
	  
 
	  
 	             (2) Executive resigns for Good Reason during Executive’s Protection Period,
then:
 
	  
 
	  
 	             (A) Cash Payment.  SunTrust shall pay Executive two (2) times Executive’s Current
Compensation Package in cash in a lump sum within 30 days after the date Executive’s employment so terminates.
 
	  
 
	  
 	             (B) Stock Options.  Each outstanding stock option granted to Executive by SunTrust shall
(subject to § 3(a)(2)(G)) immediately become fully vested and exercisable on the date Executive’s employment so terminates and Executive shall be deemed to continue to be employed by SunTrust for the period described in § 3(d) for
purposes of determining when Executive’s right to exercise each such option expires notwithstanding the terms of any plan or agreement under which such option was granted.
 
	  
 
	  
 	             (C) Restricted Stock.  Any restrictions on any outstanding restricted or performance stock
grants to Executive by SunTrust shall (subject to § 3(a)(2)(G)) immediately expire and Executive’s right to such stock shall be non-forfeitable notwithstanding the terms of any plan or agreement under which such grants were
made.
 
	  
 
	  
 	             (D) Earned but Unpaid Salary, Bonus and Vacation.  SunTrust shall promptly pay Executive any
earned but unpaid base salary and bonus, shall promptly pay Executive for any earned but untaken vacation and shall promptly reimburse Executive for any incurred but unreimbursed expenses which are otherwise reimbursable under SunTrust’s
expense reimbursement policy as in effect for senior executives immediately before Executive’s employment so terminates.
 
	  
 
	  
 	             (E) MIP.  SunTrust shall pay Executive within 30 days after Executive’s employment
terminates a portion of Executive’s target bonus or, if greater, Executive’s projected bonus under the MIP for the calendar year in which Executive’s employment terminates, where (1) Executive’s projected bonus shall be no less
than the bonus which would have been projected under the projection procedures in effect under the MIP on the date of the Change in Control and (2) such portion shall be determined by multiplying such target bonus or, if greater, such projected
bonus by a fraction, the numerator of which shall be the number of days Executive is employed in such calendar year and the denominator of which shall be the number of days in such calendar year.
 
				

 7

 

	  
 	             (F) PUP.  SunTrust shall pay Executive within 30 days after Executive’s employment
terminates a portion of Executive’s target bonus or, if greater, Executive’s projected bonus under the PUP for each performance cycle in effect on the date Executive’s employment terminates, where (1) Executive’s projected bonus
shall be no less than the bonus which would have been projected under the projection procedures in effect under the PUP on the date of the Change in Control and (2) such portion shall be determined by multiplying such target bonus or, if greater,
such projected bonus by a fraction, the numerator of which shall be the number of days Executive is employed in each such performance cycle and the denominator of which shall be the number of days in each such performance cycle.
 
	  
 
	  
 	             (b) Continuing Benefit Coverage.  If Executive’s employment terminates under
the circumstances described in § 3(a) or § 3(f), SunTrust or a SunTrust Affiliate from the date of such termination of Executive’s employment until the end of Executive’s Protection Period shall provide to Executive medical,
dental and life insurance benefits which are similar in all material respects as those benefits provided under SunTrust’s employee benefit plans, policies and programs to senior executives of SunTrust who have not terminated their employment.
If SunTrust cannot provide such benefits under SunTrust’s employee benefit plans, policies and programs, SunTrust either shall provide such benefits to Executive outside such plans, policies and programs at no additional expense or tax
liability to Executive or shall reimburse Executive for Executive’s cost to purchase such benefits and for any tax liability for such reimbursements.
 
	  
 
	  
 	             (c) No Interference with Vested Benefits.  If Executive’s employment
terminates under the circumstances described in § 3(a) or § 3(f), Executive shall have a right to any benefits under any employee benefit plan, policy or program maintained by SunTrust or any SunTrust Affiliate (other than the MIP, the PUP
and the SunTrust Severance Pay Plan) which Executive had a right to receive under the terms of such employee benefit plan, policy or program after a termination of Executive’s employment without regard to this Agreement.
 
	  
 
	  
 	             (d) Additional Age and Service Credit.  If Executive’s employment terminates
under the circumstances described in § 3(a) or § 3(f), Executive shall be deemed to have been employed by SunTrust throughout Executive’s Protection Period for purposes of computing Executive’s age and service credit on the date
Executive’s employment so terminates under any deferred compensation or welfare plan, policy or program (except a plan described in § 401 of the Code) maintained by SunTrust or a SunTrust Affiliate in which Executive is a participant and
under which Executive’s benefit, or eligibility for a benefit, is based in whole or in part on Executive’s age or service or age and service, and Executive shall receive such age and service credit notwithstanding the terms of any such
plan, policy or program.
 
	  
 
	  
 	             (e) No Increase in Other Benefits; No Other Severance Pay.  If Executive’s
employment terminates under the circumstances described in § 3(a) or § 3(f), Executive waives Executive’s right, if any, to have any payment made under this § 3 taken into account to increase the benefits otherwise payable to, or
on behalf of, Executive under any employee benefit plan, policy or program, whether qualified or nonqualified, maintained by SunTrust or a SunTrust Affiliate and, further, waives Executive’s right, if any, to the payment of severance pay under
any severance pay plan, policy or program maintained by SunTrust or a SunTrust Affiliate subject to the condition that SunTrust not be relieved of any of its obligations to Executive under this § 3 pursuant to § 3(g) or §
3(h).
 
			

 8

 

	  
 	             (f) Termination in Anticipation of Change in Control Date.  Executive shall be treated under
§ 3(a) as if Executive’s employment had been terminated without Cause or Executive had resigned for Good Reason during Executive’s Protection Period if (1)(A) Executive’s employment is terminated by SunTrust or a SunTrust
Affiliate without Cause after a Change in Control but before the Change in Control Date which results from such Change in Control or (B) Executive resigns for Good Reason after a Change in Control but before the Change in Control Date which results
from such Change in Control, (2) such Change in Control occurs on or after the date this Agreement becomes effective under § 2 and (3) there is a Change in Control Date which results from such Change in Control.
 
	  
 
	  
 	             (g) Death or Disability.  Executive agrees that SunTrust will have no obligations to Executive
under this § 3 if Executive’s employment terminates exclusively as a result of Executive’s death or Executive has a Disability Termination.
 
	  
 
	  
 	             (h) Release.  Executive agrees that SunTrust will have no obligations to Executive under this
§ 3 until Executive executes the form of release which is attached as Exhibit A to this Agreement and, further, will have no further obligations to Executive under this § 3 if Executive revokes such release.
 
	  
 
	 § 4
 
	  
 
	 No Solicitation of Customers or Clients
 
	  
 
	                            Executive shall not during the Restricted Period solicit any
customer or client of SunTrust or any SunTrust Affiliate with whom Executive had any material business contact during the two (2) year period which ends on the date Executive’s employment by SunTrust or a SunTrust Affiliate terminates for the
purpose of competing with SunTrust or any SunTrust Affiliate for any reason, either individually, or as an owner, partner, employee, agent, consultant, advisor, contractor, salesman, stockholder, investor, officer or director of, or service provider
to, any corporation, partnership, venture or other business entity.
 
	  
 
	 § 5.
 
	  
 
	 Antipirating of Employees
 
	  
 
	                            Absent the Compensation Committee’s written consent,
Executive will not during the Restricted Period solicit to employ on Executive’s own behalf or on behalf of any other person, firm or corporation, any person who was employed by SunTrust or a SunTrust Affiliate during the term of
Executive’s employment by SunTrust or a SunTrust Affiliate (whether or not such employee would commit a breach of contract), and who has not ceased to be employed by SunTrust or a SunTrust Affiliate for a period of at least one (1)
year.
 
	  
 
	 § 6.
 
	  
 
	 Trade Secrets and Confidential Information
 
	  
 
	                            Executive hereby agrees that Executive will hold in a fiduciary
capacity for the benefit of SunTrust and each SunTrust Affiliate, and will not directly or indirectly use or disclose, any Trade Secret that Executive may have acquired during the term of Executive’s employment by SunTrust or a SunTrust
Affiliate for so long as such information remains a Trade Secret.
 

 9

 

	                            Executive in
addition agrees that during the Restricted Period Executive will hold in a fiduciary capacity for the benefit of SunTrust and each SunTrust Affiliate, and will not directly or indirectly use or disclose, any Confidential or Proprietary Information
that Executive may have acquired (whether or not developed or compiled by Executive and whether or not Executive was authorized to have access to such information) during the term of, in the course of, or as a result of Executive’s employment
by SunTrust or a SunTrust Affiliate.
 
	  
 
	 § 7.
 
	  
 
	 Reasonable and Necessary Restrictions and Non-Disparagement
 
	  
 
	                            Executive
acknowledges that the restrictions, prohibitions and other provisions set forth in this Agreement, including without limitation the Territory and Restricted Period, are reasonable, fair and equitable in scope, terms and duration; are necessary to
protect the legitimate business interests of SunTrust; and are a material inducement to SunTrust to enter into this Agreement.  Executive covenants that Executive will not challenge the enforceability of this Agreement nor will Executive raise
any equitable defense to its enforcement.  Further, Executive and SunTrust each agree not to knowingly make false or materially misleading statements or disparaging comments about the other during the Restricted Period.
 
	  
 
	 § 8.
 
	  
 
	 Arbitration
 
	  
 
	                            Any dispute,
controversy or claim arising out of or relating to this Agreement shall be determined by binding arbitration in accordance with Title 9 of the United States Code and the applicable set of arbitration rules of the American Arbitration
Association.  Judgment upon any award made in such arbitration may be entered and enforced in any court of competent jurisdiction.  All statutes of limitation which would otherwise be applicable in a judicial action brought by a party
shall apply to any arbitration or reference proceeding hereunder.  Neither SunTrust nor Executive shall appeal such award to or seek review, modification, or vacation of such award in any court or regulatory agency.  Unless otherwise
agreed, venue for arbitration shall be in Atlanta, Georgia.  All of Executive’s reasonable costs and expenses incurred in connection with such arbitration shall be paid in full by SunTrust promptly on written demand from Executive,
including the arbitrators’ fees, administrative fees, travel expenses, out-of-pocket expenses such as copying and telephone, court costs, witness fees and attorneys’ fees; provided, however, SunTrust shall pay no more than $30,000 in
attorneys’ fees unless a higher figure is awarded in the arbitration, in which event SunTrust shall pay the figure awarded in the arbitration.
 
	  
 
	 § 9.
 
	  
 
	 Tax Protection
 
	  
 
	                            If SunTrust or
SunTrust’s independent accountants determine that any payments and benefits called for under this Agreement together with any other payments and benefits made available to Executive by SunTrust or a SunTrust Affiliate will result in Executive
being subject to an excise tax under § 4999 of the Code or if such an excise tax is assessed against Executive as a result of any such payments and other benefits, SunTrust shall make a Gross Up Payment to or on behalf of Executive as and when
any such determination or assessment is made, provided Executive takes such action (other than waiving Executive’s right to any payments or benefits) as SunTrust reasonably requests under the circumstances to mitigate or challenge such
tax.  Any determination under this § 9 by SunTrust or SunTrust’s independent accountants shall be made in accordance with § 280G of the Code and any applicable related regulations (whether proposed, temporary or final) and any
related Internal Revenue Service rulings and any related case law and, if SunTrust reasonably requests that Executive take action to
 

 10

 

	 mitigate or challenge, or to mitigate and challenge, any such tax or assessment (other than waiving Executive’s right to any payment or benefit) and Executive complies with
such request, SunTrust shall provide Executive with such information and such expert advice and assistance from SunTrust’s independent accountants, lawyers and other advisors as Executive may reasonably request and shall pay for all expenses
incurred in effecting such compliance and any related fines, penalties, interest and other assessments.
 
	  
 
	 § 10.
 
	  
 
	 Miscellaneous Provisions
 
	  
 
	                            10.1
Assignment.  This Agreement is for the personal services of Executive, and the rights and obligations of Executive under this Agreement are not assignable in whole or in part by Executive without the prior written consent of
SunTrust.  This Agreement is assignable in whole or in part to any successor to SunTrust. However, if SunTrust as part of any Change in Control transaction fails to assign SunTrust’s obligations under this Agreement to SunTrust’s
successor or such successor fails to expressly agree to such assignment on or before the Change in Control Date, SunTrust on the Change in Control Date shall (without any further action on the part of Executive) take the action called for in §
3 of this Agreement as if Executive had been terminated without Cause without regard to whether Executive’s employment actually has terminated.
 
	  
 
	                            10.2
Governing Law.  This Agreement will be governed by and construed under the laws of the State of Georgia (without reference to the choice of law principles thereof), except to the extent superseded by federal law.
 
	  
 
	                            10.3
Counterparts.  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
 
	  
 
	                            10.4
Headings; References.  The headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  Any reference to a section (§) shall be to a
section (§) of this Agreement unless there is an express reference to a section (§) of the Code or the Exchange Act, in which event the reference shall be to the Code or to the Exchange Act, whichever is applicable.
 
	  
 
	                            10.5
Amendments and Waivers.  Except as otherwise specified in this Agreement, this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of SunTrust and Executive.
 
	  
 
	                            10.6
Severability.  Any provision of this Agreement held to be unenforceable under applicable law will be enforced to the maximum extent possible, and the balance of this Agreement will remain in full force and effect.
 
	  
 
	                            10.7 Entire
Agreement.  This Agreement constitutes the entire understanding and agreement of SunTrust and Executive with respect to the matters contemplated in this Agreement, and supersedes all prior understandings and agreements between SunTrust and
Executive with respect to such transactions.
 
	  
 
	                            10.8
Notices.  Any notice required hereunder to be given by either SunTrust or Executive will be in writing and will be deemed effectively given upon personal delivery to the party to be notified or five (5) days after deposit with the United
States Post Office by registered or certified mail, postage prepaid, to the other party at the address set forth below or to such other address as either party may from time to time designate by ten (10) days advance written notice pursuant to this
§ 10.8.  All such written communication will be directed as follows:
 

 11

 

	  
 	 If to SunTrust:
 
	  
 	  
 
	  
 	 SunTrust Banks, Inc.
 
	  
 	 Attention:  Chief Executive Officer 303
 
	  
 	 Peachtree St., NE, 30th Floor
 
	  
 	 Atlanta, GA  30308
 

  

	 
	 If to Executive, to the most recent address Executive has provided to SunTrust for inclusion in Executive’s personnel records.
 	 

	  
 
	 
	                            10.9 Binding
Effect.  This Agreement shall be for the benefit of, and shall be binding upon, SunTrust and Executive and their respective heirs, personal representatives, legal representatives, successors and assigns, subject, however, to the provisions
in § 10.1 of this Agreement.
 	 

	  
 
	 
	                            10.10 Not an
Employment Contract.  This Agreement is not an employment contract and shall not give Executive the right to continue in employment by SunTrust or a SunTrust Affiliate for any period of time or from time to time.  Moreover, this
Agreement shall not adversely affect the right of SunTrust or a SunTrust Affiliate to terminate Executive’s employment with or without cause at any time.
 	 

	  
 
	 
	                            IN WITNESS
WHEREOF, SunTrust and Executive have entered into this Agreement this 15th day of April, 2002, and such date shall be the date of this Agreement.
 	 

			

  

	 SUNTRUST BANKS, INC.
 	 EXECUTIVE

 	  
 	  
 
	 By:
 	 /s/   Mary T. Steele
 	 /s/   Sandra W. Jansky
 	  
 
	  
 	 
 	  
 	 
 	  
 
	  
 	 Mary T. Steele
 	 Sandra W. Jansky

 
	 Title:  Senior Vice President and
            Human Resources Director
 
							

 12

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